Vietnam

Inventory valuation

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.

Asset revaluation

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.

Capital gains

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%.

The draft law includes a proposal to drastically amend the Capital Gains Tax regime effective from 1 January 2026. Under this proposal, the 20% rate on net gains would be replaced by a 2% rate on sales proceeds.

Dividend income

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

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.

Royalty income

Currently, royalty income is subject to tax at the standard CIT rate.

Other significant items

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, etc) which are subject to standard CIT rate as prescribed under the CIT regulations.

Foreign income

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.