Vietnam

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/services 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, 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. These include clean water, teaching aids, books, unprocessed foodstuffs, medicine and medical equipment, husbandry feed, 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 not subject to VAT, exempt, or subject to the 0% or 5% rate.

On 29 June 2024, the National Assembly approved a VAT reduction for the period from 1 July 2024 to 31 December 2024. The 2% VAT reduction will be applicable to goods and services that are currently subject to 10% VAT (with certain exceptions).

Goods or services where VAT declaration and payment are not required

A separate category includes supplies not subject to output VAT, but where related input VAT can, nevertheless, be credited. 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, which 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.
• Transfer of investment projects with certain conditions.
• Sale of agricultural products that have not been processed into other products or have only been through preliminary processing.
• Capital contributions in kind.
• 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 sale of exempt goods/services.
• 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 certain agricultural products; goods/services provided by individuals having annual revenue of 100 million Vietnamese dong (VND) or below; imported or leased drilling rigs, aeroplanes, and ships of a type that cannot be produced in Vietnam; transfer of land use rights (LUR) (detailed guidance is provided to specific cases); various financial services; various securities activities including fund management; capital assignments; foreign currency trading; debt factoring; certain types of insurance; medical services and elderly/disabled people care service; postal and telecommunications provided by the government; 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 last day of the first month of the following quarter (for companies with prior year annual revenue of VND 50 billion or less).

E-invoices

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

Customs duties generally comprise import duty and import VAT. Most goods imported into Vietnam are subject to import duty and import VAT, except those that meet the conditions for exemption, such as goods imported for the production of subsequently exported goods under toll manufacturing or contract manufacturing arrangements or imported goods of export processing enterprises’ production activities, goods imported to form fixed assets of incentivised investment projects (in this case import VAT is not exempted), etc.

In addition to import duty and import VAT, there are also export duty, import special sales tax (SST), environment protection tax (EPT), anti-dumping tax, anti-subsidy tax, and safeguard tax, which are applied to only a limited number of goods. Anti-dumping tax, anti-subsidy tax, and safeguard tax are all considered as supplemental import duties applicable to the imported goods under certain scenarios.

Import duty is computed on an ad valorem basis (i.e. multiplying the imported good’s dutiable value by the corresponding import duty rate).

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 line with Vietnam’s World Trade Organization (WTO) commitments and are applicable to goods imported from other WTO member countries.

Special preferential rates are applicable to imported goods from countries that have a special preferential trade agreement (or free trade agreement [FTA]) with Vietnam. Currently, effective FTAs to which Vietnam is a party include:

• The Association of Southeast Asian Nations (ASEAN) Trade in Goods Agreement (i.e. the ATIGA).
• The Agreement on Comprehensive Economic Partnership among Member States of the Association of Southeast Asian Nations and Japan (i.e. the AJCEP).
• The Agreement on Trade in Goods of the Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations and the People’s Republic of China (i.e. the ACFTA).
• The ASEAN – Hong Kong, China Free Trade Area (i.e. the AHKFTA).
• The Agreement on Trade in Goods under the Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations and the Republic of India (i.e. the AIFTA).
• The Agreement on Trade in Goods under the Framework Agreement on Comprehensive Economic Cooperation among the Governments of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea (i.e. the AKFTA).
• The Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (i.e. the AANZFTA).
• The Regional Comprehensive Economic Partnership Agreement between ASEAN Member States and Australia, China, Japan, the Republic of Korea, and New Zealand (i.e. the RCEP).
• The Free Trade Agreement between the Government of the Republic of Chile and the Government of the Socialist Republic of Viet Nam (i.e. the VCFTA).
• The Free Trade Agreement between the Socialist Republic of Viet Nam and European Union (i.e. the EVFTA).
• The Free Trade Agreement between the Socialist Republic of Viet Nam, of the one part, and the Eurasian Economic Union and its Member States, of the other part (i.e. the VN – EAEU FTA).
• The Free Trade Agreement between the Socialist Republic of Viet Nam and the State of Israel (i.e. the VIFTA).
• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (i.e. the CPTPP).
• The Free Trade Agreement between the Government of the Socialist Republic of Viet Nam and the Government of the Republic of Korea (i.e. the VKFTA).
• The Agreement between Japan and the Socialist Republic of Viet Nam for an Economic Partnership (i.e. the VJEPA).
• The Free Trade Agreement between the Socialist Republic of Viet Nam and the United Kingdom of Great Britain and Northern Ireland (i.e. the UKVFTA).

In addition, negotiations on the FTA with the European Free Trade Association (Vietnam and Iceland, Liechtenstein, Norway, and Switzerland), with the United Arab Emirates, and between ASEAN member states and Canada are in progress.

To be eligible for preferential rates or special preferential rates, the imported goods must be accompanied by an appropriate Certificate of Origin. When goods are sourced from non-preferential treatment/non-favoured countries, the ordinary rate (being the MFN rate with a 50% surcharge) is imposed.

Import VAT is applied to imported goods at a rate most commonly of 10%. The VAT reduction as mentioned above is also applied at import stage.

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. 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 7% to 150% for motor vehicles for the transport of fewer than 24 people.

The National Assembly ratified a new law amending and supplementing a number of provisions under certain laws, including the Law on SST. Accordingly, SST rates applicable to electric cars will be significantly reduced over the next five years, effective from 1 March 2022.

In February 2023, the MoF released a proposal to revise the SST law for public comments. In July 2023, the government assigned the MoF to complete the dossier requesting the amendment of Law on SST. The government also requested to amend the law, including the legal basis for tax bases and SST rates, hybrid tax calculation method for certain products, and appropriate solutions to increase SST rates.

In June 2024, the MoF released an updated version of the draft SST Law, which sets out a roadmap for tax rate increases from 2026 through 2030 and expands the scope of SST to include new products and services, notably beverages with a certain sugar content. 

The draft law is proposed to be submitted to the National Assembly for consideration at the 8th National Assembly meeting in October 2024 and for approval at the 9th National Assembly meeting in May 2025.

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%.

Recently, the land rental fees are entitled to a 30% reduction for 2022 and 2023 to support the economic restoration and development after COVID-19.

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

Please see the Other taxes section in the Individual tax summary.

Green taxes

On 17 November 2020, the National Assembly issued the new Law on Environment 72/2020/QH14, which took effect from 1 January 2022, setting out a comprehensive guidance on environmental protection matters. 

Environmental or green taxes include taxes on energy, transport, pollution, and resources. Energy taxes are taxes on energy products and electricity used for transport, such as petrol and diesel, and for other purposes, such as fuel oils, natural gas, coal, and electricity used in heating.

Below are some common types of green taxes.

Natural resource 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 vary among the goods applied from VND 500/kg for restricted use chemicals to VND 50,000/kg for plastic bags.

Carbon emission quota

In the new Law on Environment, the government introduced the concept of a carbon trading plan and an intention to impose a cap on carbon emission, i.e. carbon emission quota to all manufacturing companies that emit carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3). Enterprises that are in the list of sectors producing greenhouse gas need to be inspected.