Vietnam’s tax system for FDI enterprises encompasses four core taxes: Corporate Income Tax at 20%, Value-Added Tax at 10% (temporarily reduced to 8%), Personal Income Tax from 5% to 35%, and Foreign Contractor Tax at varying rates. Between 2025 and 2026, all four undergo major legislative reform simultaneously — requiring rigorous tax administration and compliance protocols across your finance, payroll, and pricing systems.
Vietnam’s Tax Framework for FDI Enterprises
Tax Rate Summary
| Tax | Standard Rate | Current Adjustment | Key Reform |
|---|---|---|---|
| CIT | 20% | 15-17% for SMEs | Law 67/2025, eff. 01/10/2025 |
| VAT | 10% | 8% reduction through 2026 | Law 48/2024, eff. 01/07/2025 |
| PIT | 5-35% (5 brackets) | Self-deduction VND 15.5M/mo | Law 109/2025, eff. 01/07/2026 |
| Import/Export | 0-150% (HS code-based) | FTA preferential rates | Decree 26/2023/ND-CP |
Corporate Income Tax (CIT)
Standard CIT rate is 20% on taxable profit under Law 67/2025/QH15, effective 01/10/2025 and applied from the 2025 tax period. FDI enterprises in priority sectors or disadvantaged areas can qualify for reduced rates of 10% over 15 years — but these CIT incentives must be proactively registered, they don’t apply automatically. For the full breakdown of rates, deductions, and filing procedures, see the CIT Guide for FDI Enterprises.
New under Law 67/2025: domestic SMEs with annual revenue under VND 3 billion pay 15%, and those under VND 50 billion pay 17% — but these tiered rates do not currently apply to FDI enterprises. The law also expands deductible expenses to include ESG and R&D spending — a shift that benefits manufacturing FDI investing in sustainability compliance.
Value-Added Tax (VAT)
VAT applies at 10%, 5%, or 0% depending on goods and services category. A temporary 2% reduction (to 8%) covers most taxable goods and services through December 31, 2026, per Resolution 204/2025/QH15 — excluding telecom, financial services, real estate, and luxury goods.
The new VAT Law 48/2024/QH15 takes effect 01/07/2025 and revises exemption scope for financial services, healthcare, and education. For a complete guide to VAT registration, rates, input-output mechanics, and refund eligibility, see the VAT Guide for FDI Enterprises. For export-oriented operations, VAT refund procedures directly affect cash flow — supplier invoice compliance is the most common refund blocker.
Personal Income Tax (PIT)
Vietnam’s new PIT Law 109/2025/QH15 is effective 01/07/2026, but applies to the full 2026 tax period for salary and business income under transitional rules. The structure simplifies from 7 brackets to 5:
| Bracket | Monthly Income | Rate |
|---|---|---|
| 1 | Up to VND 10M | 5% |
| 2 | >10M to 30M | 10% |
| 3 | >30M to 60M | 20% |
| 4 | >60M to 100M | 30% |
| 5 | Above VND 100M | 35% |
Self-deduction increases to VND 15.5 million/month (~USD 620), dependent deduction to VND 6.2 million/month (~USD 248). Middle-income earners benefit most — rates in the middle tiers drop from 15%/25% to 10%/20%. Submitting correct withholding calculations is solely the employer’s responsibility, as detailed in our PIT Guide for FDI Employers. For expatriate PIT finalization obligations, residency status (≥183 days) determines worldwide vs. Vietnam-sourced income liability.
Import & Export Tax
Manufacturing and trading FDI enterprises face customs duties calculated per HS code under Decree 26/2023/ND-CP. Rates vary from 0% (raw materials for export processing) to 150% (luxury goods). Enterprises in Export Processing Zones (EPZs) benefit from duty exemptions on imported materials for manufacturing and re-export. Vietnam’s extensive FTA network — CPTPP, EVFTA, RCEP — provides preferential tariff rates, but qualifying requires Certificate of Origin documentation and Rules of Origin compliance. For the full breakdown of tariff tiers, FTA rate tables, machinery exemptions, and customs settlement obligations, see the Import & Export Tax guide for FDI →.
