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Vietnam Corporate - Other taxes

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Value-added tax (VAT)

VAT applies to goods and services used for production, trading, and consumption in Vietnam (including goods and services purchased from non-residents), with certain exemptions. Depending on the category of goods or services, the VAT rates are as follows:

  • A 0% rate applies to exported goods/services, including goods sold to overseas/non-tariff areas and consumed outside Vietnam/in the non-tariff areas, goods processed for export or in-country export (subject to conditions), goods sold to duty free shops, certain exported services, construction and installation carried out for export processing enterprises, and aviation, marine, and international transportation services.
  • A 5% rate applies generally to areas of the economy concerned with the provision of essential goods and services. This includes clean water, teaching aids, books, unprocessed foodstuffs, medicine and medical equipment, various agricultural products and services, technical/scientific services, rubber latex, sugar and its by-products, social housing, and certain cultural, artistic, and sport services/products.
  • The 10% 'standard' rate applies to activities not specified as exempt or subject to the 0% or 5% rate.

Activities not subject to output VAT

A separate category includes supplies not subject to output VAT, but related input VAT can, nevertheless, be claimed. This category includes the following:

  • Compensation, bonus, subsidies (except those provided in exchange for certain services).
  • Transfers of emission rights and various financial revenues.
  • Certain services rendered by a foreign organisation that does not have a PE in Vietnam where the services are rendered outside of Vietnam, including repairs to means of transport, machinery, or equipment, advertising, marketing, promotion of overseas investment and trade, brokerage activities for the sale of overseas goods and services, training, and certain international telecommunication services.
  • Sales of assets by non-business organisations or individuals not registered for VAT.
  • Transfer of investment projects.
  • Sale of agricultural products that have not been processed into other products or have only been through preliminary processing.
  • Capital contributions in kind.
  • Certain asset transfers between a parent company and its subsidiaries or between subsidiaries of the same parent company.
  • Collections of compensation/indemnities by insurance companies from third parties.
  • Collections on behalf of other parties that are not related to the provision of goods/services (e.g. if company A purchases goods/services from company B but pays to company C, and, subsequently, company C pays to company B, then the payment from company C to company B is not subject to VAT).
  • Commissions earned by (i) agents selling services, including postal, telecommunications, lottery, airlines/bus/ship/train tickets, at prices determined by principals; and (ii) agents for international transportation, airlines, and shipping services entitled to 0% VAT; or (iii) insurance agents.
  • Commissions from the selling of exempt goods/services.
  • Lending or return of machinery, equipment, goods.
  • Goods exported and then re-imported back to Vietnam due to sales returns by overseas customers.

Exempt goods and services

There are stipulated categories of VAT exemptions, including goods/services provided by individuals having annual revenue of 100 million Vietnamese dong (VND) or below, transfer of land use rights, various financial services, capital assignments, certain types of insurance, medical services, education, printing/publishing, public transportation, export of unprocessed natural resources, etc.

When a supply cannot be readily classified based on the tax tariff, VAT must be calculated based on the highest rate applicable for the particular range of goods that the business supplies.

Taxpayers must file VAT returns on a monthly basis by the 20th day of the subsequent month or on a quarterly basis by the 30th day of the subsequent quarter (for companies with prior year annual revenue of VND 50 billion or less).

Customs duties

Import duty rates are classified into three categories: ordinary rates, preferential rates, and special preferential rates.

Preferential rates are applicable to imported goods from countries that have most-favoured-nation (MFN, also known as normal trade relations) status with Vietnam. The MFN rates are in accordance with Vietnam’s World Trade Organization (WTO) commitments and are applicable to goods imported from other member countries of the WTO.

Special preferential rates are applicable to imported goods from countries that have a special preferential trade agreement with Vietnam. Currently effective free trade agreements (FTAs) to which Vietnam is a party include FTAs between ASEAN member states, between ASEAN members and Japan, ASEAN and China, ASEAN and India, ASEAN and Korea, ASEAN and Chile, ASEAN and Australia, ASEAN and New Zealand, Vietnam and Japan, Vietnam and Chile, Vietnam and Korea, Vietnam and the Eurasian Economic Union, and Vietnam and the Customs Union of Russia, Belarus, Kazakhstan.

