Business Tax in Viet Nam

Corporate tax in Vietnam
A corporate tax is a tax that the government levies on a company's income. The proceeds
from corporate taxes are used as a source of revenue for a country. A company's operating
income is determined by deducting costs from cost of goods sold (COGS) and amortizing
income.
( https://bbcincorp.com/vn/articles/guide-to-vietnam-corporate-tax )
Subjects to corporate tax in Vietnam are all organizations that earn income from production
and business activities of goods and provision of services. Detail:
 Enterprises established in Vietnam under Vietnamese law.

 Foreign enterprises with or without a permanent establishment in Vietnam.
 Organizations established under the Law on Cooperatives.
 Business units established under Vietnamese law.
 Other types of organizations with income.
Local companies incorporated in Vietnam are taxed on worldwide income, regardless of

whether the source of income is domestic or foreign.
Foreign companies with a permanent establishment in Vietnam are taxed on income

generated in Vietnam (whether or not such income is related to the operation of the permanent
establishment). They are also taxed on income arising outside of Vietnam but only if it relates
to the activities of the permanent establishment.
For foreign companies that do not have a permanent establishment in Vietnam, they are taxed
only on income arising in the territory of Vietnam.
Vietnam corporate tax rate
According to the Consolidated Document No. 14/VBHN-VPQH on corporate income tax, the
corporate income tax rate in Vietnam is 20% (effective from January 1, 2016).
For enterprises operating in the fields of oil and gas, rare and precious resources, the
corporate tax rate ranges from 32% to 50% depending on the type of project or enterprise.
Deductible expenses
 Actual expenditures related to business activities, vocational training, national

defense and security.
 Expenses must have appropriate invoices and vouchers to prove. For goods and
service purchase invoices valued at not less than VND 20 million, a non-cash
payment voucher must be provided, unless otherwise provided for by law.
 Expenses that are not identified as non-deductible expenses.
Expenses that are not deductible are:
 Expenses/fines for administrative violations.

 Expenses to offset by other financial sources.
 Business management expenses granted by foreign enterprises to permanent
establishments in Vietnam in excess of the limit prescribed by law.
 Spending the reserve fund in excess of the level prescribed by law.
 Interest on loans of organizations other than credit institutions and non-economic
organizations exceeds 1.5 times the basic interest rate announced by the State Bank at
the time of lending.
 Depreciation of fixed assets violates relevant laws.
 Advances in violation of relevant laws.
 Wages or salaries paid to the owner of a private enterprise or the founder of a
business who is not directly engaged in business activities.
 Borrowing interest in proportion to the unpaid charter capital.
 Deductible input value-added tax, value-added tax paid by the credit method,
corporate income tax.
 Financial support, except support for education, health and disaster relief activities.
 Contributing to a voluntary retirement fund or other social security funds in excess of
the amount prescribed by law.
 Other specific expenses shall be prescribed by the Ministry of Finance.
Tax preferences
 Generally, the corporate tax incentives in Vietnam are:

 10% in 15 years
 17% in 10 years
 10% for life
 17% for life
As for how much businesses will be entitled to, it will depend on the field, business location
and size of the investment project.
For tax incentives, eligible businesses will be exempt from tax, reducing their payable income
tax. Similarly, different types of businesses will enjoy different tax-free time frames and
different percentages of tax relief.
Tax holiday incentives:
Tax exemption for the first 4 years and 50% reduction of income tax payable for the next 9
years; or
Tax exemption for the first 2 years and 50% reduction of payable income tax for the next 4
years.
In addition to the above two incentives, some specific businesses that employ female or ethnic
minorities will receive more tax breaks.
Some information about the Vietnamese government's tax policies and support for
businesses. ( https://thuvienphapluat.vn/chinh-sach-phap-luat-moi/vn/thoi-su-phap-luat/
chinh-sach-moi/40832/tong-hop-chinh-sach-thue-ho-tro-lai-suat-cho-doanh-nghiep-moi-
nhat )
1. Extension of time limit for paying excise tax on domestically manufactured or
assembled automobiles:
This is the content of Decree 32/2022/ND-CP, accordingly, extending the tax payment
deadline for the payable excise tax amount of the tax period of June, July, August and May.
September 2022 for domestically produced or assembled cars.
The extension period is from the end of the deadline for paying excise tax in accordance with
the law on tax administration to the end of November 20, 2022.
2. Extension of time limit for paying corporate income tax
According to the provisions of Decree 34/2022/ND-CP, extending the tax payment deadline
for temporarily paid corporate income tax amounts of the first quarter and second quarter of
the 2022 corporate income tax period of enterprises and organizations falling under the
subjects specified in Article 3 of Decree 34/2022/ND-CP.
The extension is 03 months from the end of the time limit for paying corporate income tax in
accordance with the law on tax administration.
3. Extension of time limit for payment of value added tax and personal income tax of
business households and individuals
In Decree 34/2022/ND-CP, the Government allows an extension of the deadline for payment
of value-added tax and personal income tax for the payable tax amount arising in 2022 of
business households and individuals. businesses operating in the economic sectors and fields
mentioned in Clauses 1, 2 and 3, Article 3 of Decree 34/2022/ND-CP.
Business households and individuals shall pay the extended tax amount by December 30,
2022.
In addition, the Vietnamese government has had positive impacts from timely
adjustment of tax policy. ( https://dangcongsan.vn/kinh-te/tac-dong-tich-cuc-tu-dieu-chinh-
kip-thoi-chinh-sach-thue-hai-quan-622369.html )
After two years of being affected by the COVID-19 pandemic, the Ministry of Finance has
exempted and reduced taxes, fees and charges and extended a number of taxes and revenues
to remove difficulties for production and business. businesses and people. In 2022, the
Ministry of Finance has submitted to the Government and competent authorities for
promulgation and continued implementation of state budget collection policies, supporting the
economic recovery and promotion in the spirit of Resolution No. 43/2022/ QH15 of the
National Assembly and Resolution No. 11/NQ-CP of the Government.
Measures to extend tax payment and reduce taxes to stimulate economic growth have
achieved important results. Vietnam has gradually applied tax incentives to promote
enterprises to invest in research and development. These incentives focus on corporate
income tax and import and export taxes. In addition, environmental protection tax and the
equivalent have been used to achieve the goal of environmental protection, and at the same
time, tax incentives have been used to promote green growth and improve people's quality of
life.

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Corporate tax in Vietnam

 Enterprises established in Vietnam under Vietnamese law.

Local companies incorporated in Vietnam are taxed on worldwide income, regardless of

Foreign companies with a permanent establishment in Vietnam are taxed on income

Vietnam corporate tax rate

 Actual expenditures related to business activities, vocational training, national

Expenses that are not deductible are:

 Expenses/fines for administrative violations.

 Generally, the corporate tax incentives in Vietnam are:

Tax holiday incentives:

2. Extension of time limit for paying corporate income tax

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