Running a company in Vietnam means managing several tax obligations. The amount you pay depends on your company's income, business activities, and transactions.
Vietnam introduced major tax changes in 2025 and 2026, including new corporate income tax rates and updated filing requirements. These changes affect both newly registered businesses and companies already operating in the country.
In this article, we will walk you through the taxes that apply to your company, how they are calculated, and when you need to file and pay them.
Taxes Companies Pay in Vietnam
Foreign-owned companies face many of the same tax obligations as locally owned businesses. However, overseas transactions and ownership structures can affect which rates and reporting requirements apply.
The main taxes are:
| Tax | Applicable rates | Who it applies to |
|---|---|---|
| Corporate income tax (CIT) | 20% standard; 15% or 17% for qualifying smaller enterprises | Companies earning taxable profits |
| Value-added tax (VAT) | 10% standard; temporary 8% for qualifying supplies; 5% and 0% for specified supplies | Businesses selling taxable goods and services |
| Personal income tax (PIT) | 5%–35% for resident employees; generally 20% for non-residents | Employers withholding tax from salaries |
| Foreign contractor tax (FCT) | Varies by payment type and applicable VAT and CIT treatment | Certain payments to overseas contractors |
| Dividend withholding tax | 0% for corporate shareholders; generally 5% for individuals | Profit distributions |
| Business license tax | Abolished from January 1, 2026 | No longer payable |
Corporate Income Tax in Vietnam
Vietnam's Corporate Income Tax Law No. 67/2025/QH15 took effect on October 1, 2025, and applies from the 2025 tax year.
Companies established under Vietnamese law are subject to corporate income tax on their worldwide taxable income. Foreign companies can also have Vietnamese CIT obligations on income sourced from Vietnam, depending on their activities and tax presence.
Corporate Income Tax Rates
Vietnam's standard corporate income tax rate is 20%. However, the 2025 law introduced lower rates for qualifying companies based on their annual revenue.
| Previous-year revenue | Corporate income tax rate |
|---|---|
| Up to VND 3 billion | 15% |
| Over VND 3 billion to VND 50 billion | 17% |
| Over VND 50 billion | 20% |
The applicable rate is determined by the company's revenue in the preceding tax year. It is then applied to taxable profit, not total revenue.
For example, a company generating VND 30 billion in revenue does not pay 17% on its entire revenue. If it qualifies for the reduced rate, the 17% applies to its taxable profit after deductions and adjustments.
Can Foreign-Owned Companies Qualify for the Lower Rates?
Foreign ownership does not automatically prevent a Vietnamese company from applying the 15% or 17% corporate income tax rate.
However, restrictions apply to certain subsidiaries and related-party companies. If a Vietnamese company belongs to a group where the relevant related enterprise does not meet the eligibility conditions, the Vietnamese company may be subject to the standard 20% rate.
For example, a Vietnamese subsidiary generating VND 20 billion in annual revenue may not qualify for the 17% rate if its overseas parent exceeds the relevant revenue threshold.
Foreign investors should therefore assess the company's ownership structure alongside its local revenue before applying a reduced rate.
Example: Calculating Corporate Income Tax
Consider an independently owned Vietnamese company with VND 30 billion in revenue in the previous year and VND 2 billion in taxable profit this year.
Assuming it meets the eligibility conditions, the company qualifies for the 17% rate.
| Calculation | Amount |
|---|---|
| Taxable profit | VND 2,000,000,000 |
| Applicable CIT rate | 17% |
| Corporate income tax payable | VND 340,000,000 |
| CIT at the standard 20% rate | VND 400,000,000 |
| Difference | VND 60,000,000 |
The company pays VND 340 million in corporate income tax, compared with VND 400 million at the standard rate.
Calculating Taxable Income
Taxable income is calculated by deducting allowable business expenses from revenue and making the other adjustments required by law.
Common deductible expenses include employee salaries, office rent, professional services, and operating costs. However, companies must maintain valid invoices and supporting documentation, and the expenses must satisfy the applicable deduction requirements.
Under Decree No. 320/2025/ND-CP, the non-cash payment threshold for deductible expenses was lowered to VND 5 million per transaction, effective December 15, 2025. Expenses meeting this threshold generally require qualifying non-cash payment evidence.
