Vietnam’s tax system for foreign direct investment (FDI) enterprises centers on four primary pillars: Corporate Income Tax (CIT) at 20%, Value-Added Tax (VAT) at 10% (temporarily 8% for most sectors), Personal Income Tax (PIT) from 5% to 35%, and customs tariffs or Foreign Contractor Tax (FCT). For multinational groups, fiscal governance also covers Global Minimum Tax (GMT) top-up rules, transfer pricing controls, and foreign exchange limits on outbound profit remittances.
The 2025-2026 cycle replaced most of the tax rulebook. Four foundational tax laws now apply side by side: CIT Law 67/2025/QH15 (effective October 1, 2025, applicable from the 2025 tax period), VAT Law 48/2024/QH15 (effective July 1, 2025), PIT Law 109/2025/QH15 (effective July 1, 2026), and Tax Administration Law 108/2025/QH15 (effective July 1, 2026, replacing Law 38/2019/QH14). The legacy business license tax is permanently abolished from January 1, 2026, under National Assembly Resolution 198/2025/QH15.
For finance directors, the practical work is updating the ERP chart of accounts, vendor documentation and withholding mechanics before the first 2026 filings. This guide maps each tax and links to the detailed article.
1. Vietnam’s Corporate Tax Framework for FDI Enterprises
1.1. Tax Rate Summary
| Tax category | Baseline rate | Preferential / Adjusted scope | Legal basis |
|---|---|---|---|
| Corporate Income Tax (CIT) | 20% | Tiered 15-17% by preceding-year revenue; 10-17% for priority FDI projects | Law 67/2025/QH15 |
| Value-Added Tax (VAT) | 10% | 0%, 5%, and temporary 8% reduction through December 31, 2026 | Law 48/2024/QH15 & Resolution 204/2025/QH15 |
| Personal Income Tax (PIT) | 5-35% | 5 progressive brackets; employer withholding at source | Law 109/2025/QH15 |
| Foreign Contractor Tax (FCT) | Deemed rates | 1-5% VAT plus 0.1-10% CIT depending on service nature | Circular 69/2025 & Circular 20/2026 |
| Customs import / export duty | 0-150% | Preferential tariff schedules under bilateral/multilateral FTAs | Decree 26/2023/ND-CP |
| Business license fee | VND 0 | Permanently abolished starting January 1, 2026 | Resolution 198/2025/QH15 |
1.2. Corporate Income Tax (CIT)
The standard CIT rate is 20% on net taxable profit under Law 67/2025/QH15. CIT is the main direct tax charge and the usual focus of tax audits. The law adds a revenue-tiered structure for smaller enterprises:
| Preceding tax year turnover | CIT rate | Who it covers |
|---|---|---|
| Up to VND 3 billion | 15% | Smallest enterprises |
| Over VND 3 billion to 50 billion | 17% | Mid-sized enterprises |
| Over VND 50 billion | 20% | Standard rate |
Tier eligibility rests on gross revenue in the preceding fiscal year. A company incorporated during the year whose expected revenue stays within VND 3 billion or VND 50 billion pays quarterly provisional CIT at 15% or 17%, then finalizes on actual revenue (Decree 320/2025/ND-CP). The 15% and 17% rates do not apply to a subsidiary or affiliate whose related enterprise fails the revenue condition, and total revenue includes financial and other income. Foreign-invested entities generally pay the 20% standard rate unless they qualify for an investment incentive.
From 1 January 2026, a company established under Vietnamese law with total annual revenue of up to VND 1 billion is exempt from CIT, except subsidiaries of, or entities related to, an enterprise that does not meet the conditions (Law 09/2026/QH16; Decree 141/2026/ND-CP). For the 2026 and 2027 tax periods, an enterprise with annual revenue of up to VND 10 billion receives a 30% reduction in CIT payable under Resolution 43/2026/QH16 (effective 24 August 2026).
