Decoding business license tax: What businesses and individuals need to know?

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This article provides detailed information about the business license tax (BLT), including its concept, purpose, significance, taxpayers, tax rates, deadlines, and payment methods. BLT is a direct tax that organizations, business households, and individuals engaged in business activities must pay periodically. It helps state management agencies control and manage business operations, contribute to the state budget, and encourage environmental protection measures. Taxpayers include businesses, business households, and individuals with business registration certificates. There are exemptions for certain categories, such as those with low annual turnover or newly established organizations. Tax rates are determined based on charter capital or investment capital for businesses, and revenue for business households and individuals. The deadline for BLT payment is January 30th of the year following the commencement of business operations or establishment. Payment can be made directly at the ta Learn in detail about the business license tax, taxpayers, tax rates, deadlines, payment methods, and important notes. This article provides comprehensive and easy-to-understand guidance for businesses and individuals to ensure timely compliance with tax obligations. 1. Business License Tax, DLT. Concept. Business license tax is a direct tax that organizations, business households, and individuals engaged in business activities must pay periodically annually or when starting a business operations. Purpose of BLT. Help state management agencies can control and efficiently manage business operations in the area, ensuring security and social order. Contribute to the state budget for public expenditure on education, health care, national defense, etc. Encourage businesses, business households, and individuals to implement environmental protection measures and minimize the environmental impact of their business activities. Significance of BLT. For the state, BLT is an important source of revenue for the state budget, supporting public expenditure. For businesses, business households, and individuals, BLT helps businesses, business households, and individuals obtain business licenses, operate legally, and be protected by law. For society, BLT contributes to maintaining security and social order, effective business management, and environmental protection. 2. Taxpayers. Businesses, including businesses established under Vietnamese law, such as joint stock companies, limited liability companies, private businesses, cooperatives, branches and representative offices of enterprises, if any, business households, individuals engaged in business activities and granted a business registration certificate. Individuals engaged in business activities. Individuals engaged in business activities who are not granted a business registration certificate but have business activities subject to BLT. Exemptions from BLT. Business households and individuals with annual turnover of 100 million dong or less. Exemption during the first year of establishment or commencement of business operations. Newly established organizations granted new tax codes and business codes. Households, individuals, and groups of individuals starting business activities for the first time. During the BLF exemption period, branches, representative offices, and business locations of organizations, households, individuals, and groups of individuals granted the exemption are also exempt from BLF cooperatives and cooperative unions operating in agriculture. Small and medium-sized enterprises, SMEs, transitioning from business households are exempt from BLF for three years from the date of first obtaining a business registration certificate. 3. Tax rates. Businesses, BLT rates are determined based on the charter capital or investment capital of the business as follows. Organizations with charter capital or investment capital over VND 10 billion, VND 3 million, 3 million per year. Organizations with charter capital or investment capital of VND 10 billion or less, VND 2 million, 2 million per year. Branches, representative offices, business locations, public service units, and other economic organizations, VND 1 million, 1 million per year. Business households, BLT rates are determined based on the business household's revenue in the previous year as follows. Revenue from 100 million dong to 300 million dong, 300,000 dong slash year. Revenue from 300 million dong to 500 million dong, 500,000 dong slash year. Revenue over 500 million dong, 1 million dong slash year. Individuals engaged in business activities, BLT rates apply the same as the tax rates for business households with the same revenue level. Notes. The above BLT rates apply only to businesses, business households, and individuals engaged in business activities within the same province slash city. BLT rates may vary for specific business sectors according to legal regulations. 4. Deadline for business license tax. New taxpayers or newly established organizations, SMEs transitioning from business households, file BLF declarations and submit the declaration form to the directly managing tax authority before January 30th of the year following the commencement of business operations or establishment. Note. Timely and complete BLF payment is the obligation of organizations, business households, and individual business owners. Late BLF payments are subject to penalties as prescribed by law. 5. Payment methods. Direct payment at the tax authority. Step 1. Prepare the BLT payment dossier, including BLT declaration form according to Form 01-LPMB issued with Circular 80-2021-TTBTC. Documents proving business capital sources for businesses. Business registration certificate for business households. Personal identification documents for individuals engaged in business activities. Step 2. Submit the dossier and BLT payment to the competent tax authority.