Companies with related-party transactions must also consider transfer pricing rules. These include restrictions on interest deductions, with an applicable 30% EBITDA limitation and statutory exceptions.
Tax losses can be carried forward for up to five consecutive years, subject to the relevant conditions. Accurate bookkeeping therefore affects both the company's current tax liability and its ability to use losses in future years.
Corporate Income Tax Incentives
Vietnam offers preferential corporate income tax treatment for qualifying investments in certain sectors and locations.
Eligible projects can receive a 10% preferential CIT rate for 15 years, together with tax exemptions and reductions. Qualifying activities include certain high-technology projects, software production, research and development, and encouraged manufacturing investments.
Location-based incentives can also apply to qualifying projects in high-tech parks, economic zones, and designated disadvantaged areas.
However, ordinary industrial parks no longer automatically qualify new projects for preferential CIT solely because of their location. The company must demonstrate that its specific investment qualifies under the applicable law.
Existing projects may also have transitional rights to incentives granted under earlier legislation. Those rights depend on the project's original approval and the applicable transitional provisions.
Three-Year Corporate Income Tax Exemption for SMEs
Under Resolution No. 198/2025/QH15 and Decree No. 20/2026/ND-CP, certain newly registered small and medium-sized enterprises can receive a three-year corporate income tax exemption.
The exemption runs for three consecutive years starting from the year in which the company receives its first Enterprise Registration Certificate (ERC). It does not begin when the company first becomes profitable.
To qualify, the business must meet Vietnam's SME definition. The broad statutory ceilings are an annual average of no more than 200 employees participating in social insurance, together with either total capital of up to VND 100 billion or prior-year revenue of up to VND 300 billion. Lower employee and revenue thresholds apply to certain sectors and enterprise-size categories.
The exemption also has specific exclusions.
For example, a newly registered company may be excluded if its legal representative, who is also a capital contributor, or its largest capital contributor held a qualifying leadership or ownership role in another operating company during the preceding 12 months. Other business restructuring circumstances can also prevent eligibility.
This restriction can affect foreign investors establishing a Vietnamese subsidiary through an existing business group. A newly issued ERC does not, by itself, establish eligibility for the exemption.
Global Minimum Tax for Multinational Companies
Vietnam applies the global minimum tax framework to qualifying multinational groups with consolidated annual revenue of at least EUR 750 million in at least two of the preceding four years.
The framework establishes a minimum effective tax rate of 15%, calculated under specific global minimum tax rules. A multinational group benefiting from Vietnamese investment incentives may therefore face an additional top-up tax.
The calculation includes adjustments and exclusions, so the top-up tax cannot be determined simply by subtracting the company's nominal CIT rate from 15%.
Companies belonging to large multinational groups should assess these rules before relying on preferential CIT rates in their investment projections.
Paying and Filing Corporate Income Tax
Vietnamese companies make provisional CIT payments throughout the year and submit an annual corporate income tax finalization.
There is no separate quarterly CIT return for the standard provisional-payment process. Companies estimate their taxable profits and pay the corresponding amounts each quarter.
Quarterly Corporate Income Tax Payments
Vietnam's Law on Tax Administration No. 108/2025/QH15 and Decree No. 252/2026/ND-CP took effect on July 1, 2026.
Article 24 of Decree 252/2026 provides that provisional CIT is payable by the last day of the first month of the following quarter. Before the new framework took effect, the deadline was the 30th of that month.
For a company using the calendar year, the applicable 2026 deadlines are:
| Quarter | Payment deadline |
|---|---|
| Q1: January–March | April 30, 2026 |
| Q2: April–June | July 31, 2026 |
| Q3: July–September | October 31, 2026 |
| Q4: October–December | January 31, 2027 |
The total provisional CIT paid across the four quarters must equal at least 80% of the company's final annual CIT liability.
If payments fall below this threshold, late-payment interest is calculated on the shortfall from the deadline for the fourth-quarter provisional payment.
Companies should monitor taxable profit throughout the year rather than wait until annual finalization to calculate their liability.
Annual Corporate Income Tax Finalization
The annual CIT return is due by the last day of the third month following the company's financial year-end.
For a company whose financial year ends on December 31, the deadline is March 31 of the following year.