CIT is charged on taxable income (turnover minus deductible expenses plus other earnings, after exempt revenues and losses carried forward). Losses carry forward for up to 5 years. Under Decree 320, losses from real estate transfers cannot offset operating profits from incentive-qualifying activities.
An expense is deductible when it meets three cumulative conditions: a genuine link to operations, valid electronic invoices, and compliant non-cash bank payment for transactions above the threshold. The law also widens deductions for verified R&D, innovation, and digital transformation; criteria are in our guide to Vietnam corporate tax for FDI.
1.3. Value-Added Tax (VAT)
VAT in detail has its own guide: Vietnam VAT for FDI. In short, VAT is an indirect consumption tax on the credit-invoice method at rates of 0%, 5%, and 10% under Law 48/2024/QH15 (effective July 1, 2025). Resolution 204/2025/QH15 extends the cut from 10% to 8% for most eligible items through December 31, 2026.
The 10% rate stays for telecommunications, financial activities, banking, securities, insurance, real estate trading, metal products, mining products (except coal), and goods and services subject to special consumption tax (except petrol), per the appendices to Decree 174/2025/ND-CP. Multi-sector enterprises show the rate for each line on the electronic invoice, and invoices at the wrong rate are adjusted under the invoice rules.
Transactions with an invoice value of VND 5 million or more (VAT included) must be settled by non-cash payment (Article 26 of Decree 181/2025/ND-CP lists the exceptions). A cash settlement outside those exceptions forfeits the input VAT credit on that purchase, as covered in our advisory on the VAT non-cash payment rule of 5 million VND.
Exports qualify for a 0% rate, allowing full input VAT deduction and refund, while VAT-exempt supplies disallow input credits. For the latest rule changes, see our overview of Vietnam’s new VAT law.
1.4. Personal Income Tax (PIT)
Employers must withhold and remit PIT on employee compensation before salary is paid, and under-withholding remains the employer’s liability. Law 109/2025/QH15 (effective July 1, 2026, applicable across the full 2026 tax year) cuts the progressive tariff from seven brackets to five:
| Bracket | Monthly taxable income | Marginal tax rate | Annual taxable income |
|---|---|---|---|
| 1 | Up to VND 10 million | 5% | Up to VND 120 million |
| 2 | Over VND 10 million to 30 million | 10% | Over VND 120 million to 360 million |
| 3 | Over VND 30 million to 60 million | 20% | Over VND 360 million to 720 million |
| 4 | Over VND 60 million to 100 million | 30% | Over VND 720 million to 1,200 million |
| 5 | Above VND 100 million | 35% | Above VND 1,200 million |
Resolution 110/2025/UBTVQH15 raises personal relief to VND 15.5 million per month (VND 186 million annually) and dependent relief to VND 6.2 million per month (VND 74.4 million annually). The former 15% and 25% brackets collapse into 10% and 20%.
For expatriates, tax residency (183 days or more in Vietnam in a calendar year or 12 consecutive months) means worldwide income taxed at progressive rates; non-residents pay a flat 20% on Vietnam-sourced employment earnings. Filing steps are in our guide to expatriate PIT finalization.
1.5. Import and Export Customs Duty
Cross-border traders and contract manufacturers face customs tariffs under Decree 26/2023/ND-CP. Rates run from 0% (raw manufacturing materials) to 150% (luxury consumer items), classified by Harmonized System (HS) code. Export Processing Enterprises (EPEs) in industrial or export processing zones operate under a specialized EPE VAT regime, with import tariff exemptions and zero VAT on raw materials imported to make export goods.
FTAs (CPTPP, EVFTA, RCEP) cut duty by 50% to 100% against standard MFN tariffs, provided you hold valid Certificates of Origin and meet the Rules of Origin.
2. Cross-Border Taxation and International Transactions
2.1. Foreign Contractor Tax (FCT)
Payments to offshore entities without a permanent establishment in Vietnam require withholding Foreign Contractor Tax. The framework sits in Circular 69/2025/TT-BTC (VAT) and Circular 20/2026/TT-BTC (CIT); Circular 89/2026/TT-BTC repeals legacy Circular 103/2014/TT-BTC from July 1, 2026. The domestic entity registers a foreign contractor tax code, withholds the tax, and remits it to the state budget.