Cross-Border Taxation
Foreign Contractor Tax (FCT)
FCT applies when an FDI enterprise pays a foreign entity without a Vietnam permanent establishment for Vietnam-sourced services. Under Circular 103/2014/TT-BTC, deemed rates vary by activity — a common pattern for pure services is 5% VAT + 5% CIT, with higher rates for royalties and management fees.
One frequent dispute: failing to specify whether contract pricing is FCT-inclusive or exclusive. Inclusive pricing shifts the burden to the foreign contractor. Exclusive pricing means the FDI enterprise grosses up — and the cost difference is material.
Global Minimum Tax
Vietnam adopted Pillar Two via Decree 236/2025/ND-CP, effective 15/10/2025. The Qualified Domestic Minimum Top-up Tax (QDMTT) ensures a 15% effective tax rate floor for multinational groups with consolidated revenue ≥€750 million. QDMTT applies from FY2024, with Income Inclusion Rule (IIR) obligations for parent entities.
If an FDI group enjoys CIT incentives that push the effective rate below 15%, the QDMTT top-up exposure should be modeled immediately. The risk is double-counting — paying top-up tax in Vietnam while also facing IIR liability in the parent jurisdiction.
Profit Repatriation
After-tax profits can be remitted abroad through the DICA (Direct Investment Capital Account) once the enterprise has completed the annual audit and received tax clearance. Two blockers: financial statements showing accumulated losses prohibit remittance, and failure to complete CIT finalization delays tax clearance. Repatriation timing should be coordinated with the annual audit cycle.
Tax Incentives & Benefits
CIT Incentives for FDI
FDI enterprises in industrial zones, economic zones, or high-tech parks can qualify for CIT rates of 10-17% over 10-15 years, plus tax holidays (2-4 years full exemption, 4-9 years at 50% reduction). Eligibility depends on sector, location, and capital scale.
The critical point most guides miss: CIT incentives require proactive registration. FDI enterprises do not automatically receive reduced rates by operating in a qualifying zone. Incentive claims must be filed with CIT finalization — and separate accounting for incentive-eligible and non-eligible activities is mandatory.
VAT Refund
Two refund paths exist for FDI. Export VAT refund: enterprises with uncredited input VAT of ≥VND 300 million (after offsetting domestic output VAT) can claim refunds — capped at 10% of export revenue. Investment-phase VAT refund: pre-revenue projects can reclaim VAT on capital expenditure during the setup phase.
In both cases, customs-tax joint audits verify refund claims. FDI enterprises should reconcile input invoices monthly — waiting until refund filing to discover invalid supplier invoices risks billions in blocked credits.
Compliance Operations
Filing Deadlines & Calendar
| Obligation | Deadline | Frequency |
|---|---|---|
| VAT | 20th of following month or last day of first month of following quarter | Monthly / Quarterly |
| CIT provisional | 30th of first month of following quarter | Quarterly |
| CIT finalization | 90 days after fiscal year-end | Annual |
| PIT finalization | 90 days after fiscal year-end | Annual |
| Financial statements + Audit | 90 days after fiscal year-end | Annual |
Late filing fines range from VND 2 million to VND 25 million per Decree 125/2020/ND-CP. Late payment interest runs at 0.03% per day under the Tax Administration Law — uncapped. A VND 1 billion tax liability delayed 90 days generates VND 27 million in interest alone.
E-Invoice Requirements
Every enterprise must register and issue electronic invoices through a tax authority-connected provider. Paper invoices are no longer accepted. Invalid e-invoices get rejected — and rejected invoices mean the buyer loses input VAT credit. Invoice accuracy is both the issuer’s compliance obligation and a customer relationship concern.