Foreign-invested companies are also subject to annual financial reporting and audit requirements. Their audited financial statements must be prepared by a qualified independent auditor and submitted to the relevant authorities.
The audit should be planned alongside the CIT finalization because the financial statements provide the basis for reconciling the company's annual tax position.
Late payments attract interest at 0.03% per day on the overdue tax amount. Separate administrative penalties can apply to late or incorrect declarations.
Value-Added Tax (VAT) in Vietnam
Vietnam's VAT Law No. 48/2024/QH15 took effect on July 1, 2025.
The standard VAT rate is 10%, but Resolution No. 204/2025/QH15 introduced a temporary 8% rate for qualifying goods and services. The reduction currently runs until December 31, 2026.
VAT Rates in Vietnam
| VAT rate | Applicable supplies |
|---|---|
| 10% | Standard rate and supplies excluded from the temporary reduction |
| 8% | Qualifying goods and services temporarily reduced from 10% |
| 5% | Specified goods and services, including certain medical and agricultural supplies |
| 0% | Qualifying exports and other zero-rated supplies |
| Exempt | Supplies exempt under the VAT Law |
The temporary 8% rate excludes specified sectors such as telecommunications, banking, financial services, insurance, real estate, metal products, and certain mining products. Goods and services subject to special consumption tax are also excluded, subject to statutory exceptions.
The applicable rate depends on how the actual product or service is classified. Companies should verify that classification before applying the temporary reduction.
Unless the government extends the measure, qualifying supplies will return to the applicable standard rate after December 31, 2026.
How Companies Calculate VAT
Most foreign-invested companies use the VAT credit method.
Under this method, the company charges VAT on taxable sales and deducts eligible VAT paid on business purchases.
The calculation is:
VAT payable = Output VAT − Deductible Input VAT
For example, assume a company sells services for VND 100 million, excluding VAT, at the temporary 8% rate.
| Item | Amount |
|---|---|
| Sales before VAT | VND 100,000,000 |
| Output VAT at 8% | VND 8,000,000 |
| Eligible input VAT | VND 3,000,000 |
| Net VAT payable | VND 5,000,000 |
The company would pay VND 5 million in VAT after deducting its eligible input VAT.
To claim the deduction, it must hold compliant invoices and payment documentation. Purchases of VND 5 million or more generally require qualifying non-cash payment evidence.
Our Vietnam VAT calculator can help calculate VAT-inclusive and VAT-exclusive prices.
VAT on Imported Goods
Businesses importing machinery, raw materials, or finished products must also account for import VAT.
Import VAT is calculated using the applicable customs value and relevant import taxes. Companies using the VAT credit method can deduct eligible import VAT against output VAT, subject to the supporting documentation requirements.
Import duty is a separate cost. Our article on import taxes and customs duties in Vietnam explains how to calculate the landed cost of imported goods.
VAT Filing Deadlines
VAT returns are filed monthly or quarterly depending on the company's previous-year revenue and filing eligibility.
Companies with revenue exceeding VND 50 billion in the previous year normally file monthly. Companies at or below that threshold can qualify for quarterly filing, while newly established companies can generally begin with quarterly filing under the applicable rules.
Monthly VAT returns are due by the 20th of the following month. Quarterly returns are due by the last day of the first month following the quarter.
Companies must also maintain electronic invoices and accounting records that reconcile with their VAT declarations.
Foreign Contractor Tax in Vietnam
Foreign contractor tax applies to certain payments made to overseas companies that earn taxable income connected with Vietnam.
For example, a Vietnamese company may pay a foreign consultant, software provider, technology licensor, lender, or overseas parent company. The tax treatment depends on what the payment is for and how the transaction is structured.
Foreign contractor tax commonly consists of a VAT component and a CIT component calculated using prescribed percentages of taxable revenue.
Vietnam updated this framework in 2026. The relevant provisions now operate under the current CIT and VAT laws, their implementing regulations, and the new Law on Tax Administration rather than relying solely on the former Circular No. 103/2014/TT-BTC.
