Worldwide Tax Summaries
Vietnam witnessed significant recent developments related to base erosion and profit shifting (BEPS) (including MLI and Pillar 2 - Global Minimum Tax) and e-commerce activities. More importantly, Vietnam has made significant efforts to reform a number of key tax laws.
In September 2021, the Ministry of Finance (MoF) officially issued Circular 80/2021/TT-BTC (Circular 80) providing detailed guidance on the Law on Tax Administration on various matters, which also have a chapter focus on the tax filing mechanism for foreign companies doing e-commerce, digital business, and other business in Vietnam without a permanent establishment (PE). The General Department of Taxation (GDT) officially launched the portal for direct tax registration, declaration, and payments by e-commerce companies in Vietnam on 21 March 2022. The GDT published the names of 161 foreign companies registering up to June 2025.
According to the new Law on CIT , which will take effect from 1 October 2025, foreign companies using e-commerce & digital platforms to supply goods/services in Vietnam are now formally included within the scope of the new CIT Law. In addition, these platforms are now officially included in the definition of permanent establishments, potentially impacting double taxation agreement exemption claims.
On 9 February 2022, Vietnam signed the MLI, becoming the 99th jurisdiction to join the Convention. As a result, potentially 75 of Vietnam’s double tax agreements (DTAs) would be amended once the MLI comes into effect. Taxpayers should be aware of these potential changes to DTAs and the impact this may have on their plans for structuring their investments and transactions to claim treaty benefits in Vietnam.
In May 2023, Vietnam deposited its instrument of ratification for the MLI (BEPS Convention). The BEPS Convention entered into force on 1 September 2023 for Vietnam.
On 29 November 2023, the Resolution on Global Minimum Tax policy in Vietnam (‘the Resolution‘) was approved by the National Assembly and came into effect from 1 January 2024.
The Resolution provides that Vietnam will adopt (i) the Qualified Domestic Minimum Top-Up Tax (QDMTT) rule and (ii) the Income Inclusion Rule (IIR). Both rules are intended to protect Vietnam’s tax revenue in the context of Pillar 2 global implementation. The QDMTT rule targets foreign inbound investment while the IIR targets Vietnam’s outbound investment.
Following the OECD’s Global Anti-Base Erosion (GloBE) rules, the top-up tax will be paid to the central state budget, unlike corporate income tax (CIT), which is shared between central and provincial state budgets.
Tax filing obligations:
Safe harbour and penalty relief: The Resolution introduces a transitional country-by-country (CbC) report safe harbour rule that is the same as that in the OECD’s GloBE rules.
The MoF released a decree on the global minimum tax, aligning with international efforts to create a fairer taxation system and address issues like base erosion and profit shifting. For more detailed information and the most recent updates, please visit PwC’s Pillar Two Country Tracker.
All taxes are imposed at the national level. The standard corporate income tax (CIT) rate is 20%. Enterprises operating in the oil and gas industry are subject to CIT rates ranging from 25% to 50%, depending on each contract. Enterprises engaging in prospecting, exploration, and exploitation of certain mineral resources are subject to CIT rates ranging from 40% to 50%, depending on each project.
There is no concept of tax residency for CIT. Business organisations established under the laws of Vietnam are subject to CIT and taxed on worldwide income. 20% CIT shall be applicable to foreign income. There are no provisions for tax incentives for such income.
Foreign organisations carrying out business in Vietnam without setting up a legal entity in Vietnam and/or having Vietnam-sourced income are considered foreign contractors, irrespective of whether the services are performed inside or outside Vietnam. Payments to foreign contractors are subject to Foreign Contractor Tax (FCT), which consists of value-added tax (VAT) and CIT elements. See the Withholding taxes section for more information.
Preferential CIT rates of 10%, 15%, and 17% are available where certain criteria are met.
Special investment incentives are available for research and development (R&D) and large investment projects specified in the Law on Investment.
With the policy relating to the global minimum tax rate, the application of tax incentives could be changed.
In June 2025, the National Assembly has ratified a new Law on CIT, which will take effect from 1 October 2025 and apply for the tax year 2025 onwards. The new CIT law introduces significant changes to existing incentive schemes in terms of incentivised sectors, locations and the available CIT incentives.
Small and medium taxpayers can be entitled to lower tax rates.
See the Tax credits and incentives section for more information.
