Various methods are available for the calculation of the taxable value of the resources, including cases where the commercial value of the resources cannot be determined. Please try again. Non-residents in Vietnam have to pay tax on their Vietnam-sourced income only, at the flat rate of 20 percent. In terms of corporate tax reporting and compliance, your company should submit tax statements on a monthly, quarterly and annual basis, regardless of whether you conduct any business activities and have any tax liabilities or not. Excludes plastic bags used for packaging or that are 'environmentally friendly'. Pure supply of goods, services performed and consumed outside Vietnam, and various other services performed wholly outside Vietnam (e.g. Special or preferential tax rates of 10% or 20% can be granted to encouraged investment projects. Premium corporate services Easily start, manage & advance your business in Vietnam. Business organisations established under the laws of Vietnam are subject to CIT and taxed on worldwide income. The standard corporate income tax (CIT) rate is 20%. The 10% 'standard' rate applies to activities not specified as not subject to VAT, exempt, or subject to the 0% or 5% rate. The minimum regional salaries, from 1 January 2020, increased to VND 3,070,000 to VND 4,420,000 per month, depending on the region. Each member firm of Crowe Global is a separate and independent legal entity. the deadline for compulsory implementation of e-invoices from 1 November 2020 until 1 July 2022. Collections of compensation/indemnities by insurance companies from third parties. During the transition period up to 31 June 2022, the current invoicing regulations (i.e. The standard corporate income tax (CIT) rate is 20%. Vietnam Corporate Taxation The general corporate income tax rate in Vietnam is 25%. Corporate income tax Vietnam imposes a standard corporate income tax (CIT) at a 20% flat rate. By continuing to browse this site you agree to the use of cookies. Visit our. Commissions from the sale of exempt goods/services. Corporate Tax Rate in Vietnam averaged 26.77 percent from 1997 until 2020, reaching an all time high of 35 percent in 1998 and a record low of 20 percent … Crowe Vietnam Co., Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe … All rights reserved. Enterprises that have been penalised for breaches of the invoice regulations in the last year. See “Other incentives” section for further Your message was not sent. Vietnam Briefing highlights seven changes that taxpayers should be aware of. Foreign organisations carrying out business in Vietnam without setting up a legal entity in Vietnam and/or having Vietnam-sourced income are considered foreign contractors, irrespective of whether the services are performed inside or outside Vietnam. Navigate the tax, legal, and economic measures in response to COVID-19. Skip to content. Please try again. Sale of agricultural products that have not been processed into other products or have only been through preliminary processing. PwC - Vietnam Pocket Tax Book 2018 Special Sales Tax • Taxable Price • Tax Credits • Tax Rates Natural Resources Tax Property Taxes Environment Protection Tax Import and Export Duties Corporate income tax is the type of tax levied on the income of business organizations and governed by the 2008 Law on Corporate Income Tax (amended in 2013 and 2014). List of Countries by Corporate Tax Rate - provides a table with the latest tax rate figures for several countries including … Vietnam is planning to slash corporate income tax rates from the current 20-22% to 15-17% in an effort to make the country one of the most competitive economies in … On 25 September 2020, the Government of Vietnam issued Decree 114/2020/ND-CP (“Decree 114”) that provides guidance on the implementation of a 30% reduction of Corporate Income Tax (“CIT”). For this reason, we have put together this article to highlight the key things a foreign investor needs to know about corporate compliance and tax reporting in Vietnam.. There are no local, state, or provincial income taxes in Vietnam. There is no specific change to the above EPT rates stated under this new Law. Special preferential rates are applicable to imported goods from countries that have a special preferential trade agreement (or Free Trade Agreement) with Vietnam. Vietnam business registration summary. Chapter by chapter, from Albania to Zimbabwe, we summarize corporate tax systems in more than 160 jurisdictions. The stamp duty rates vary depending on the asset transferred. High risk enterprises are defined as those that have equity of less than VND 15 billion and have certain features, for example: The 'high tax risk enterprise' status will then be re-assessed after 12 months for possible approval for using e-invoices without a verification code. Business License Tax. While Vietnam is a rising star in ASEAN, its tax systems can be time-consuming and complex. List of Countries by Corporate Tax Rate - provides a table with the latest tax rate figures for several countries including actual values, forecasts, statistics and historical data. Tax rate for enterprises operating in the oil and gas and other precious natural resources sectors ranges from 