Taxation

The main categories of tax imposed in Vietnam are below. All taxes are imposed at the national level. There are no state or provincial taxes. (Source: Doing Business in Vietnam, PwC 2017)

Corporate Income Tax (CIT): Enterprises are subject to a CIT rate of 20 per cent. Companies operating in the Oil and Gas industry are subject to CIT rate ranging from 32 per cent to 50 per cent. Companies engaging in prospecting, exploration and exploitation of mineral resources are subject to CIT rates of 40 per cent or 50 per cent.

Transfer Pricing (TP): Vietnam’s transfer pricing (TP) regulations are governed by Decree 20/2017/ND-CP which came into force on 1 May 2017.

Foreign Contractor Withholding Tax (FCT): FCT is levied on payments to foreign organizations and individuals undertaking businesses or earning income sourced from Vietnam.

Capital Assignment Profits Tax (CAPT): Gains derived from the sale of shares in a Vietnam company are, in many cases, subject to 20 per cent CIT. This is referred to as Capital Assignment Profit Tax (CAPT), although it is not a separate tax as such.

Value Added Tax (VAT): VAT applies to goods and services used for production, trading and consumption in Vietnam (including goods and services purchased from non-residents).

Special Sales Tax (SST): SST is a form of excise tax that applies to the production or import of certain goods and the provision of certain services.

Natural Resources Tax (NRT): Natural resource tax is payable by industries exploiting Vietnam’s natural resources including petroleum, minerals, natural gas, forest products, natural seafood, natural bird’s nests, and natural water.

Property Tax: Foreign investors generally pay rental fees for land use rights. The range of rates is wide depending upon the location, infrastructure and the industrial sector in which the business is operating.

Environment Protection Tax: Environment protection Tax is applicable to the production and importation of certain goods deemed detrimental to the environment, the most significant of which are petroleum and coal.

Import and Export Duties: Import duty rates are classified into 3 categories: ordinary rates, preferential rates, and special preferential rates.

Personal Income Tax (PIT): Tax residents are subject to Vietnamese PIT on their worldwide taxable income. Employment income is taxed on a progressive tax rates basis. Other income is taxed at a variety of different rates.

Social, Health and Unemployment Insurance Contributions: Social insurance (SI_ and unemployment insurance (UI) contributions are applicable to Vietnamese individuals only. Health insurance (HI) contributions are required to Vietnamese and foreign individuals that are employed under Vietnam labour contracts.

Other Taxes: Several others such as license tax, registration fees etc.

Accounting and Reporting

Enterprises with foreign-owned capital, foreign parties to business co-operation contracts, and foreign contractors having a resident base in Vietnam are required to adopt the Vietnamese Accounting Standards and its guidance.