Taxable profit is the difference between total revenue, whether domestic or foreign sourced, and deductible expenses (see the Deductions section), plus other assessable income.
Taxpayers are required to prepare an annual CIT return, which includes a section for making adjustments to accounting profit to arrive at taxable profit.
There are no local, state, or provincial income taxes in Vietnam.
There is no concept of tax residency for CIT. Enterprises established under the law of Vietnam are subject to CIT in Vietnam. In addition, Vietnam has a broadly worded ‘permanent establishment’ definition.
In Vietnam, a PE is defined as “a fixed place of business through which a foreign enterprise carries out part or the whole of its business or production activities in Vietnam”. Under the new CIT law, the PE of a foreign enterprise shall include:
Foreign enterprises with their PEs in Vietnam shall pay tax on the taxable income earned in Vietnam (irrespective of whether it relates to the PE) and on the taxable income generated out of Vietnam and related to operations of the PEs.
Where a treaty on avoidance of double taxation to which Vietnam is a signatory contains different provisions relating to PE, such treaty shall apply (see the Withholding taxes section for a list of countries with which such treaties exist).
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. The VAT rates are 0%, 5%, 10%, and exempt, depending on the category of goods or services.
In addition, there is a separate category that includes supplies not subject to output VAT, but where related input VAT can, nevertheless, be credited. The Government has approved the resolution which includes a 2% VAT reduction for certain goods/services for the period from 1 July 2025 to 31 December 2026.
On 26 November 2024, the National Assembly approved the new VAT Law No. 48/2024/QH15, which took effect from 1 July 2025. One of the notable points is that the new VAT law supplemented guidance on the transactions of foreign suppliers without PEs in Vietnam having e-commerce and digital-based business activities. Tax payment will be made by these foreign suppliers or withheld and paid by organisations managing digital platforms or Vietnamese entities using the deduction method for VAT declaration.
The VAT rate applicable to services provided by foreign suppliers without PEs in Vietnam to organisations and individuals in Vietnam via e-commerce and digital-based platforms will be changed from 5% to 10%.
From 1 July 2022 onwards, all businesses, economic organisations, business households, and individuals paying tax under the declaration method must use e-invoices (except for certain cases).
Customs duties in Vietnam include import duty and import VAT, applied to most imported goods unless exempt under specific conditions, such as goods for production related to export or investments under incentivized projects. Other duties, like export duty, special sales tax (SST), environment protection tax, anti-dumping tax, anti-subsidy tax, and safeguard tax, apply to limited goods and are considered supplemental import duties in certain cases.
Import duty is calculated ad valorem based on the dutiable value at three rates: ordinary, preferential (for goods from countries with most-favoured-nation status), and special preferential (for goods from countries with free trade agreements (FTA) with Vietnam). Vietnam currently has many effective FTAs. Eligible goods must have the appropriate Certificate of Origin or origin certification.
Import VAT typically ranges from 5% to 10% (maybe reduced to 8%), while export duties apply sparingly to certain natural resources, with rates from 0% to 40%.
SST is a form of excise tax that applies to selected goods and services. Goods that are manufactured and/or imported into Vietnam and subject to SST include cigars/cigarettes, spirits, wine and beer, automobiles, motorcycles, air conditioners, airplanes, petrol, etc. 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 range from 5% for four-wheeled motor vehicles with 16 to under 24 seats to 150% for motor vehicles for the transport of fewer than 24 people.
In June 2025, the Government has approved the amended SST law, which will take effect from 01 January 2026 and adjusts tax rates, such as increase the SST rates for tobacco products, alcohol and beer, and expands coverage to new products, such as sugary beverages.
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%.
In 2024, the Land Law No. 31/2024/QH15 (LOL 2024) was issued and became effective on 1 August 2024, which has made many changes in the stipulation on land.
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.
Please see the Other taxes section in the Individual tax summary.
On November 17, 2020, the National Assembly enacted the new Law on Environment 72/2020/QH14, effective January 1, 2022, which provides comprehensive guidance on environmental protection in Vietnam. While the country lacks specific green taxes, various tax types address environmental concerns, including:
Additionally, on June 20, 2020, the National Assembly passed the Law on Water Resources 28/2023/QH15, effective July 1, 2024, which regulates water management and pollution prevention.