Statutory Audit & Chief Accountant
All foreign-invested enterprises must complete annual statutory audits regardless of size — a requirement unique to FDI companies in Vietnam. Audit reports must be submitted within 90 days of fiscal year-end to the Tax Authority, Department of Finance (formerly DPI), and GSO.
Every enterprise must appoint a chief accountant who meets Vietnamese qualification requirements. Foreign nationals can serve in this role under specific conditions. The chief accountant bears personal liability for financial statement accuracy — which is why outsourcing this function is increasingly common among FDI companies managing compliance risk.
Transfer Pricing & Related-Party Rules
Related-party transactions require documentation under Decree 132/2020/ND-CP, as amended by Decree 20/2025/ND-CP. FDI enterprises must prepare Local File, Master File, and Country-by-Country Reports if revenue thresholds are met. Transfer pricing documentation failure is the #1 audit trigger in Vietnam.
Interest on related-party debt exceeding 30% of adjusted EBITDA is non-deductible. Disallowed interest can be carried forward for 5 years — but a drop in EBITDA at year-end can unexpectedly trigger the cap. FDI enterprises should monitor intercompany debt-to-EBITDA ratios quarterly, not just at year-end.
Accounting & Financial Reporting
Tax compliance and accounting are inseparable in Vietnam. FDI enterprises must maintain books under Vietnamese Accounting Standards (VAS), which diverge from IFRS in several areas critical for multinational reporting:
- Revenue recognition: VAS lacks IFRS 15’s five-step model, creating timing differences in contract-based revenue
- Lease treatment: VAS does not adopt IFRS 16 — operating leases remain off-balance-sheet, affecting debt covenant calculations
- Fair value: VAS uses historical cost for most assets; IFRS requires fair value for investment property and financial instruments
- Consolidation: Parent companies reporting under IFRS must reconcile VAS-based subsidiary figures, often requiring dual-book adjustments
The landmark Circular 99/2025/TT-BTC — effective January 2026 — replaces Circular 200 entirely, representing the biggest accounting reform since 2003. FDI enterprises previously operating under Circular 200 must update chart of accounts, journal entry templates, and financial statement formats.
Beyond bookkeeping, FDI companies face statutory audit requirements, chief accountant obligations, and 5+ periodic government reports to Department of Finance (formerly DPI), GSO, DOIT, SBV, and DOLISA — all with separate deadlines and penalties. For the complete breakdown of VAS standards, IFRS adoption roadmap, and all FDI reporting obligations, see the Vietnam Accounting Compliance guide →.
Risks & Penalties
Common Audit Triggers
Three patterns consistently trigger tax audits: (1) high related-party transaction volumes paired with persistent losses, (2) aggressive CIT incentive claims without proper separate accounting, and (3) VAT refund applications with irregular supplier invoice patterns.
An audit initiated for one tax type routinely expands. A VAT refund audit that uncovers supplier invoice irregularities leads inspectors to examine CIT deductibility of the same expenses, PIT withholding compliance for the workforce, and FCT obligations on related cross-border payments. This cascading pattern means a single documentation gap in one area can trigger reassessment across all four core taxes.
Late Filing & Payment Penalties
All tax obligations are governed by the Tax Administration Law (Law 38/2019/QH14, amended by Law 56/2024/QH15), which defines filing procedures, audit powers, and penalty frameworks. Late filings incur fixed fines of VND 2-25 million (~USD 80-1,000) under Decree 125/2020/ND-CP. Late payment interest at 0.03%/day compounds without cap. A VND 1 billion (~USD 40,000) tax liability delayed 90 days generates VND 27 million in interest alone. The practical risk extends beyond penalties — repeated late filings create audit flags and cash flow drain.
Indochina Link Vietnam’s certified CPAs manage the full tax compliance lifecycle — from CIT finalization and VAT refund coordination to transfer pricing documentation and GMT readiness assessments for FDI enterprises. Schedule a consultation →
This overview reflects Vietnam tax regulations as of March 2026. Tax rules change frequently — consult qualified tax advisors for compliance guidance specific to each enterprise’s operations.