Import duty exemptions are provided for encouraged projects and goods imported in certain circumstances.

Export duties are charged only on a few items, basically certain natural resources. Rates range from 0% to 40%.

Special sales tax (SST)

SST is a form of excise tax that applies to selected goods and services (see below). For goods, SST is charged at the production or importation stage. Imported goods (except for various types of petrol) are subject to SST at both the import and selling stages. The SST paid at importation will be creditable against SST paid at the selling stage.

The SST rates are as follows:

Products/services SST rate (%)
Cigar/cigarette:
From 1 January 2016 to 31 December 2018 70
From 1 January 2019 75
Spirit/wine:
With ABV ≥ 20°
From 1 January 2017 to 31 December 2017 60
From 1 January 2018 65
With ABV < 20°  
From 1 January 2016 to 31 December 2017 30
From 1 January 2018 35
Beer:
From 1 January 2017 to 31 December 2017 60
From 1 January 2018 65
Automobiles having less than 24 seats:
Prior to 1 January 2018 10 to 70
From 1 January 2018 10 to 150
Motorcycle with cylinder capacity above 125cm3 20
Airplanes 30
Boats 30
Petrol 7 to 10
Air-conditioners (not more than 90,000 BTU) 10
Playing cards 40
Votive paper 70
Discotheques 40
Massage, karaoke 30
Casinos, jackpot games 35
Entertainment with betting 30
Golf 20
Lottery 15

Property taxes

Foreign investors generally pay rental fees for land use rights. The range of rates is wide depending upon the location, infrastructure, and the industrial sector in which the business is operating.

In addition, owners of houses and apartments have to pay land tax under the law on non-agricultural land use. The tax is charged on the specific land area used based on the prescribed price per square metre at progressive tax rates ranging from 0.03% to 0.15%.

Stamp taxes

Certain assets, including houses, land, automobiles and motorcycles, etc., that are subject to registration of ownership are subject to stamp duty. The stamp duty rates vary depending on the asset transferred.

Payroll taxes

Social insurance (SI) contributions

The level of compulsory SI contribution is 26% of total salary, of which 18% is the employers’ obligation and the remaining 8% is the employees’ obligation. The salary subject to SI contribution is the salary stated in the labour contract, but is capped at 20 times the minimum salary (the minimum salary is currently VND 1,210,000 and is subject to change periodically).

Health insurance (HI) contributions

HI contribution rates are 4.5% of total salary, with two-thirds contributed by the employer and one-third by the employee.

Unemployment insurance (UI) contributions

The employer and employee UI contributions are 1% on gross salary each. The employee contribution is capped at 20 times the minimum regional salary (the minimum regional salary varies from VND 2,580,000 to VND 3,750,000, depending on the region; these minimum salaries are subject to change each year).

In April 2017, the Vietnamese government issued a resolution to reduce the employer UI contribution to 0.5% of gross salary. It will apply after being approved by the National Assembly until 31 December 2019.

Natural resources tax (NRT)

NRT is payable by industries exploiting Vietnam’s natural resources, including petroleum, minerals, natural gas, forest products, natural seafood, natural bird’s nests, and natural water. Natural water used for agriculture, forestry, fisheries, salt industries, and sea water for cooling purposes may be exempt from NRT, provided that certain conditions are satisfied. The tax rates vary depending on the natural resource being exploited, ranging from 1% to 40%, and are applied to the production output at a specified taxable value per unit. Various methods are available for the calculation of the taxable value of the resources, including cases where the commercial value of the resources cannot be determined. Crude oil, natural gas, and coal gas are taxed at progressive tax rates depending on the daily average production output.

Environment protection tax (EPT)

EPT is an indirect tax that is applicable to the production and importation of certain goods deemed detrimental to the environment, the most significant of which are petroleum and coal. The tax is calculated as an absolute amount on the quantity of the goods.

The tax rates are as follows:

Goods Unit Tax range (VND)
Petrol, diesel, grease, etc. litre/kg 300 to 3,000
Coal ton 10,000 to 20,000
HCFCs kg 4,000
Plastic bags * kg 40,000
Restricted use chemicals kg 500 to 1,000

* Excludes plastic bags used for packaging or that are 'environmentally friendly'.


Last Reviewed - 25 August 2017

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