Corporate Income Tax (CIT)

CIT is central to Vietnam’s tax system, with a standard rate of 20%. From October 2025, a new CIT law introduces preferential rates for small and medium enterprises, 15% for firms with annual revenue up to VND 3 billion and 17% for revenue between VND 3 billion and VND 50 billion.

Eligibility is based on total revenue from the previous CIT period, and the reduced rates do not apply to subsidiaries or affiliates that fail to meet qualifying conditions. The law also introduces new incentives promoting local entrepreneurship, though firms with foreign ownership may require additional guidance once implementing decrees are issued.

Value Added Tax (VAT)

VAT remains a major revenue source. The standard 10% rate is temporarily reduced to 8% until the end of 2026, except for regulated cases, to support post-pandemic recovery.

For new companies, quarterly VAT filing applies by default, easing administrative work in the start-up phase. Refunds are possible but limited to specific cases, such as export activities or pre-operational investments with significant input VAT.

Personal Income Tax (PIT)

Employers are responsible for withholding and remitting PIT on employees’ behalf. Resident taxpayers are subject to progressive rates from 5% to 35%, while non-residents pay a flat 20%. Employers must align PIT filings with their VAT schedules, monthly or quarterly, to maintain consistency across categories.

Foreign Contractor Tax (FCT)

FCT applies to foreign entities earning Vietnam-sourced income through contracts with local parties. Rates depend on the type of service or transaction. Regular payments require monthly declarations by the 20th of the following month, while one-off transactions must be declared within 10 days of payment.

Vietnam’s network of Double Tax Avoidance Agreements (DTA) helps reduce double taxation and may offer preferential rates for eligible income types, so businesses should assess treaty benefits at the contracting stage.

Business License Tax (BLT)

BLT is an annual levy on businesses, from VND 1 million to VND 3 million based on charter capital. New companies get a one-year exemption; afterward, payment is due by 30 January. Updates are needed only if registered capital changes.

Vietnam’s tax system has become more predictable and transparent, yet timing and documentation remain critical. Aligning financial planning with tax milestones helps new entrants stay compliant and establish a sustainable foothold in one of Asia’s most dynamic markets.

member firms

Horizon Group

Horizon Group

Global Law Office

MSA Asia

contacts

Tony Xuechun Shao

Wenyu Dream Zhou