Which type of taxes do businesses need to pay?

During operation, StartUp businesses also need to concern the taxes that need to be completed. Maybe the amount of money is not large, but it is easy for businesses to be sanctioned, encountering permeable troubles. This is an equally important aspect of business activities, Luat Phuc Cau will provide you with the necessary information to understand what taxes to pay the following.

1. License tax

As an annual fee, the fee payable is calculated based on the charter capital or investment capital of the enterprise.
– Charter capital of less than VND 10 billion: A subject fee of VND 2,000,000/year (Two million dong);
– Charter capital from VND 10 billion : A subject fee of VND 3,000,00/year (Three million dong);
– Representative office, branch, business location: 1,000,000 VND/ year (One million VND).
As of January 24, 2020, newly established enterprises are exempt from card fees in the first year.

2. Value added tax

VAT is an indirect tax on the added value of goods and services in the process from production, circulation to consumption.
– The tax rate of 0% is applicable to exported goods and services; construction and installation of works overseas and in non-tariff zones; international transport; goods and services that are not subject to VAT upon export.
– The tax rate of 5% is applied to each type of goods and services at the stages of import, production, processing or commercial business;
– The tax rate of 10% is applied to each type of goods and services at the stages of import, production, processing or commercial business.

3. Profit tax (Corporate income tax)

Corporate income tax is the direct tax on the results of the last production and business activities of the enterprise. The tax rate depends on the field of operation of the business.
– The tax rate of 20% is applicable to all enterprises (from 01/01/2016), except for enterprises subject to preferential tax rates and regulations must apply the following tax rates from 32% to 50%.
– The tax rate from 32% to 50% is applied to the search, exploration, and exploitation of oil and gas and other rare resources in Vietnam.
– The tax rate of 40% is applied in the case of rare resource mines with 70% or more of an assigned area in areas with particularly difficult socio-economic conditions.
– The tax rate of 50% is applied to the search, exploration, and exploitation of rare resource mines such as platinum, gold, silver, tin, wolfram, antimoan, gemstones, rare earth except for oil and gas.

4. Personal Income Tax (PIT)

PIT payable on incomes from salaries and wages is calculated on taxable incomes and tax rates, specifically as follows:

Payable PIT = PIT income x Tax rate

In which:
– Taxable income is determined as follows:

PIT income = PITable income – Deductions

– Taxable income is determined as follows:

PITable income = Total income – Incomes exempt from PIT

Tax rate:
– For individuals residing in Vietnam (present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day of presence in Vietnam):
+ Sign labor contracts with a term of 3 months or more: Calculate taxes according to the progressive schedule in parts.
+ Sign a labor contract with a term of fewer than 3 months or not sign a contract: Calculate 10% of the total income.
– For non-resident individuals: Calculate 20% on salary and wages.
Besides, there are some other taxes that are based on the company’s business line such as Natural resources tax, Import and export tax, Environmental protection tax, Non-agricultural land use tax…

Please don’t hesitate to contact us if you require any further information!


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