From 1 January 2026, there is no more license tax. A representative office of a foreign trader — like every other taxpayer category — no longer pays or files license tax (lệ phí môn bài). This follows the termination of license tax collection under Article 10(7) of Resolution 198/2025/QH15, implemented by Decree 362/2025/ND-CP. Even before 2026, a representative office operating within its proper scope (no direct profit-making) was already outside the license-tax net.
Legal basis: license tax disappears from 1 January 2026
Two key instruments:
- Resolution 198/2025/QH15 (17 May 2025): Article 10(7) terminates the collection and payment of license tax from 1 January 2026;
- Decree 362/2025/ND-CP (31 December 2025): Article 6(4) repeals Decree 139/2016/ND-CP and Decree 22/2020/ND-CP in full — the two decrees that detailed license tax.
The result: from 2026, no new license-tax obligation arises for any taxpayer, representative offices included, and no license-tax return needs filing. Any document still citing Decree 139/2016 as current law is outdated.
Why representative offices were already outside the scope before 2026
There is a second layer to the “no payment” answer. Under Article 18.1 of the Commercial Law 36/2005/QH11 and Article 30 of Decree 07/2016/ND-CP, a representative office may not engage in direct profit-making activities in Vietnam — it functions only as a liaison office: market research, promoting investment and business opportunities that the foreign trader it represents may not directly pursue.
License tax applied only to organisations and individuals conducting production or business activities. A representative office operating within its proper scope — no business, no revenue — was in principle already outside the license-tax net even before 2026.
The grey zone: representative offices that “support sales” attract scrutiny
In practice, tax authorities question representative offices whose staff effectively participate in negotiations, contracting or sales support for the foreign trader — going beyond the liaison function. In such cases, the authorities may re-examine the true nature of the office’s activities and raise tax-obligation issues (not limited to license tax).
This is a grey zone with no absolute answer: representative offices should review their actual activities against their establishment licence and avoid letting day-to-day operations drift into unlicensed business activity.
Pre-2026 license-tax arrears: still payable in full
Abolition from 2026 does not erase old debts. License-tax arrears arising in 2025 and earlier years (budget items 2862/2863/2864) must still be paid in full. Representative offices with outstanding license tax for prior years should settle them to avoid late-payment interest.
Remaining tax obligations of a representative office in 2026
No license tax does not mean no tax obligations. The remaining duties include:
- Personal income tax (PIT) for employees: under the Personal Income Tax Law 109/2025/QH15 (effective 1 July 2026, replacing Law 04/2007/QH12); income-paying organisations file quarterly from 1 July 2026 (Article 22 of Circular 89/2026/TT-BTC);
- Foreign contractor tax where the office makes payments abroad to foreign contractors;
- Tax registration under the Law on Tax Administration 108/2025/QH15 (effective 1 July 2026).
The practical 2026 compliance focus for a representative office is therefore: PIT + tax registration + reviewing the grey-zone scope of activities — not license tax.
FAQs
1. Does a representative office established in 2026 need to file a license-tax return?
No. From 1 January 2026 there is no license-tax filing or payment obligation for any taxpayer, including newly established units.
2. Must a representative office file a “confirmation of non-payment”?
No regulation requires such a confirmation. Once the obligation is terminated, no procedure arises.
3. What about PIT for foreign staff of the office?
As an income-paying organisation, the office must still withhold, declare and pay PIT for its employees (Vietnamese and foreign) under Law 109/2025/QH15, filing quarterly from 1 July 2026.
Need help reviewing the tax obligations of your representative office or branch? Reach us via the Contact page of FLAT Law Firm.
Transparency note: This article was researched and reviewed by FLAT Law Firm’s AI Legal Council under its internal process; it has not been reviewed by a human lawyer. The content is for reference only, not legal advice.