Deemed withholding rates under the direct method:
| Commercial contract classification | Deemed VAT rate | Deemed CIT rate | Combined rate (sum of both) |
|---|---|---|---|
| General technical and commercial services | 5% | 5% | 10% |
| Supply of goods with bundled in-country services | 3% | 2% | 5% |
| Supply of machinery/equipment delivered in Vietnam | 1% | 1% | 2% |
| Royalties and intellectual property (software licensing) | Not subject to VAT (conditional) | 10% | 10% |
| Offshore commercial loan interest | Not subject to VAT | 5% | 5% |
| Construction and installation without materials supply | 5% | 2% | 7% |
Software licensing is outside VAT when the conditions in Article 5 of the VAT Law are met.
2.2. Global Minimum Tax (GMT)
Vietnam applies the OECD Pillar Two rules through Resolution 107/2023/QH15 and Decree 236/2025/ND-CP (effective October 15, 2025, applicable from FY2024). A 15% effective tax floor applies to groups with consolidated revenue of €750 million or more in at least two of the four preceding years. Subsidiaries on holiday rates (such as 5% or 10%) pay a domestic top-up tax, and the QDMTT return is due within 12 months after fiscal year-end. The group-level GloBE Information Return follows 15 months after fiscal year-end, or 18 months for the first year in scope. Modeling and filing steps are in our guide to global minimum tax implementation in Vietnam.
2.3. Outbound Profit Repatriation
Foreign investors may remit dividends and after-tax profits abroad through foreign investment capital accounts (formerly DICA) under Law 143/2025/QH15, SBV Circular 38/2026/TT-NHNN, and Decree 252/2026/ND-CP (Article 27). The prerequisites are:
- The annual financial statements are audited, the corporate tax return is filed, and state tax liabilities are cleared with documentation.
- No accumulated loss: Decree 252 bars remitting the profit of a year in which the statements still show an accumulated loss after CIT loss carry-forward.
- Where the bank or the company needs proof, a tax-obligation confirmation (Form 01/ĐNXN, Circular 89) can be requested before remittance. Under Decree 252, profits are remitted annually after the financial year ends, so interim remittance during the year should not be planned.
3. Tax Incentives and Entitlements
3.1. Corporate Income Tax Incentives
Qualifying projects can secure the packages below, detailed in our tax incentives CIT strategy guide:
- Preferential rates: 10% for 15 years (the Prime Minister may extend it by up to 15 more years for certain major projects) or 17% for 10 years, against the standard 20%.
- Exemption holidays: the 10% group gets up to 4 years of 100% exemption from the first profitable year (or the fourth year of revenue if no taxable income arises in the first three), then a 50% reduction for up to 9 more years. The 17% group gets up to 2 years of exemption and a 50% reduction for up to 4 years (Article 14 of the CIT Law).
- High-technology incentives from 1 July 2026: strategic technology enterprises, group 1 high-technology enterprises, and related R&D centers pay 10% for 25 years (Law 133/2025/QH15).
Eligibility is self-assessed in the annual CIT finalization return, with separate ledgers for incentive-eligible and other turnover; without them the tax authority may reallocate costs and revoke the incentive. R&D spending can be added to deductible costs up to a total of 200% of actual spending, provided the addition does not put the enterprise into a loss (Decree 320).
3.2. Three-Year CIT Exemption for Newly Established Enterprises
Under Resolution 198/2025/QH15 and its implementing decrees, newly established small and medium enterprises registering for the first time under an Enterprise Registration Certificate (ERC) receive a consecutive 3-year full CIT exemption from the 2025 tax period. It runs for 3 consecutive tax years from the year the initial ERC was issued, whether or not revenue or profit was recorded. Entities formed through mergers, acquisitions, consolidations, spin-offs, demergers, or ownership restructuring are ineligible. The exemption works independently of geographic incentives; eligible companies elect the most advantageous regime without stacking.
