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. The business license fee has not been collected since 01/01/2026. 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 255/2026/ND-CP. 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.

Under Article 15 of VAT Law 48/2024/QH15 and Decree 181/2025/ND-CP, VAT refunds (minimum VND 300 million in uncredited input VAT) apply to: (1) new investment projects in the pre-operational phase; (2) exported goods and services (capped at 10% of export revenue in the period); and (3) businesses producing goods or services subject to the 5% VAT rate with uncredited input VAT after 12 consecutive months or 4 quarters. Standard domestic businesses (8% or 10% VAT) carry uncredited input VAT forward to subsequent periods rather than claiming cash refunds. Refund procedures follow Decree 252/2026/ND-CP and Circular 89/2026/TT-BTC.

FCT applies to payments made to foreign entities without a permanent establishment in Vietnam. Direct rates comprise a CIT component (0.1%–10%, commonly 1%–10%) and a VAT component (1%–5%) depending on the transaction, while eligible software and technology transfers are not subject to VAT. Overseas digital providers register and declare directly via the eTax portal, whereas Vietnamese buyers withhold and remit FCT on the contractor's behalf in statutory cases under Decree 252/2026/ND-CP.

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: school fees for expatriates' children (kindergarten through high school) and statutory allowances meeting current regulations can be excluded from taxable income, whereas employer-paid housing is included in taxable income up to 15% of total taxable income (excluding housing) under Article 8 of Decree 253/2026/ND-CP. Note that PIT Law 109/2025/QH15 increases personal and dependent deductions to VND 15.5 million and VND 6.2 million per month from January 2026.

Tax inspections typically cover the last 3–5 fiscal years (matching the 05-year penalty limitation period for under-declaration), though authorities can collect back taxes and late interest for up to 10 years under Article 44 of Law 108/2025/QH15. Common triggers include VAT refund claims, consecutive reported losses, transfer pricing risks, and industry compliance campaigns. Outcomes include tax adjustments, penalties of up to 20% of underpaid tax, and late payment interest of 0.03% per day. Well-organized, audit-ready documentation reduces exposure.

Yes. Under Article 7 of Decree 320/2025/ND-CP guiding CIT Law 67/2025/QH15, tax losses after annual finalization must be carried forward entirely and consecutively against taxable income of subsequent years, for up to 05 years starting from the year following the loss year. Any remaining losses after the 5-year period cannot be carried forward. Proper planning of loss utilization is critical, especially for companies in their early years of operation.