Business license tax is one of the first tax obligations that businesses and business households must fulfill when starting production and business activities. Although it is a fixed and seemingly simple revenue, if the code is declared incorrectly, the tax rate is determined incorrectly or payment is late, businesses may be fined or even have their expenses excluded when settling corporate income tax. This article provides detailed instructions on how to determine the business license tax rate based on charter capital/revenue, payment deadline, and how to declare and account for it in accordance with legal regulations in 2025.
What is business license tax and why do I have to pay it?
Business license tax (business license fee) is a mandatory annual fee, applied to organizations and individuals doing business in Vietnam. According to Decree 139/2016/ND-CP and Circular 302/2016/TT-BTCThis fee is to establish the legal operating status of the unit and create a basis for tax management.
Enterprises must pay business license tax immediately after establishment to use invoices, open bank accounts and carry out official transactions. Some cases are exempted from the first year fee such as newly established enterprises or branches that do not operate production or business.
Business license tax rates based on charter capital or revenue
Business license tax is calculated based on charter capital (for organizations) or annual revenue (for business households/individuals). Specific collection rates are regulated as follows:
| Taxpayer | Basis for determination | Annual business tax rate |
|---|---|---|
| Enterprises with charter capital over 10 billion VND | Charter capital | 3,000,000 VND |
| Enterprises with charter capital of 10 billion or less | Charter capital | 2,000,000 VND |
| Branches, representative offices, business locations | No charter capital | 1,000,000 VND |
| Household/individual business > 500 million/year | Revenue | 1,000,000 VND |
| Household/individual business 300 - 500 million/year | Revenue | 500,000 VND |
| Household/individual business 100 - 300 million/year | Revenue | 300,000 VND |
Note: Business households with revenue under 100 million VND/year are exempt from business license fees.
How to calculate business license tax in 2025
Although it is a fixed annual revenue, the calculation of business license tax still depends on the time of establishment and the operating status of the enterprise or business household. Some specific cases to note:
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Enterprises established after July 1 (ie in the second half of the year): only have to pay 50% business license fee in the first year.
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Branches and representative offices that do not generate business activities in the fiscal year are exempted from business license tax for that year.
Illustrative example
| Case | Interpretation | Amount paid |
|---|---|---|
| Company A, charter capital of 5 billion VND, established in March 2025 | Established before July 1, paid full fees according to capital level ≤ 10 billion | 2,000,000 VND |
| Business household B has revenue in 2024 of 550 million VND | Revenue > 500 million, highest level | 1,000,000 VND |
| Enterprise C was established on August 15, 2025, with charter capital of 12 billion VND. | Established after July 1, pay 50% highest level of business license fee | 1,500,000 VND |
| Branch D has no activities in 2025. | Not in business, eligible for exemption from business license fee | Exemption |
Note: Correctly determining the time of establishment and business status is a mandatory basis to avoid overpayment or being penalized for falsely declaring tax obligations.
Deadline for tax declaration and payment and implementation method
Legal basis: Circular 80/2021/TT-BTC
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Declaration: Within 30 days from the date of issuance of business registration.
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Tax payment: Before January 30 every year.
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No need to re-file from the second year if there are no changes.
Submission form:
Via Electronic Tax Portal https://thuedientu.gdt.gov.vn, HTKK software, or Internet Banking.
Late payment penalty: from 2 to 25 million VND, depending on the level of violation (according to Decree 125/2020/ND-CP).
Chapter and sub-section codes to know when declaring
| Business type | Chapter code |
|---|---|
| Private enterprise | 754 |
| Limited Liability Company, Joint Stock Company | 755 |
Business license tax sub-item: 2862 (applied from 2022)
Incorrect coding may lead to incorrect data submission to the State budget, return or administrative violation handling.
Accounting for business license tax
Legal basis: Circular 200/2014/TT-BTC of the Ministry of Finance on enterprise accounting regime.
Business license tax is an annual periodic expense and is often included in business management expenses by businesses, if it meets the conditions to be counted as a deductible expense.
Accounting entries when recording tax liability:
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Debit account 642 – Business management expenses
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Credit account 3338 – Taxes and amounts payable to the State
Accounting entries when paying taxes:
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Debit account 3338
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Credit account 112 – Bank deposits
Note: Business license tax is only included in deductible expenses when the enterprise has complete invoices and tax payment documents and makes payment on time according to tax law regulations.
Common mistakes and how to fix them
Some common errors:
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Incorrect declaration of rank according to charter capital or revenue
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Not declared/submitted to branches with business activities
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Incorrect budget chapter and sub-item code
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Forget to declare within the first 30 days after establishment
How to handle:
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Look up business registration records and revenue for the most recent year
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Send an explanation letter if submitted incorrectly
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Use HTKK software or hire an accounting unit to support you.
Conclusion and suggestions for businesses and business households
Although considered a simple tax, the business license tax still poses many risks if businesses or business households are subjective in declaring and paying taxes. A small mistake such as choosing the wrong tax rate, declaring the wrong chapter or sub-item code, or paying late can lead to administrative penalties, loss of the right to deduct expenses, or affect legal reputation when settling.
Therefore, business organizations and individuals need to:
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Determine the correct charter capital or revenue of the previous year to apply the appropriate tax rate.
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Fully and accurately declare information on the tax return, especially chapter codes and tax sub-items.
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Pay taxes on time, prioritize using electronic portals to ensure speed, transparency and easy checking and comparison.
In the context of digitalization and constantly changing tax policies, proactively updating regulations and coordinating with professional accounting units is a smart choice to help businesses minimize risks, optimize costs and ensure sustainable compliance with the law.