3.3. Value-Added Tax Refunds
VAT refunds run through two channels:
- Export VAT refund: enterprises with uncredited input VAT of VND 300 million or more (after domestic offsetting) can claim a refund, capped at 10% of export revenue in the period. See VAT refunds for FDI.
- Investment project VAT refund: pre-revenue entities holding an Investment Registration Certificate (IRC) can claim cumulative input VAT on factory construction, machinery, and equipment above VND 300 million. See investment project VAT refunds.
Joint customs-tax audits verify supplier e-invoices upstream, and supplier risk flags can extend the pre-refund check. For hands-on support, see our tax refund service.
4. Compliance Operations and Obligations
4.1. Filing Calendar and Deadlines
The unified calendar under Decree 252/2026/ND-CP (guiding Law 108/2025/QH15) is below; the full lifecycle is in our guide to tax administration and compliance for FDI.
| Obligation | Filing and payment deadline | Frequency |
|---|---|---|
| Monthly VAT return | 20th day of the following month | Monthly |
| Quarterly VAT return | Last day of the month following the quarter | Quarterly |
| Quarterly provisional CIT | Last day of the month following the quarter | Quarterly |
| Annual CIT finalization return | Last day of the 3rd month after fiscal year-end (March 31) | Annual |
| Annual PIT finalization return | Employers: last day of the 3rd month after year-end (March 31); individuals self-filing: last day of the 4th month (April 30), per Article 10 of Decree 252 | Annual |
| Audited financial statements | Within 90 days from the close of the fiscal year (March 31) | Annual |
For quarterly provisional CIT, total payments across four quarters must reach at least 80% of the final annual liability. On any shortfall below that level, interest of 0.03% per day runs from the day after the Q4 deadline. The Vietnam tax compliance calendar lays out every filing and payment deadline month by month, with the 2026–2027 weekend shifts; HR and social insurance dates sit in the separate annual compliance calendar.
4.2. Electronic Invoicing
Enterprises issue and validate electronic invoices through tax-connected providers under Decree 254/2026/ND-CP and Circular 91/2026/TT-BTC (both effective July 1, 2026, superseding Decree 123/2020/ND-CP and Decree 70/2025/ND-CP). Tax-authority-printed paper invoices lost validity on July 1, 2026. Registration, error correction, late-issuance penalties and the buyer’s deduction rights on late invoices are covered in the dedicated e-invoice guide.
4.3. Statutory Audit and Chief Accountant Appointment
Under Law on Independent Audit No. 67/2011/QH12, 100% of foreign-invested enterprises must have an annual financial statement audit by an accredited independent auditing firm. Audited reports are submitted within 90 days of fiscal year-end to the Tax Department, the statistics authority under the Ministry of Finance, and competent provincial authorities overseeing finance and investment.
Under Decree 150/2025/ND-CP there is no separate Department of Planning and Investment: investment, accounting and independent audit functions sit with the Department of Finance. Enterprises outside industrial zones should confirm with it where to file; those inside industrial zones typically file with the Industrial Zone Management Board.
Every enterprise must appoint a chief accountant or hire a chief accountant service under Decree 174/2016/ND-CP. While none is in place, a person in charge of accounting may be designated for up to 12 months. Setup steps are in our guide to accounting setup and compliance in Vietnam, and our chief accountant service supports the appointment.
4.4. Transfer Pricing and Related-Party Rules
Related-party transactions are governed by Decree 255/2026/ND-CP (effective July 1, 2026, superseding Decree 132/2020/ND-CP and Decree 20/2025/ND-CP). Tax periods up to and including 2025 stay under Decree 132 as amended; Decree 255 applies from the 2026 tax period. Enterprises declare Appendix I with the annual CIT return, and those not exempt from documentation also prepare the Local File, Master File and related appendices. Deductible net interest expense is capped at 30% of adjusted EBITDA, with disallowed interest carried forward for up to 5 tax years. Documentation thresholds, exemptions and the interest cap rules are in our guide to related-party transactions.
