In the context where the tax system and related fees are becoming increasingly complex, understanding the fundamental concepts of taxes, fees, and levies is crucial for individuals and businesses to actively and effectively manage personal and corporate finances in Vietnam.
In reality, many people still find it challenging to differentiate between these concepts. This article will focus on explaining the basic differences between taxes, fees, and levies, providing a clear and comprehensive overview of the current tax and fee system in Vietnam.
Common Aspects of Taxes, Fees, and Levies
Taxes, fees, and levies all share the commonality of being sources of government revenue. Businesses and individuals pay taxes and fees, with levies essentially being contributions to the state budget. This aids the government in budget allocation for national development activities such as public investment, implementation of fiscal policies, and providing financial support to individuals and businesses in difficult times.
In terms of scale, taxes are the primary source of revenue for the state budget. Taxes, fees, and levies are mandatory payments that organizations and individuals must make, except in cases where exemptions are granted. This means that there is no negotiation with state authorities regarding the amount and timing of payments. Failure to meet the deadline may result in the imposition of penalties.
The amount payable for various types of taxes, fees, and levies differs depending on the type of business or the entity subject to taxation. The payment rates are stipulated in various legal documents, which may be issued by relevant state authorities.
Due to the sheer volume and complexity of legal documents, individuals and businesses may encounter difficulties in the implementation process. Therefore, seeking the assistance of legal consulting entities is essential to ensure compliance with obligations.
Differences between Taxes, Fees, and Levies
According to the provisions of Article 3 of the 2019 Tax Management Law, taxes are mandatory payments to the state budget by organizations, households, business households, and individuals.
Tax regulations are extensive in various legal documents, with the highest being the law. In case of conflicts between decrees or circulars regulating taxes, the authority applies the provisions of the Tax Law to resolve them.
As each type of tax is a complex matter, deeply regulated, and has far-reaching effects on various aspects of social life, in addition to the overarching Tax Management Law, each tax type is governed by specific laws such as the Personal Income Tax Law 2007, Corporate Income Tax Law 2008, Export Tax Law, Import Tax Law 2016, etc. Taxes apply nationwide and are imposed on all taxable entities, regardless of administrative territorial units.
On the other hand…
According to the provisions of the 2015 Fee and Levy Law, fees are amounts that organizations and individuals must pay primarily to offset costs and serve when receiving services from state agencies, public non-business units, and organizations assigned by competent state agencies to provide public services.
Levies are fixed amounts that organizations and individuals must pay when receiving public services to serve state management tasks specified in the Fee and Levy Schedule issued with the 2015 Fee and Levy Law.
In addition to the 2015 Fee and Levy Law providing general regulations on fees and levies, specific regulations on fees and levies are governed by documents under the law, such as resolutions, decrees, circulars, and legal documents of local authorities, such as decrees on court fees, fees for notarization, fees for land use rights certificates, etc.
Some types of fees and levies are applied within territorial boundaries, with the collection determined by provincial People’s Councils or city People’s Committees directly under the central government.