The new Law on Environment also introduces carbon emission quotas for manufacturing companies, requiring them to reduce greenhouse gas emissions and allowing for trading of carbon credits.
Lastly, green incentives provide financial benefits for projects that reduce environmental harm, including tax incentives, land benefits, lower interest rates, and subsidies for eco-friendly products and services.
Branches of foreign entities are subject to the same CIT regime as entities incorporated in Vietnam.
At present, there are no provisions for valuing inventories or determining inventory flows. There is a separate tax guidance for making provision for inventories and certain other provisions.
Gains from the revaluation of assets for the purposes of capital contribution or transfer upon division, de-merger, consolidation, merger, or conversion of business are subject to the standard CIT rate.
Gains derived from the sale of interest in a Vietnam company are in many cases subject to 20% CIT. This is generally referred to as capital gains tax (CGT) although it is not a separate tax as such. The taxable gain is determined as the excess of the sale proceeds less historical cost (or the initial value of contributed charter capital for the first transfer) less transfer expenses.
Recently there has been a move to tax not only the transfer of interest in a Vietnamese entity but also the transfer of interest in overseas parents (direct or indirect) of a Vietnamese company.
Transfers of securities (bonds, shares of public joint stock companies, etc.) by a foreign entity are subject to CIT on a deemed basis at 0.1% of the total sales proceeds. Gains derived by a resident entity from the transfer of securities, however, are taxed at 20%.
According to the new CIT Law, effective from 1 October 2025, foreign companies (whether or not they have a permanent establishment in Vietnam) shall pay tax in Vietnam on the taxable revenue derived from Vietnam (inclusive of the sales proceeds from capital transfer) at a specified percentage. This indicates that for capital transfer, the 20% rate on gains will be replaced by a flat tax rate on the total sales proceeds, effective 1 October 2025.
While the new CIT Law does not specify the exact tax rate, it indicates that the rate will be detailed in the implementing Decree. Based on the draft decree, a flat rate of 2% on sales proceeds from capital transfers but there is certain unclear points in the draft guidance
Dividends received from investments in other companies in Vietnam are not subject to CIT if they have been subject to CIT at the investee companies.
Interest income is taxed at the standard CIT rate.
Certain types of interest income are entitled to tax incentives granted to the investment project, depending on the conditions on which tax incentives are granted.
Currently, royalty income is subject to tax at the standard CIT rate.
There are some types of income (e.g. income from transfer of the right to make capital contribution, income from transfer of immovable property [except for income from investment in social houses], income from transfer of investment projects) that are subject to the standard CIT rate as prescribed under the CIT regulations.
Foreign income, under the domestic tax law, is subject to the standard CIT rate with tax credits available (see Foreign tax credit in the Tax credits and incentives section).
Foreign income shall be taxed when earned. There are no provisions for tax deferral or preferential tax rates for foreign income.
Tax depreciation may differ from accounting depreciation. Depreciation in excess of the rates specified in the regulations on tax depreciation is not deductible.
Pre-establishment expenses (i.e. expenses for setting up a company) and certain expenses (i.e. training, advertising before establishment, costs for the research stage, relocation cost) can be amortised over a period of up to three years from the commencement of operations. In order for pre-establishment and pre-operating expenses to be deductible for CIT purposes, supporting documents to substantiate the fact that these pre-operating expenses were necessarily and legitimately incurred for the establishment of the company should be available.
Interest expenses are generally deductible, except for certain cases.
Tax deductibility of interest on loans is capped at 30% of earnings before interest, taxes, depreciation, and amortisation (EBITDA) when a taxpayer has related-party transactions (see Transfer pricing in the Group taxation section).
Provisions for bad debts are deductible if the provision is made in accordance with the guidance by the MoF. Certain conditions must be satisfied in order to set up a provision for bad debts. In the absence of satisfying the necessary conditions, the provision for bad debts will generally not be deductible.
Administrative penalties and fines are specifically considered non-deductible.
Creditable input VAT, CIT, and other fees/charges are not deductible for CIT purposes.
There is a prescribed list of expenditures that are specifically stated to be non-deductible in the CIT regulations, such as:
For certain businesses (e.g. insurance companies, securities trading, lotteries), the MoF provides specific guidance on deductible expenses for CIT purposes.
Losses may be carried forward fully and consecutively for a maximum of five years. Carryback of losses is not permitted.