5. Accounting Standards and Financial Reporting
5.1. Vietnamese Accounting Standards and Corporate Accounting Regime
26 VAS standards govern financial measurement. Circular 99/2025/TT-BTC (effective January 1, 2026) modernizes the enterprise accounting regime and supersedes Circular 200/2014/TT-BTC, as analyzed in our Circular 99/2025 detailed comparison. Core updates:
- Chart of accounts: new Account 215 (Biological Assets), Account 2295 (Provision for Biological Asset Losses), and Account 82112 (GloBE Top-up Tax).
- Vouchers and disclosure: digital accounting templates that connect to e-invoicing and ERP systems, and restructured financial notes covering provisions and related-party balances.
- SMEs: small and medium entities may keep applying Circular 133/2016/TT-BTC.
FDI subsidiaries must finish ERP chart-of-accounts updates and train local accountants on opening-balance conversion (Article 29 of Circular 99/2025/TT-BTC).
5.2. IFRS Convergence for Multinational Subsidiaries
Subsidiaries reporting to a parent under International Financial Reporting Standards (IFRS) manage three main divergences. VAS has not adopted the five-step revenue model of IFRS 15 or the lease model of IFRS 16, so revenue timing and lease liabilities differ. VAS also relies on historical cost, while IFRS requires fair value for investment properties and derivatives. Most subsidiaries run parallel ERP accounts to reconcile statutory VAS with the parent’s IFRS package.
6. Inspection Risks and Penalty Framework
Tax authorities cross-match e-invoices, customs declarations, and banking transactions with Big Data analytics and raise automated risk flags.
6.1. Audit Triggers
Three indicators most often start an inspection:
- Consecutive losses alongside high related-party volumes: persistent operating losses while turnover with foreign affiliates grows draw transfer pricing scrutiny.
- Preferential CIT claims without segregated bookkeeping: claiming incentive rates without separate ledgers invites reassessment and incentive revocation.
- VAT refund claims with upstream invoice irregularities: refund files backed by invoices from high-risk vendors prompt joint tax-customs checks.
An audit opened for one tax often widens: an export VAT refund query that exposes supplier flaws can extend to CIT, PIT withholding, and FCT remittances.
6.2. Administrative Penalties and Late Payment Interest
Penalties follow the Tax Administration Law and Decree 125/2020/ND-CP. The full tiered scale and enforcement measures are in our tax administration and compliance guide.
| Violation category | Sanction | Reference |
|---|---|---|
| Late submission of tax returns | Fines of VND 2 million to VND 25 million for organizations (individuals pay half). A return filed more than 90 days late with tax due is treated as tax evasion unless the tax and late-payment interest are paid before an inspection or audit decision is announced or a violation record is made | Decree 125/2020/ND-CP, Article 13 |
| Unintentional under-declaration | 20% of underpaid tax plus late payment interest | Tax Administration Law |
| Tax evasion and fraudulent filing | Fines of 1 to 3 times the evaded tax | Tax Administration Law |
| Late payment of tax | Interest of 0.03% per day (about 10.95% a year, simple interest) with no statutory cap | Tax Administration Law |
The uncapped interest is the heaviest exposure in multi-year audit cycles. A voluntary supplementary return filed before an audit is announced removes the 20% penalty, leaving only the tax principal and accrued interest.
Indochina Link Vietnam provides corporate tax compliance services for foreign-invested enterprises, including monthly tax filings, annual finalization, transfer pricing documentation, and tax audit defense. Contact our advisory team to arrange a consultation →
This advisory publication reflects Vietnamese tax regulations updated through October 2026. Fiscal laws and enforcement practices evolve continuously; enterprises should obtain qualified professional advice tailored to their specific operational circumstances.
