Tax Compliance & Advisory

FDI enterprises face four main taxes: Corporate Income Tax (CIT) at 20% (with 15-17% SME tiers from Oct 2025), Value-Added Tax (VAT) at 10% (reduced to 8% for most sectors until Dec 2026), Personal Income Tax (PIT) at 5–35% for resident employees, and Foreign Contractor Tax (FCT) on overseas payments. Business License Tax is also payable annually. Each has strict filing deadlines.

Yes—and they're frequently overlooked. The new Law on CIT 2025 (effective Oct 2025 via Decree 320/2025) shifts incentives toward high-tech, green, and digital sectors. Preferential rates of 10-17% and tax holidays (up to 4 years exemption plus 9 years at 50% reduction) remain available but require strict criteria compliance. You must proactively claim these; authorities won't apply them for you.

All related-party transactions must comply with the arm's length principle under Decree 132/2020 (as amended by Decree 20/2025). Companies must prepare annual Transfer Pricing Documentation and submit declaration appendices with their CIT return. Non-compliance brings significant surcharges on adjusted income. This applies to any FDI enterprise dealing with its parent or sister entities.

During the investment phase (before generating revenue), you can claim a refund when accumulated input VAT reaches VND 300 million. For operating companies, refund is available when input VAT exceeds output VAT for 12 consecutive months (minimum VND 300 million). Export enterprises can claim refunds on input VAT for exported goods and services. Reference: Circular 80/2021 (as amended by Circular 94/2025).

FCT is a withholding tax on payments to foreign entities lacking a permanent establishment in Vietnam. Rates blend a CIT component (1–10%) and VAT component (2–5%) depending on the service. Notably, from July 2025, digital platforms face a standard 10% VAT. Your Vietnamese company must withhold and remit FCT, otherwise it bears the full liability.

Tax residents (present in Vietnam 183+ days) are taxed on worldwide income at progressive rates (5–35%). Non-residents pay a flat 20% on Vietnam-sourced income. Contract structuring matters heavily: certain housing, school fee, and relocation allowances can be tax-exempt if documented correctly. Note that the new PIT Law 109/2025 increases dependent deduction thresholds significantly from January 2026.

The tax authority can audit the last 5 fiscal years. Common triggers include VAT refund claims, consecutive reported losses, transfer pricing concerns, and industry-wide compliance campaigns. Outcomes range from adjustments and penalties (up to 20% of underpaid tax) to interest charges (0.03% per day). Having well-organized, audit-ready documentation significantly reduces exposure.

Yes. Under Article 16 of the CIT Law, tax losses can be carried forward for up to 5 consecutive years following the year the loss occurred. The loss must be allocated to specific years within the 5-year window. Unused losses after 5 years are forfeited. Proper planning of loss utilization is critical — especially for companies in their first years of operation.