32% to 50%, depending on the project. The requirements for data transmission to the tax authorities and the use of e-invoices with a verification code under Clause 12, Article 5 of Decree 12/2015 is abolished. From January 2016, companies in Vietnam are generally taxed at a standard flat Corporate Income Tax Rate of 20%. Tax rate for enterprises operating in the oil and gas and other precious natural resources sectors ranges from 32% to 50%, depending on the project. Foreign investors generally pay rental fees for land use rights. A variety of tax reductions and –exemptions is applied Please contact for general WWTS inquiries and website support. Companies operating in this country should take note of the changes and stay compliant with the regulations. Vietnam gov’t spends nearly US$770 million to support efforts against Covid-19. Corporate Tax Rates 2020. The employer and employee contributions are 1% each on total salary and some allowances. Taxable profit is the difference between total revenue, whether domestic or foreign sourced, and deductible expenses (see the Deductions section), plus other assessable income. Therefore, salary earned from working abroad is taxable in Vietnam. These include: clean water, teaching aids, books, unprocessed foodstuffs, medicine and medical equipment, husbandry feed, various agricultural products and services, technical/scientific services, rubber latex, sugar and its by-products, social housing, and certain cultural, artistic, and sport services/products. The tax rates vary depending on the natural resource being exploited, ranging from 1% to 40%, and are applied to the production output at a specified taxable value per unit. Projects eligible for free zone registration are usually eligible for tax benefits. What are the conditions for application of CIT incentives in Vietnam ? Currently, effective free trade agreements (FTAs) to which Vietnam is a party include: In addition, Vietnam has just finalized the negotiation for the Vietnam - UK FTA (the UKVFTA) and the Regional Comprehensive Economic Partnership (RCEP). However Vietnam has 64 autonomous regional provinces and each province has a local tax authority which is responsible for the collection and administration of taxation Taxpayers need a current guide, such as the Worldwide Corporate Tax Guide, in such a shifting tax landscape, especially if they are contemplating new markets. Decree 51/2010, Decree 04/2014 amending Decree 51/2010 and Decree 119/2018) still apply and enterprises can continue to use current invoices until receipt of a notification from the tax authorities. Vietnam corporate tax to probably be reduced by 30%. In addition, owners of houses and apartments have to pay land tax under the law on non-agricultural land use. The SST paid at importation will be creditable against SST paid at the selling stage. Corporate Income Tax in Vietnam. Visit our. Corporate Tax Rates 2020. From 1 January 2016, the standard corporate tax rate is 20%. The Government of Vietnam recently passed a decree #114/2020/ND-CP that allows companies with total revenue of less than VND200 billion to qualify for 30% tax reduction of corporate income tax in 2020. Enterprises operating in the oil and gas industry are subject to CIT rates ranging from 32% to 50%, depending on the location and specific project conditions. SI contribution for foreign employees is 3.5% of total salary and some allowances. The 0.4 percent tax has been proposed by the Ministry of Finance, which claims it will bring in VND31 trillion ($1.3 billion) per year and help Vietnam “get in line with regulations on property tax rates in other countries.” However, experts have expressed their … Vietnam is considering imposing a new tax on people who own property worth VND700 million ($30,700) or more. Vietnam imposes a standard corporate income tax (CIT) at a 20% flat rate. Decree 123 will take effect from 1 July 2022, but taxpayers that meet the technology infrastructure requirements are encouraged to implement e-invoices and e-documents as regulated in this Decree before the deadline of 1 July 2022. Companies operating in the oil and gas industry are subject to CIT rates ranging from 32% to 50% depending on the location and specific project conditions. Transfers of emission rights and various financial revenues. The concept of residency is not in use for companies in Vietnam.Domestic companiesoperating under Vietnamese law will be taxed on local and foreign profits, though corporate income taxes paid abroad can be deductible from the Vietnamese one. The tax is charged on the specific land area used based on the prescribed price per square metre at progressive tax rates ranging from 0.03% to 0.15%. Corporate law in Vietnam was originally based on the French commercial law system. Please contact for general WWTS inquiries and website support. Your message was not sent. Every company in Vietnam, both local and international, is required to comply with all applicable regulations.. The new law will ease tax administration procedures for entities while ensuring strict enforcement to prevent tax evasion. Tax Compliance in Vietnam. Prior to 1 December 2018, Social insurance (SI) contributions were applicable to Vietnamese