There are no special restrictions on the deductibility of royalties, loan interest, and service fees paid to foreign affiliates (except for those paid by branches). However, the payment must be defendable on an arm’s-length basis as required by transfer pricing regulations and substantiated by sufficient supporting documents for CIT deduction purposes (see Transfer pricing in the Group taxation section). Certain contracts for the transfer of technology and foreign loans must be registered with the competent authorities.
There is no provision for any form of consolidated filing or group loss relief in Vietnam.
Decree 132/2020/ND-CP, effective since 2020, outlines new transfer pricing regulations in Vietnam. It defines related parties as entities with at least 25% ownership and extends this definition under Decree 20/2025/NĐ-CP, which was issued on February 10, 2025, and applies from the fiscal year 2024, to include affiliates of credit institutions.
Transfer pricing methodologies align with OECD guidelines, establishing acceptable pricing methods and tightening the acceptable arm's-length range from 25-75% to 35-75%. Taxpayers must identify comparables locally before expanding regionally.
Annual compliance requires declarations of related-party transactions and the methodologies used, with some exemptions for domestic-only transactions. Companies engaged in related-party transactions must maintain detailed transfer pricing documentation, organized into a master file, local file, and country-by-country report, with specific submission timelines.
Taxpayers may be exempt from documentation if their revenue is below certain thresholds or if they have an advance pricing agreement. There has been an increase in audits focused on transfer pricing, including scrutiny of comparables and intra-group service charges.
Additionally, Decree 132 caps the tax-deductibility of interest expenses at 30% of EBITDA, allowing non-deductible interest to be carried forward for five years.
Taxpayers can enter into APAs with tax authorities, although no agreements have yet been finalized with foreign jurisdictions.
There are no thin capitalisation requirements in the tax legislation. However, the level of permitted debt funding will be limited by virtue of licensing requirements. The maximum amount of debt funding is the difference between the licensed investment capital and charter capital.
Decree 132, however, provides that deductible interest on loans shall be subject to the cap of 30% of EBITDA (as above).
Vietnam does not have any CFC legislation.
In respect of Vietnamese enterprises earning income from overseas investment, CIT (or a kind of tax with a nature similar to CIT) paid in a foreign country or paid on behalf by its partner in the country receiving the investment (including tax levied on the dividend) is allowed to be creditable. The credit shall not exceed the CIT amount payable in Vietnam.
The foreign income tax that is entitled to exemption or reduction in accordance with the foreign law shall also be credited.
Tax incentives are granted based on regulated encouraged sectors, encouraged locations, and size of the projects. Business expansion projects, which meet certain conditions, are also entitled to CIT incentives.
The sectors that are encouraged by the Vietnamese government include education, health care, sport/culture, high technology, environmental protection, scientific research and technology development, infrastructural development, processing of agricultural and aquatic products, software production, and renewable energy, certain digital technology products/services, researching and developing, manufacturing semi-conductor chips; AI data centers, Automobile manufacturing and assembly, SME support services, etc.
New investment or expansion projects engaged in manufacturing industrial products prioritised for development are entitled to CIT incentives (e.g. the products support the high technology sector; or the products support the garment, textile, footwear, electronic spare parts, automobile assembly, or mechanical sectors, etc)
Locations that are encouraged include qualifying economic and high-tech zones, high-tech agricultural zones, concentrated digital technology zones, designated difficult socio-economic areas, especially difficult socio-economic areas.
Vietnam offers two common preferential corporate income tax (CIT) rates: 10% for 15 years and 17% for 10 years, starting from revenue generation. Extensions may be granted, after which the rates revert to the standard CIT rate. In certain cases, a 15% rate can apply for the entire project lifespan, while sectors like education and health may enjoy the 10% rate indefinitely.
Special incentives for qualified research and development (R&D) and large projects include a 5% rate for 37 years, with 6 years of tax exemption and a 50% reduction for the next 13 years, alongside possible fee exemptions.
The new CIT law, effective October 1, 2025, includes a grandfather clause allowing existing beneficiaries to maintain their incentives.
Small and medium enterprises (SMEs) may benefit from lower CIT rates—15% for revenues up to VND 3 billion and 17% for revenues between VND 3 billion and VND 50 billion—though these rates do not apply to SMEs linked to larger firms.
The availability/benefits of tax incentives may be affected by the Global Minimum Tax Policy that Vietnam approved, which came into effect from 1 January 2024.
