Vietnam Taxation

All companies in Vietnam, both domestic and international, are required to comply with all applicable regulations when doing businesses in Vietnam, including regulations on accounting and tax reporting.

Companies need to register your financial invoices with tax office in Vietnam. Moreover, it is mandatory to obtain Red Invoice before they can sell products and services and conduct other commercial activities.

With regards to tax compliance, all companies are required to submit tax statements to tax offices in which they are registered. It does not matter whether these companies are active and conduct business activities or have any tax liabilities in Vietnam or not, tax statements must be submitted.

Vietnam Corporate Income Tax

To encourage and increase the number of foreign investment in Vietnam, the government has put in numerous efforts, which include decreasing the rate of corporate income tax. Between 2000-2018 alone, the corporate income tax had reduced significantly by 12%. Currently, the tax rate of 20% is applied. In accordance with the country’s tax law, the corporate income tax is payable on a quarterly basis for companies with turnover lower than VND 50bn, for larger companies, the CIT is payable monthly.

Vietnam Personal Income Tax

Meanwhile, individuals are required to pay for their taxes if they generate any income in Vietnam. Unlike corporate income tax, personal income tax rate varies depending on how much an individual earns every year.

Individuals residing and receiving money in Vietnam are taxed at progressive rates that range between 5% and 35%. That being said, employees in top positions such as directors and senior managers are subject to a personal income tax of 35%, whereas blue-collar workers are subject to a personal income tax of 5% to 10%.

 

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