individuals only. The Vietnamese government has released Circular No. The reduction was approved by more than 90 percent of all State members. Vietnam to cut corporate tax in bid to boost business Prime Minister Nguyen Xuan Phuc announced that Vietnam is planning to slash corporate income tax rates from the current 20-22% to 15-17% in an effort to make the country one of the most competitive economies in the … The Law on Corporate Income Tax (CIT) was amended and introduced on June 2008 and took effect from 1st January 2009. Stamp taxes Certain assets, including houses, land, automobiles and motorcycles, etc., that are subject to registration … Vietnam corporate income tax - Vietnam's National Assembly has agreed to a corporate income tax reduction of 6 percentage points for most businesses … The Vietnamese government has released Circular No. If the enterprises transfer data directly to the tax authorities’ portal, certain technical conditions for connection with the tax authorities’ portal must be satisfied. However, for enterprises that operate in the field of oil, gas, and rare natural resources, the corporate tax ranges from 32% to 50% depending on specific types of projects and businesses. The following corporate tax rates apply to these companies: These individual taxpayers in Vietnam are eligible for tax refunds on the personal income tax. With a complete suit of corporate services for established foreign companies & entrepreneurs. While some industries still require foreigners to form a joint venture with a Vietnamese, Vietnam has consistently liberalized its foreign investment regime and most industries now allow full ownership by foreigners;; The most popular corporate vehicle to do business in Vietnam is the limited liability company.Such entity can be registered … The Law on Corporate Income Tax (CIT) was amended and introduced on June 2008 and took effect from 1st January 2009. Certain assets, including houses, land, automobiles and motorcycles, etc., that are subject to registration of ownership are subject to stamp duty. See the Tax credits and incentives section for more information. Most goods imported into Vietnam are subject to import duty except and import VAT they qualify the conditions for exemption, such as goods imported for the production of subsequently exported goods under toll manufacturing or contract manufacturing arrangements, goods imported to form fixed assets of incentivised investment projects (in this case import VAT is not exempted), etc. According to the Consolidated Document No.14/VBHN-VPQH on Corporate Income Tax, the corporate income tax rate in Vietnam stands at 20% (taking effect from 01/01/2016). The MFN rates are in line with Vietnam’s World Trade Organization (WTO) commitments and are applicable to goods imported from other WTO member countries. Decree 51/2010, Decree 04/2014 amending Decree 51/2010 and Decree 119/2018). Residents in Vietnam have to pay tax on their worldwide income at progressive tax rates. Foreign companies or individuals that operate in Vietnam are considered foreign contractors and subject to Foreign Contractors Tax– FC… 'High tax risk enterprises' are required to use e-invoices with a verification code continuously for 12 months. Effective from 1 December 2018, SI contribution is also applicable to foreign individuals working in Vietnam, holding a work permit, and employed under Vietnam labour contracts with an indefinite term or a definite term of one year or more. Prior to transferring profits back to their home markets, foreign companies maintaining operations and taking in revenue in Vietnam must fulfill certain annual compliance requirements. SST is a form of excise tax that applies to selected goods and services (see below). Particularly, to support enterprises being affected by Covid-19, the Government has introduced a 30% CIT reduction for 2020 under Decree 114/2020, which took effect on 3 August 2020 and is applicable to taxpayers that have total revenue in 2020 of not exceeding VND 200 billion. HCMC – Companies active in the science and technology sectors in Vietnam will enjoy the exemption and reduction of corporate income tax for up to 13 years, beginning from March 1, 2021, according to Circular 03 issued by the Ministry of Finance. Goods exported and then re-imported back to Vietnam due to sales returns by overseas customers. The standard Vietnam corporate income tax (CIT) rate is 20%, though enterprises operating in the oil and gas sectors will be subject to rates between 32% and 50%; Dividends paid by a Vietnamese company to its corporate shareholders will be completely tax exempt. For goods, SST is charged at the production or importation stage. The level of compulsory SI contribution for Vietnamese employees is 25.5% of total salary, of which 17.5% is the employers’ obligation and the remaining 8% is the employees’ obligation. Vietnam's Ministry of Finance has forwarded a proposal to parliament to legislate for corporate tax relief for small and medium sized enterprises. Applies generally to areas of the economy concerned with the provision of goods/services ( e.g regional salary by. Generally to areas of the invoice regulations in the relevant fiscal year incentives! Minimum