The business license tax — known in Vietnamese as lệ phí môn bài — is an annual administrative fee that every enterprise, branch, and business location operating in Vietnam must pay. While the amounts are modest compared to corporate income tax or VAT, the compliance obligation is straightforward and the penalties for missing the deadline are easily avoidable. This guide covers everything FDI companies need to know.
What Is the Business License Tax?
The business license tax is a flat annual fee payable to the local tax authority, governed by Decree 139/2016/NĐ-CP as amended by Decree 22/2020/NĐ-CP. It is not a tax on profits or revenue — it is simply a licence fee for the right to operate. Every legal entity with a Vietnamese Enterprise Registration Certificate (ERC) is subject to it.
Business License Tax Rates for 2026
For enterprises (including FDI companies), the annual fee is determined by the charter capital declared in the ERC:
| Charter Capital | Annual Fee |
|---|---|
| Above VND 10 billion | VND 3,000,000 |
| VND 10 billion or below | VND 2,000,000 |
| Dependent units (branches, representative offices, business locations) | VND 1,000,000 per unit |
Note: For FDI companies with charter capital in foreign currency, the VND equivalent is calculated using the exchange rate at the time of ERC issuance or amendment.
Payment Deadline
The annual business license tax must be paid by 30 January of each calendar year.
For newly established businesses, the timeline is different:
- Companies established in the first half of the year (January–June): pay the full annual fee by the end of the month of establishment.
- Companies established in the second half of the year (July–December): pay 50% of the annual fee by the end of the month of establishment.
Exemptions and Reductions
Under Decree 22/2020/NĐ-CP, the following entities qualify for exemptions:
- New enterprises in their first year of operation (from the date of ERC issuance) are exempt from the business license tax for that year.
- Small and micro enterprises converting from household businesses are exempt for 3 years from the conversion date.
- Enterprises operating in especially disadvantaged socioeconomic areas may qualify for further reductions.
- Individuals or households with annual revenue below VND 100 million are exempt.
Where and How to Pay
The business license tax is paid directly to the local tax authority (district-level Tax Department) where the company is registered. Payment can be made via:
- Bank transfer to the state budget account designated by the local tax office
- Direct payment at the tax office counter
- Online payment via the GDT’s eTax portal (for companies registered on the system)
No separate declaration form is required — the tax is self-assessed based on the charter capital in your ERC.
Branches and Representative Offices
Each branch or business location of an FDI company must pay its own VND 1,000,000 annual fee, in addition to the fee paid by the parent company. Representative offices are also subject to the VND 1,000,000 fee unless they qualify for an exemption.
If a company opens a new branch during the year, the branch pays the fee by the end of the month in which it is established — not at the end of January.
Penalties for Late or Non-Payment
Under Decree 125/2020/NĐ-CP, failure to pay the business license tax on time results in:
- A late payment penalty: 0.03% per day on the unpaid amount, charged from the day after the deadline
- An administrative fine of VND 2–5 million for failure to pay
While the absolute fee amounts are small, cumulative penalties over multiple years — particularly for companies with multiple branches — can become significant.
Practical Checklist for FDI Companies
- ☑ Confirm your charter capital amount in your current ERC to determine the correct fee tier
- ☑ Count all registered branches and business locations — each requires a separate VND 1,000,000 payment
- ☑ Set a calendar reminder for 30 January each year
- ☑ Retain payment receipts as evidence for tax inspection
- ☑ If you amended your charter capital during the year, verify whether the new amount affects your fee tier
Related reading: Vietnam Annual Compliance Calendar 2026 — all tax and statutory deadlines for FDI companies in one place, including the 30 January Business License Tax deadline.
How TrustlineAX Can Help
TrustlineAX’s tax compliance team tracks business license tax obligations for all your registered entities and locations in Vietnam — ensuring timely payment, correct fee calculations, and documentation for your audit file. While this is one of the simpler compliance tasks, it is one that should never be overlooked.