The business licence fee is the smallest item in the compliance budget yet the first test of a new company administration system: forgetting a small fee usually shows the company has no compliance calendar — and that is the worrying finding, not the fine amount. Forgetting First-Year License Tax imposes an extra layer on foreign-invested enterprises: every step carries additional foreign exchange control and market access conditions, making the same procedure stricter than for domestic enterprises.
Short answer
In short: the business licence fee is paid annually by charter capital tier under Decree 139/2016/ND-CP (tier 1: capital over VND 10 billion — VND 3 million/year; tier 2: VND 5 to 10 billion — VND 2 million/year; tier 3: under VND 5 billion — VND 1 million/year), and newly formed companies are exempt from the licence fee in their first formation year under current exemption policy — but exemption from payment does not mean exemption from declaration; forgetting the return is still a tax procedure violation fined under Decree 125/2020/ND-CP.
In the section below on Forgetting First-Year License Tax, the letter of the legal text and filing practice must be understood separately, since the latter may differ between localities and between commercial banks.
Detailed analysis
The fee structure has two separately administered components: the fee amount (set by charter capital tier or revenue for each subject type) and the licence fee declaration (filed when starting operations — when the tier changes, by deadlines tied to tax filing periods). The first-year exemption policy for newly formed companies and converted household businesses, applied in practice in recent years, means no payment arises in year one, but the tax system still needs the declaration to record the subject and tier for later years. A company forgetting to declare in year one enters year two with empty fee data, incurring late-return penalties and queries at finalisation.
The remedy when forgotten is filing the supplementary declaration as soon as discovered, determining the correct tier by charter capital at the corresponding time, and checking whether related years have unpaid fee amounts with late payment charges. Administratively, the licence fee should be a fixed line in every company January compliance calendar — check whether the capital tier changed due to charter capital increase — decrease, declare and pay in time, and keep documents in the year tax file.
Framework: the business licence fee under Decree 139/2016/ND-CP (fee tiers by charter capital: over VND 10 billion — VND 3,000,000/year; VND 5 to 10 billion — VND 2,000,000/year; under VND 5 billion — VND 1,000,000/year); first formation year licence fee exemption under Decree 22/2020/ND-CP amending Decree 139/2016; declaration — payment deadlines under fee administration rules and Tax Administration Law 108/2025/QH15; late tax filing penalties under Decree 125/2020/ND-CP (as amended).
Risks and practical notes
For Forgetting First-Year License Tax specifically, beyond administrative fines, the company may also face the bank refusing transactions, being classified as high-risk by the tax authority, and partners demanding an explanation of its legal status.
The specific risk: because the amount is small, the licence fee is the duty most easily slighted by both the company and a cheap accounting provider — and when discovered in a general inspection, it is often the opening sign leading authorities to dig deeper into larger duties of the same loose administration system.
Action checklist
- Make the licence fee a fixed line of the January compliance calendar, including in the exempt year
- Determine the fee tier by current charter capital and re-check after every capital change
- File the declaration in the first period even when the payable amount is zero due to exemption
- Keep the declaration and payment documents in the year tax file, checking status on the tax system
- If an omission is found, file supplementarily at once before the tax office announces an inspection
Frequently asked questions
What happens if the first-year licence fee declaration is forgotten?
The company must still file the supplementary declaration and bear administrative penalties for late filing conduct under Decree 125/2020/ND-CP; if the year is exempt, no fee amount arises for that year, but the late return is a procedural violation independent of the amount. In later years, the empty fee tier data must also be clarified at finalisation.
Licence fee levels by charter capital?
Three tiers by charter capital for organisations: over VND 10 billion is VND 3 million/year; VND 5 to 10 billion is VND 2 million/year; under VND 5 billion is VND 1 million/year, under Decree 139/2016/ND-CP. Branches, representative offices and business locations carry lower separate levels; household businesses are tiered by revenue.
Is there a first-year exemption?
Yes: newly formed companies are exempt from the business licence fee in their first formation year under the policy in Decree 22/2020/ND-CP amending the licence fee rules. Note the exemption covers the money, not the declaration, and from year two the company pays by its charter capital tier normally.
How to remedy a late declaration?
File the supplementary licence fee declaration as soon as discovered, determine the correct tier by charter capital for each related year, pay any missing fee amounts with late payment charges if any, and check the duty status on the tax system. Also put the licence fee into the annual compliance calendar so it does not repeat next year.
FLAT Law Firm accompanies investors
The FLAT Law Firm helps foreign investors build a dedicated compliance calendar for each project, tracking capital contribution progress, tax filing milestones and sub-licences, and weaving in the handling rhythm of Forgetting First-Year License Tax so that overseas management always knows the legal status in Vietnam. If internal headcount is limited, the FLAT Law Firm’s accompaniment service can follow up monthly on incorporation-stage obligations, reporting progress regularly and flagging upcoming deadlines in advance.
This article has been quality-reviewed by the FLAW AI Legal Council