Please refer to Section “Base Erosion and Profit Shifting (“BEPS”) initiatives for more details.
Investors in Vietnam may qualify for tax holidays and reductions, starting with a complete exemption from CIT for a period following their first profits from incentivized activities, followed by a 50% tax rate for a subsequent period. If profits are not generated within three years, the holidays begin in the fourth year. Eligibility criteria are outlined in CIT regulations, and R&D or those entitled to special investment incentive projects receive longer exemption periods.
It is important to note that tax incentives for investments in encouraged sectors generally do not extend to other income of the company, with certain exceptions.
Additional tax reductions may be available for engaging in manufacturing, construction, and transportation activities that employ several female staff and/or ethnic minorities. CIT reduction must correspond with the actual payment for those employees.
Business entities in Vietnam are allowed to set up a tax-deductible R&D Fund. Enterprises can appropriate up to 10% of annual profits before tax to the fund. Various conditions apply.
In December 2024, the government issued a decree on the establishment of an investment support fund for public comment.
Taxpayers that qualify in terms of revenue or investment capital in the high-tech industries can have access to grant support from the fund. The fund is applicable for the financial year 2024 onwards.
Foreign Contractor Tax (FCT) is withheld on payments to foreign contractors.
Foreign Contractor Tax (FCT) applies when a Vietnamese entity contracts with a foreign contractor lacking a licensed presence in Vietnam, regardless of service location. The FCT typically targets payments originating from Vietnam, with exceptions for the pure supply of goods, services consumed outside Vietnam, and specific services performed entirely abroad.
Additionally, FCT is applicable in certain distribution arrangements in Vietnam. Foreign contractors can opt to be deduction-method VAT payers if they comply with the Vietnamese accounting system, paying corporate income tax (CIT) based on actual profits if adequate records exist, or on a deemed-profit basis otherwise.
For foreign contractors applying direct method, VAT and CIT are withheld by the Vietnamese contracting party at stipulated rates, with CIT ranging from 0.1% to 10% and VAT from 2% to 5%. The VAT withheld can be claimed as an input credit.
Moreover, foreign contractors can choose a hybrid method, allowing VAT payment through the deduction method while CIT is calculated on gross turnover using direct method rates, subject to specific conditions.
A summary of VAT and CIT FCT rates for certain activities follows:
| Types of payment | Deemed VAT rate (%) (2) | Deemed CIT rate (%) |
| Distribution and Supply of goods (including in-country import-export and imports, distribution of goods in Vietnam or delivery of goods under Incoterms where the seller bears risk relating to goods in Vietnam) | 1/Exempt (1) | 1 |
| Services/ Services provided via e-commerce, digital platforms by foreign suppliers/ Restaurant, hotel, and casino management services | 5/10 | 5/10 |
| Construction, installation | 3/5 | 2 |
| Transportation | 3 (2) | 2 |
| Interest | Exempt | 5 |
| Royalties | Exempt/5 (3) | 10 |
| Transfer of securities | Exempt | 0.1 |
Notes
Foreign companies engaged in or selling goods/services via e-commerce, digital platform, and other business in Vietnam without a PE now have to directly register and file tax returns in Vietnam for their income from selling goods/services to Vietnamese corporations and individuals. Foreign companies will be awarded with a tax code, declare tax online at the portal of the GDT on a quarterly basis, and pay tax online.
Effective July 1, 2025, operators of domestic and foreign e-commerce platforms must withhold and pay taxes, including personal income tax (PIT) and value-added tax (VAT), for:
Withholding tax rates range from 0.5% to 5% for PIT and 1% to 5% for VAT depending on transaction type.
The above FCT-CIT rates may be reduced by a relevant DTA.
