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Tax Considerations in Vietnam

Since Vietnam obtained memberships of international organisations, its tax regime has become more aligned with international rules and practices. The Law on Tax Administration, updated in 2016, provides regulations on tax administration, management of information and tax collection.

An overview of the major types of taxes levied in Vietnam is provided in the table below and tax advice should be sought. Other taxes may also be applicable, including property tax, special sales tax, environmental tax and natural resources tax.

TaxScopeRate
Corporate Income Tax (CIT)

Any organisation conducting business and earning taxable income in Vietnam. There are exceptions available and some expenses are deductible from taxable income.

 

20% to 50%
Value added tax (VAT)

VAT is levied on the value added at each stage of the production and distribution supply chain. The amount levied depends on the type of good.

0%, 5% or 10% (standard rate is 10%)

 

Personal Income Tax (PIT)

Individuals are subject to PIT due to their tax resident status, i.e. PIT will apply on their worldwide incomes for tax residents, as well as on Vietnam sourced income for tax non-residents.

5% to 35%
Foreign contractors tax (FCT)

Imposed on foreign business, individuals and foreign organisations earning Vietnam-sourced income. FCT is applicable to interest, royalties, service fees, leases, etc.

Hong Kong companies and individuals in Vietnam can apply for FCT exemption for part of CIT/PIT through the double tax agreement signed between Hong Kong and Vietnam.

Comprise a mix of PIT, CIT and VAT at varying rates

 

A Practical Guide to Doing Business in Vietnam

  1. Regulatory Environment
  2. Establishing a Presence
  3. Intellectual Property Protection
  4. Staff Recruitment
  5. Tax Considerations
  6. Import/Export Procedures
  7. Further Information


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