Foreign Contractor Tax Rates
Under the deemed method, common reference rates include:
| Payment type | VAT component | CIT component |
|---|---|---|
| Consulting, management, and general services | 5% | 5% |
| Equipment and machinery leasing | Generally 5% | Generally 5% |
| Loan interest | VAT-exempt | 5% |
| Qualifying intellectual property royalties | Depends on the transaction and applicable VAT exemption | Generally 10% |
These are reference rates. Software transactions, royalties, digital services, and contracts combining goods with services can have different tax treatments.
The temporary VAT reduction also provides relief for qualifying transactions calculated using a percentage-of-revenue method. However, companies should confirm its application to the specific foreign contractor payment rather than automatically reducing the VAT component shown above.
Payments to Overseas Parent Companies
Transactions within the same corporate group are not automatically exempt from foreign contractor tax.
For example, management fees or technical service charges paid by a Vietnamese subsidiary to its overseas parent may attract FCT. The contract should identify the services being supplied and separate amounts that have different tax treatments.
It should also specify whether the agreed payment is gross or net of Vietnamese withholding taxes. This determines whether the Vietnamese company must bear additional tax costs to deliver the agreed net amount overseas.
Filing and Tax Treaty Relief
Where the Vietnamese payer declares foreign contractor tax on each taxable occurrence, the general declaration deadline is the 10th day following the taxable event, subject to the applicable filing arrangements.
Vietnam's double taxation agreements can reduce or eliminate the CIT component for qualifying overseas contractors. The foreign company must meet the treaty conditions and provide the required documentation, including tax residency evidence.
Treaty relief from CIT does not automatically remove any applicable Vietnamese VAT obligation.
Dividend Withholding Tax and Profit Remittance
Vietnam does not impose dividend withholding tax on profit distributions to corporate shareholders. A foreign corporate parent can therefore receive qualifying after-tax profits without an additional Vietnamese dividend withholding tax.
Distributions to individual shareholders are generally subject to 5% personal income tax.
When Can a Company Send Profits Overseas?
Foreign investors can remit eligible after-tax profits once the company has completed its applicable annual accounts and tax obligations.
The company must also consider accumulated losses and other restrictions on profit distributions. Before remitting profits, the investor or authorized Vietnamese company must notify the relevant tax authority at least seven working days in advance.
Eligible foreign-invested companies use the appropriate Direct Investment Capital Account for qualifying investment-related transfers.
The bank may request evidence of the distribution decision, completed tax filings, and supporting documents before processing the transfer.
Personal Income Tax for Employees in Vietnam
Employers must calculate and withhold personal income tax from taxable employee salaries.
The applicable rate depends on the employee's tax residency. Vietnamese tax residents are taxed using a progressive schedule, while non-residents are generally subject to a flat rate on qualifying Vietnam-sourced employment income.
Vietnam introduced new PIT rules for the 2026 tax year, including higher family deductions and a simplified five-bracket schedule.
Personal Income Tax Rates
For resident employees, the progressive rates apply to taxable income after eligible deductions.
| Monthly taxable income (VND) | Tax rate |
|---|---|
| Up to 10 million | 5% |
| Over 10 million to 30 million | 10% |
| Over 30 million to 60 million | 20% |
| Over 60 million to 100 million | 30% |
| Over 100 million | 35% |
These rates are progressive. Employees pay the higher percentage only on the portion of their income that falls within the corresponding bracket.
Personal Income Tax Deductions
From the 2026 tax year, resident employees can claim a personal deduction of VND 15.5 million per month and a deduction of VND 6.2 million for each registered dependent.
Compulsory insurance contributions and other qualifying deductions can also reduce taxable income.
Non-resident employees generally pay a flat 20% tax on Vietnam-sourced employment income without the same family deductions.
For companies hiring local staff, PIT withholding is part of a broader set of obligations that includes payroll, compulsory insurance, and employment compliance. Our guide to hiring employees in Vietnam explains the requirements.
Salary PIT Filing Under the Temporary 2026 Rules
Resolution No. 66.16/2026/NQ-CP introduced a temporary quarterly filing arrangement for salary and wage PIT declarations, effective April 15, 2026.
The Tax Department subsequently directed the relevant salary PIT forms, including 02/KK-TNCN and 05/KK-TNCN, to quarterly filing starting with the April 2026 tax period.
The resolution is scheduled to remain effective until February 28, 2027. However, corresponding provisions can cease earlier if superseding legislation or implementing regulations take effect.
