Taxation in Vietnam

September 26, 2017 | Tax

In general, foreign invested companies (FICs) and individuals doing business in Vietnam will find themselves subject to some taxes like the Vietnamese companies and locals, including enterprise income tax (EIT), VAT, personal income tax (PIT), special consumption tax, etc.

It should be however be noted that these taxes are not imposed the same to all FICs and foreigners. The method of  collection, the tax liabilities may vary considerably depending on the form of business. FICs, branches are subject to EIT, VAT and some taxes relating to their business in Viet Nam, such as import or export taxes. However, EIT will not be subject to representative offices because these must not do any business in Vietnam, the object of Ros are to advertise these mother companies and seek the Vietnam market. Regarding to foreign individuals doing business in Viet nam, the PIT will be imposed on their income. Depending on the source and level of income, the tax rates may be different from case to case, between 5% and 35% per the income.

All companies must file tax declarations in monthly, quarterly and yearly even that they are not operational or profits. All taxes in Vietnam are imposed at the national level, there are no local or provincial taxes. The FICs should pay tax in localities where they are headquartered or have duly registered branches.

Currently, the question which is asked with the wide range of number is the tax incentives in Vietnam. If the FICs and foreigners have understood their rights and tax regulations, the tax incentives will bring greatly their income. It is therefore suggested that the FICs and foreigners should take the advice from lawyers before doing business in Vietnam.



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