Circular 80/2021 outlines new procedures for claiming tax treaty benefits, including required documentation and a formal review process. The tax authorities have 30 days to assess claims upon receiving sufficient documentation, with an option to extend by 10 days for further examination. They must notify taxpayers of approval or provide reasons for any rejections, aiming to reduce uncertainty for foreign companies applying for tax treaty benefits.
| Recipient | FCT (%) | |
| Interest | Royalties | |
| Non-treaty | 5 | 10 |
| Treaty: | ||
| Algeria (1, 2) | 15 | 15 |
| Australia | 10 | 10 |
| Austria (2) | 10 | 7.5/10 |
| Azerbaijan (2) | 10 | 10 |
| Bangladesh (2) | 15 | 15 |
| Belarus (2) | 10 | 15 |
| Belgium (2) | 10 | 5/10/15 |
| Brunei Darussalam (2) | 10 | 10 |
| Bulgaria (2) | 10 | 15 |
| Cambodia (2) | 10 | 10 |
| Canada (2) | 10 | 7.5/10 |
| China (2) | 10 | 10 |
| Croatia | 10 | 10 |
| Cuba | 10 | 10 |
| Czech Republic (2) | 10 | 10 |
| Denmark (2) | 10 | 5/15 |
| Egypt (1) | 15 | 15 |
| Estonia | 10 | 7.5/10 |
| Finland (2) | 10 | 10 |
| France | 0 | 10 |
| Germany (2) | 10 | 7.5/10 |
| Hong Kong (2) | 10 | 7/10 |
| Hungary | 10 | 10 |
| Iceland (2) | 10 | 10 |
| India (2) | 10 | 10 |
| Indonesia (2) | 15 | 15 |
| Iran (2) | 10 | 10 |
| Ireland (2) | 10 | 5/10/15 |
| Israel (2) | 10 | 5/7.5/15 |
| Italy (2) | 10 | 7.5/10 |
| Japan (2) | 10 | 10 |
| Kazakhstan (2) | 10 | 10 |
| Korea (North) (2) | 10 | 10 |
| Korea (South) (2) | 10 | 5/15 |
| Kuwait (2) | 15 | 20 |
| Laos | 10 | 10 |
| Latvia (2) | 10 | 7.5/10 |
| Luxembourg | 10 | 10 |
| Macau (2) | 10 | 10 |
| Macedonia (1) | 10 | 10 |
| Malaysia (2) | 10 | 10 |
| Malta (2) | 10 | 5/10/15 |
| Mongolia (2) | 10 | 10 |
| Morocco (2) | 10 | 10 |
| Mozambique | 10 | 10 |
| Myanmar (2) | 10 | 10 |
| Netherlands (2) | 10 | 5/10/15 |
| New Zealand | 10 | 10 |
| Norway (2) | 10 | 10 |
| Oman (2) | 10 | 10 |
| Pakistan (2) | 15 | 15 |
| Palestine | 10 | 10 |
| Panama | 10 | 10 |
| Philippines (2) | 15 | 15 |
| Poland | 10 | 10/15 |
| Portugal (2) | 10 | 7.5/10 |
| Qatar (2) | 10 | 5/10 |
| Romania (2) | 10 | 15 |
| Russia | 10 | 15 |
| San Marino | 10/15 | 10/15 |
| Saudi Arabia (2) | 10 | 7.5/10 |
| Serbia (2) | 10 | 10 |
| Seychelles | 10 | 10 |
| Singapore (2) | 10 | 5/10 |
| Slovakia (2) | 10 | 5/10/15 |
| Spain (2) | 10 | 10 |
| Sri Lanka (2) | 10 | 15 |
| Sweden (2) | 10 | 5/15 |
| Switzerland | 10 | 10 |
| Taiwan | 10 | 15 |
| Thailand (2) | 10/15 | 15 |
| Tunisia (2) | 10 | 10 |
| Turkey (2) | 10 | 10 |
| Ukraine (2) | 10 | 10 |
| United Arab Emirates (2) | 10 | 10 |
| United Kingdom (2) | 10 | 10 |
| United States (1, 2) | 10 | 5/10 |
| Uruguay | 10 | 10 |
| Uzbekistan (2) | 10 | 15 |
| Venezuela (2) | 10 | 10 |
Notes
Vietnam has ratified the Multilateral Instrument (MLI) to combat base erosion and profit shifting (BEPS), which took effect on September 1, 2023. Taxpayers should anticipate changes to double tax agreements (DTAs) and their implications for investment structuring in Vietnam.
Additionally, the General Department of Taxation (GDT) announced that the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC) will take effect in Vietnam on December 1, 2023, with information exchange starting January 1, 2024. The GDT provided a list of participating countries and the applicable taxes, including VAT, and instructed local tax departments to comply with the MAAC regulations
The standard tax year is the calendar year. However, different accounting year-ends can be used if approval is obtained from the authorities.