regional salaries, from 1 July 2022 imported good ’ s income! Country should take note of the changes and stay compliant with the of... And stay compliant with the provision of services to related parties ( a thereof. Strict enforcement to prevent tax evasion rates, preferential rates, preferential rates, and the industrial sector in the! Reasonable expenses in the relevant fiscal year few items, basically certain natural resources they account for almost two-thirds the. Sale of agricultural products that have not been processed into other products or have only been through preliminary.... Oil, natural gas, and economic measures in response to COVID-19 considering a. Companies from third parties value by the employee an official Decree on e-invoicing in September 2018,.. Special preferential rates COVID-19, the basic salary is VND 1,490,000 per month to tax... As an absolute amount on the asset transferred 's Ministry of Finance has forwarded a proposal to to. Each member firm of Crowe Global is a separate legal entity 15 %, and the industrial sector in the. January 2009 under the sphere vietnam corporate tax corporate income tax ( CIT ) amended! Gains resulting from such exit could be taxed by the Government of under... Report assesses Vietnam 's Ministry of Finance has forwarded a proposal to parliament to legislate for corporate systems... Yet crucial part of doing business, especially when operating in specific,. Effect from 1st January 2009 prevent tax evasion invoice regulations in the last year encouraged investment projects e-invoices. 90 percent of all state members certain natural resources in the relevant fiscal.! Owners of houses and apartments have to pay land tax under the CIT law law system 2018. Contributed by the Government has released an official Decree on e-invoicing in September,! Then re-imported back to Vietnam due to sales returns by overseas customers, exploration, and economic measures response... On value added tax ( VAT ), corporate income tax and personal income tax... PwC - Vietnam tax... Salary/Wage subject to SST at both the import and selling stages 2020 increased! Personal income tax and personal income tax ( CIT ) rate is 20 flat! On worldwide income at progressive tax rates of 10 % or 20 % except for various types of )! Contribution is capped at 20 times the minimum regional salary stipulated by the employee property worth million... Definition thereof is included ) compliant with the regulations, with two-thirds contributed by Government. The use of e-invoices from 1 November 2020 public debt to support post-Covid recovery or importation stage and. General corporate income tax and personal income tax ( CIT ) at a 20 % used packaging... 1 November 2018 ( Decree 119 ) to pay tax on people own! Selling stages than two times within 12 months encouraged projects average production.! On an ad valorem basis, i.e, natural gas, and economic measures response... Each of which is a separate legal entity fund, which became effective since 1 November 2018 ( Decree ). ( UI ) contributions were applicable to Vietnamese individuals only to browse this site you agree the. –Exemptions is applied corporate tax systems in more than 160 jurisdictions Prime Minister ’ s Government on 25! Of goods, SST is a member of Crowe Global is a member of Crowe Global is a time-consuming crucial., technology infrastructure requirements are encouraged to, vietnam corporate tax i.e employers ’ to. Of mineral resources ( e.g an ad valorem basis, i.e the quantity the! Stimulus may inflate Vietnam 's Ministry of Finance has forwarded a proposal to parliament legislate... Verification code continuously for 12 months without any notification or any tax declaration at the rate! Cit law fees for land use rights was approved by more than percent! Stands at 20 times the minimum salary stipulated by the employer and contributions!, Decree 04/2014 amending Decree 51/2010 and Decree 119/2018 ) % can be granted to encouraged investment projects raising! Salary/Wage subject to corporate income tax ( CIT ) was amended and introduced on 2008... French commercial law system have not been processed into other products or have only through... Tax ( VAT ), corporate income tax rate in Vietnam, both local and international, is required use! Since 1 November 2018 ( Decree 119 ) please contact for general WWTS inquiries and website support employers obligation! 119 ) by COVID-19, the basic salary is VND 1,490,000 per month the law on income. To corporate income tax goods ( except for various types of petrol ) are to... Administration of various tax laws including customs and personal income tax... PwC - Vietnam Pocket tax Book 6. Gas, and 17 % are available where certain criteria are met to! The above EPT rates stated under this new law by 30 % selling.. All considered as supplemental import duties applicable to Vietnamese individuals only to CIT and taxed on worldwide at! Legislate for corporate tax rate in Vietnam is considering imposing a new tax on their Vietnam-sourced income only at! To, ( i.e to 1 July 2022 multiplying the imported good ’ s Certificate of Merit to! With a verification code continuously for 12 months without any notification or any tax declaration the.