The VAT-quarterly eligibility condition also appears in the broader PIT filing framework. Employers should distinguish those general eligibility rules from the specific temporary treatment of salary and wage returns and confirm the filing method applicable to their taxpayer and income category.
Employers must continue calculating and withholding PIT as salaries are paid, even where the declaration is submitted quarterly.
Emerhub's Vietnam payroll service covers salary processing, employee tax withholding, compulsory insurance, and the related reporting requirements.
Is the Business License Tax Still Payable in Vietnam?
Vietnam abolished the business license tax (lệ phí môn bài) from January 1, 2026, under Resolution No. 198/2025/QH15.
Companies no longer declare or pay this annual fee for 2026 onward, and the previous January 30 payment deadline no longer applies. Outstanding obligations from 2025 or earlier years remain payable where applicable.
Vietnam Tax Filing Calendar
The following are the main tax filing and payment deadlines under the rules applicable as of October 2026.
| Tax obligation | Frequency | General deadline |
|---|---|---|
| VAT | Monthly, where applicable | 20th of the following month |
| VAT | Quarterly, where applicable | Last day of the first month after the quarter |
| Salary PIT declarations | Quarterly for the relevant forms under the temporary 2026 arrangement | Last day of the first month after the quarter |
| Provisional CIT | Quarterly payment | Last day of the first month after the quarter under Decree 252/2026 |
| Foreign contractor tax | Per occurrence, where applicable | Within the relevant 10-day filing period |
| Annual CIT finalization | Annually | Last day of the third month after the financial year-end |
| Annual PIT finalization | Annually | Last day of the third month after the calendar year-end |
| Audited financial statements | Annually for companies subject to audit | Generally within three months after the financial year-end |
For a company using a calendar financial year, the annual CIT and employer PIT finalization deadline is normally March 31 of the following year.
These deadlines do not account for every special filing arrangement or extension. Companies should also distinguish tax declarations from actual payment obligations where the rules provide different dates.
Late payments attract interest under Law on Tax Administration No. 108/2025/QH15, which took effect on July 1, 2026. The standard rate is 0.03% per day, with separate penalties for late or incorrect filings.
Vietnam Tax Compliance with Emerhub
We help foreign-owned companies manage their accounting and tax obligations in Vietnam.
Our team handles the recurring filings and financial reporting needed to keep your business compliant. We can support you with:
- Monthly and quarterly VAT and tax filings
- Provisional CIT payments and annual tax finalization
- Payroll processing and employee tax withholding
- Annual audit coordination and financial statement preparation
- Foreign contractor tax and overseas payment documentation
Whether you are establishing a new company or already operating in Vietnam, we can manage your ongoing accounting and tax requirements.
Learn more about our accounting and tax services in Vietnam, or talk to our local team about your company's tax obligations.
Frequently asked questions
What happens if I pay less than 80% of my total CIT via quarterly provisional payments?
You will be charged a late payment interest penalty of 0.03% per day on the difference between the amount paid and the 80% threshold. This interest is calculated from the day following the Q4 payment deadline until the date the tax is fully paid.
Is the 2% VAT reduction (from 10% to 8%) permanent?
No. This is a temporary stimulus measure. Under Resolution 204/2025/QH15, the reduction is currently scheduled to expire on December 31, 2026, after which rates are expected to return to the standard 10%.
How do I handle expenses that don't have a red invoice (VAT invoice)?
In Vietnam, "no invoice = no deduction." Expenses without a valid E-invoice are generally treated as non-deductible for CIT purposes. Furthermore, remember that any payment over VND 20 million must be made via bank transfer; cash payments for large invoices will also lead to disqualification of the expense.
Does a foreign parent company providing IT support to its Vietnam branch trigger FCT?
Yes. Services provided by a foreign entity (even a parent company) to a Vietnamese entity are subject to Foreign Contractor Tax. This typically includes a VAT component (usually 5%) and a CIT component (usually 5% for services), which must be withheld before the payment is sent abroad.
Can individual staff members finalize their own PIT, or must the company do it?
If an employee has only one source of income and authorizes the company, the business handles the finalization. However, if they have multiple income sources (e.g., rental income or secondary employment), they are legally required to finalize their own tax directly with the authorities.