The annual final CIT return and the audited financial statements must be filed no later than the last day of the third month as of the ending date of a calendar year or a financial year.
Enterprises are required to make quarterly provisional CIT payments (no later than the 30th day of the next quarter) based on the quarterly business results. The total provisional CIT payment of four quarters of a tax year must not be less than 80% of the total CIT liability for the year. Any shortfall will be subject to late payment interest, counting from the deadline for payment of the quarter 4 provisional CIT liability.
Final payment of CIT is due with the final CIT return (i.e. the last day of the third month as of the ending date of a calendar year or a financial year).
There are detailed regulations setting out penalties for various tax offences. These range from relatively minor administrative penalties to tax penalties amounting to various multiples of the additional tax assessed.
In practice, imposition of penalties has been arbitrary and inconsistent. However, in recent periods there has been a much tougher stance adopted by the tax authorities. Hence, where tax is paid late (e.g. as a result of a tax audit investigation), there is a significant likelihood of penalties being imposed.
Tax audits are carried out regularly and often cover a number of tax years. Prior to an audit, the tax authorities send the taxpayer a written notice specifying the timing and scope of the audit inspection.
The general statute of limitations for imposing tax is ten years and for penalties is five years. Where the taxpayer does not register for tax or commits evasion liable to criminal prosecution, the tax authorities can collect unpaid tax and penalties at any time.
Vietnamese tax authorities focus on several key areas: transfer pricing among multinationals with extensive inter-company dealings, compliance with CIT incentives, and proper documentation of expenses for VAT and CIT. They also monitor FCT in local transactions and scrutinise indirect transfers to ensure accurate tax collection.
Transfer pricing is commonly discussed in the press, and the enterprises that are attracting the attention of the tax authority are generally multinational companies that have many inter-company transactions, have reported losses for many years, and/or are expanding businesses.
The regulations on the conditions to enjoy CIT incentives are complicated. The guidance to classify new investment and investment expansion (these are subject to different incentive regimes) is not entirely clear. In addition, the ability to apply tax incentives is conditional on compliance to the strict accounting system requirements. Taxpayers are required to self-assess their eligibility to the tax incentives. The tax authorities therefore in tax audits focus on reviewing the taxpayers’ fulfilment of the conditions.
The tax authorities are strictly reviewing the documentation of expenses, including contracts, invoices, evidence of work done/benefit received, etc. Insufficient documentation is resulting in disallowance of input VAT credit/refund and CIT deductibility.
The customs authority has been requested to provide the tax authority with information of companies engaged in in-country import/export transactions in an effort to collect under-declared FCT arising from these transactions.
In several fields, foreign investment will not be licensed or will only be licensed under special conditions. In accordance with the 2020 Law on Investment, a decree was issued that provides the lists of business sectors where market access by foreign investors is not allowed or allowed with certain conditions.
All buying, selling, lending, and transfer of foreign currency needs to be made through credit institutions and other financial institutions authorised by the State Bank of Vietnam (SBV).
Outflow of foreign currency by transfer is authorised for certain transactions, such as payments for imports and services abroad, refund of loans contracted abroad and payment of interest accrued thereon, transfer of profits and dividends, and revenues from transfer of technology.
All monetary transactions in Vietnam must be undertaken in Vietnamese dong. Exceptions are applicable to payments for exports made between principals and their agents, and payments for goods and services purchased from institutions authorised to receive foreign currency payments such as for air tickets, shipping and air freight, insurance, and international communications.
According to the Law on Enterprises, a foreign-invested enterprise may be established as either a single member limited liability or a limited liability with more than one member, a joint-stock company, or a partnership.
Intellectual property (IP) rights in Vietnam are protected under the Civil Code and the Law on Intellectual Property, along with various subordinate legislation. Vietnam is a signatory to key international agreements, including the Paris Convention, Madrid Agreement, and Patent Cooperation Treaty, and has a copyright agreement with the U.S. under the Vietnam-U.S. Bilateral Trade Agreement, which obligates adherence to the Berne Convention.
On November 12, 2018, Vietnam’s National Assembly ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), allowing five years to align its IP laws with CPTPP provisions. Amendments to the IP Law were ratified in 2019 and 2022 to enhance IP protection and meet international commitments, with the latest amendments effective from January 1, 2023, except for agricultural chemical test data protection regulations, which will take effect on January 14, 2024.
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