Tax & Compliance

How Vietnam taxes a foreign-invested business

A Vietnamese company owned by foreign investors is taxed exactly as a Vietnamese-owned company is. It pays corporate income tax (CIT) on its worldwide profit, charges and recovers value added tax (VAT), withholds personal income tax (PIT) from its employees, pays import duties at the border, and files the same monthly, quarterly and annual returns with the same provincial tax office. There is no separate regime for foreign-invested enterprises and no tax on the remittance of profits. The rules that a foreign investor feels most are those on the money that crosses the border: the tax withheld when the Vietnamese company pays its foreign parent or suppliers, the tax on selling the investment, and the conditions the company must satisfy before its profits can be paid out.

Administration sits with the Ministry of Finance. The General Department of Taxation became the Tax Department (Cục Thuế) on 1 March 2025, and its local network was reorganised in 2025 into provincial tax offices; the General Department of Customs became the Customs Department (Cục Hải quan), working through 20 regional customs branches. Almost every filing is electronic and signed with the company's digital signature. The recurring deadlines are gathered in one calendar in Compliance calendar after licensing; this chapter explains the substance behind them.

Profits and turnover: CIT and VAT

The standard CIT rate is 20% under Law No. 67/2025/QH15, which applies from the 2025 tax period with Decree No. 320/2025/ND-CP and Circular No. 20/2026/TT-BTC. Enterprises with annual revenue up to VND 3 billion pay 15% and those up to VND 50 billion pay 17%, and from 2026 those with revenue of VND 1 billion or less are exempt. Expenses are deductible only if they relate to the business, are supported by lawful invoices and, from VND 5 million, are paid other than in cash; losses carry forward for five years. Residence, permanent establishment, the expense rules, depreciation and the separate accounting that incentivised projects must keep are in Corporate income tax. Preferential rates and tax holidays are in Investment incentives and are not repeated here.

VAT is charged at 10%, 5% or 0% under Law No. 48/2024/QH15, in force since 1 July 2025, and most goods and services taxed at 10% are taxed at 8% until 31 December 2026. A company using the credit method recovers the VAT it pays on inputs, and exporters and companies building a new project can claim refunds once unrecovered input VAT reaches VND 300 million. Every invoice is an electronic invoice registered with the tax authority, under Decree No. 123/2020/ND-CP as amended by Decree No. 70/2025/ND-CP. Rates, exemptions, credit, refunds, invoicing and the rules for foreign suppliers of digital services are in VAT and e-invoicing.

Money leaving Vietnam: contractor tax, treaties, transfer pricing and exit

When a Vietnamese company pays a foreign organisation that has no permanent establishment in Vietnam, for services, interest, royalties or equipment hire, it normally withholds foreign contractor tax: a VAT element and a deemed CIT element calculated on the payment, for example 5% for services and interest and 10% for royalties under Article 12 of Decree No. 320/2025/ND-CP, declared within ten days of payment. Dividends paid to foreign corporate shareholders bear no withholding tax at all. Vietnam has double taxation agreements with around 80 jurisdictions, though none in force with the United States, and relief is claimed by dossier under Circular No. 95/2026/TT-BTC. See Foreign contractor tax and tax treaties.

Dealings between related parties must be priced at arm's length and documented under Decree No. 255/2026/ND-CP, which applies from the 2026 tax year; net interest expense of a company with related-party transactions is deductible only up to 30% of EBITDA; and large groups face the 15% global minimum tax under Resolution No. 107/2023/QH15 and Decree No. 236/2025/ND-CP. These are in Transfer pricing, interest and the global minimum tax. When a foreign company sells capital in a Vietnamese company, it pays CIT at 2% of the gross proceeds, gain or loss, and the Vietnamese target company must usually declare it within ten days; securities are taxed at 0.1%. Exit taxes, dividends and the tax conditions on paying profits abroad are in Tax on share transfers and dividends.

People and goods: PIT and customs

Employees resident in Vietnam, which includes anyone present for 183 days in a calendar year or in the twelve months from arrival, or who has a home in Vietnam, are taxed on their worldwide income at progressive rates from 5% to 35% under Law No. 109/2025/QH15; non-residents pay a flat 20% on Vietnamese employment income. Employer-paid housing, allowances and tax equalisation all enter the computation, and expatriates must finalise their tax before they leave. See Personal income tax and expatriates, and Chapter 4 for payroll, insurance and work permits.

Goods crossing the border bear import duty under Law No. 107/2016/QH13, as amended, at most-favoured-nation rates or, with proof of origin, at the lower rates of Vietnam's free trade agreements such as CPTPP, EVFTA, UKVFTA and RCEP, together with import VAT and, for some goods, special consumption tax and environmental protection tax. Machinery for an incentivised project and inputs for export production can be imported duty-free, and export processing enterprises sit outside the customs territory. The rules, the valuation regime and the post-clearance audit that follows are in Customs and import duties.

Compliance, audits and disputes

Law No. 108/2025/QH15 on Tax Administration took effect on 1 July 2026. It keeps the familiar deadlines, including provisional CIT each quarter that must reach 80% of the year's liability and the annual finalisation by the last day of the third month after year end, and the late-payment interest of 0.03% a day. It shortens tax audits, moves tax inspection to the general inspection law, gives the tax authority new powers to suspend business and business registration changes, and allows the tax authority to collect underpaid tax for up to ten years back. Penalties run from fines of up to VND 25 million for late returns, through 20% of tax understated, to one to three times the tax evaded under Decree No. 125/2020/ND-CP as amended by Decree No. 310/2025/ND-CP. Legal representatives and beneficial owners of a company with a large overdue tax debt can be stopped from leaving Vietnam. Audits, penalties, complaints and court challenges are in Tax administration, audits and disputes.

How to use this chapter

A new investor should read the CIT and VAT sections first, then the section on foreign contractor tax before agreeing any fee, loan or licence with its parent, and the transfer pricing section before the first intra-group invoice is issued. Exit planning starts on entry: the 2% tax on gross proceeds and the profit remittance conditions affect the choice of holding company and the way capital is contributed, which is why the share transfer section should be read alongside Profit remittance and repatriation of capital and Chapter 8. Each section ends with the related FAQs, the official sources and a question you can put to Lawbot about your own facts. The figures are stated at 10 October 2026; the temporary 8% VAT rate and several transitional rules end on 31 December 2026, so check the position again for 2027 transactions.