In case the representative office of an enterprise engages in the production and trading of goods and services, the license fee must be paid; In case a representative office is not engaged in production and trading of goods and services, it is not required to pay license fees as prescribed.

As reflected by the Phu Vuong Investment Joint Stock Company (in Long An Province), license fees are a direct tax on income-generating business units. Until now, representative offices have only the duty of authorized representation for the interests of the business, not directly doing business, not generating income.

Therefore, through the receiving and responding system to businesses’' recommendations, the Phu Vuong Investment Joint Stock Company would like to request the competent authorities to consider not collecting additional license fees for representative offices.

Regarding this issue, The General Department of Taxation – the Ministry of Finance answers as follows:

In Official Dispatch No. 1263/TCT-CS dated April 12, 2011 of the General Department of Taxation, based on the guidance in Circular No. 42/2003/TT-BTC dated May 7, 2003 of the Ministry of Finance, replied the Company The Global Sustainable Forest - Economic Development Investment CP and send it to the Tax Departments of the provinces and centrally-run cities as follows:

“In case the representative office of Global Sustainable Forest - Economic Development Investment Joint Stock Company in the provinces, if it only conducts transactions and trade promotion, does not do business, does not conduct revenue and expenditure. Money is not subject to license tax. In case the representative offices of the Company have business activities, they must pay license tax according to the provisions of law.

At No. 3, Section III, Part B, Appendix 01 List of fees and charges promulgated together with the Law on Fees and Charges No. 97/2015/QH13 dated November 25, 2015 (effective from January 1, 2015). 2017) regulates State management fees related to production and business “license fees”

Article 2 of Decree No. 139/2016/ND-CP dated October 4, 2016 of the Government stipulating license fees as follows:

“Article 2. Licensing fee payers

The licensing fee payers are the organizations and individuals that operating their trade/production of goods and services except the cases specified in Article 3 of this Decree, including:

1. The enterprises which are established under the regulations of law.

6. the branches, the representative offices of organizations specified in Paragraphs 1, 2, 3, 4 and 5 of this Article (if any).”

Based on the above provisions, the Ministry of Finance has issued Official Letters No. 15865/BTC-CST dated November 7, 2016, Official Letter No. 1025/BTC-CST dated January 20, 2017 guiding on license fees, accordingly, in case an enterprise's representative office is engaged in the production and trading of goods and services, the license fee must be paid; In case a representative office is not engaged in production and trading of goods and services, it is not required to pay license fees as prescribed.

According to Chinhphu.vn