Vietnam Taxation Services
Premia TNC is a professional and experienced company that handles taxes for Vietnam businesses. Our mission is to provide our clients with one-stop tax services. Read more on the Vietnam Taxation System here.
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More and more investors are looking at Vietnam as a potential hub for business expansion and market penetration. It has so many things going for its economy and it’s positioned to be one of the most potent markets in all of Asia. The Vietnamese population is a highly skilled and hardworking labor force. The country also has a relatively lower cost of living, which makes it a very attractive draw for investors and workers alike. Vietnam is also uniquely positioned right at the heart of southeast Asia and that makes it a great logistics port for neighboring countries.
Aside from having a rich culture, the Vietnamese nation is primed for unprecedented economic growth. While the global pandemic may have hindered the country’s progress over the past two years, recent signs have shown that the nation is recovering and quickly gaining some footing in terms of economic performance. This is why many entrepreneurs and foreign nationals are looking towards Vietnam as the hotspot for business.
The Vietnamese government is also keen to further accelerate the growth of the nation’s economy by making it easier for entrepreneurs and businessmen to establish their operations in the region. While there are certain standards and processes that need to be fulfilled in order to do business in this opportune market, they are relatively straightforward and streamlined.
Taxation is always going to be one of the most important facets of doing clean and honest business. It’s the literal price that companies have to pay the government for tapping into their markets and regions. While tax laws may seem overwhelming, Vietnam has a well-structured taxation system that makes it easier for companies to fulfill their standards and expectations. In this article, we are going to go over all the important details that companies need to familiarize themselves with in regard to taxation laws in Vietnam.
Corporate Income Tax
The standard corporate income tax (CIT) rate in Vietnam is 20%. However, there are certain exceptions such as in the case of enterprises that operate within the oil and gas industry wherein CIT rates can range from anywhere between 32% and 50%. Other enterprises that center around the act of exploiting, prospecting, or exploring valuable resources like silver and gold are also subject to special CIT rates between 40% and 50%.
There are also preferential CIT rates of 10%, 15%, and 17% that are granted to certain enterprises that meet set criteria.
*There are no existing local, state, or provincial income taxes in Vietnam.
Personal Income Tax
The Personal Income Tax (PIT) rates in Vietnam take on a progressive structure with a cap of 35%. Non-residents have taxed at a flat tax rate of 20% while nonemployment income is taxed at rates that vary between 0.1% and 25%.
Vietnamese employees who earn 0 to 60 million VND per year are subject to a 5% PIT rate. The rates get progressively higher until employees who earn more than 960 million VND pay the maximum PIT rate of 35%.
Value Added Tax (VAT)
Vietnam imposes a standard Value Added Tax (VAT) rate of 10%. However, there is also a 5% reduced VAT rate on specific food items and other exempt goods and services. All companies that are either trading or importing into Vietnam are required to register for VAT upon receiving their business license. Monthly VAT filings are required to be submitted by the 20th of the month immediately following the reporting period. Depending on the business and location, annual reports may also be required.
Premia Taxation Services
Premia TNC is in a unique position to be able to help you and your business take flight without all of the hassles and headaches involved in accounting, auditing, and taxation. Opening up a new business in a foreign country can be incredibly daunting, especially when you consider that you have minimal knowledge of their laws and customs.
Fortunately, Premia TNC is equipped with a team of experts who are more than capable of taking your taxation problems out of your hands so that you are free to focus on all the other aspects of your business’s operations.
Vietnam’s GDP growth is projected to hover at around 6% over the next five years. This home to nearly 100 million people makes it one of the most ideal places to start a business in all of Asia. Premia TNC has knowledge and expertise when it comes to corporate services in Vietnam and is fully capable of helping you build your business from the ground up. Finding taxation services in Vietnam is made easy with the presence of Premia TNC and its team of dedicated professionals.
What are the Benefits of Availing of Premia TNC’s Services?
The more traditional route that business owners go through is to hire and develop their own internal teams to handle their tax and accounting issues. However, this can prove to be very costly and risky, especially for investors who are looking to set up shop in a foreign land. While it may seem more ideal to form an in-house team at the start, it’s not always the most cost-efficient thing to do. After all, the hiring and recruitment process can be very costly for any company. On top of that, there are the bureaucratic hassles of having to onboard new employees into a company.
This is why many start-ups will opt to avail of third-party solutions from reliable specialists like Premia TNC. Here is a brief rundown of all the benefits of going with a company like Premia TNC for tax, accounting, and auditing services.
Constantly Updated on Rules and Regulations
Vietnamese laws around taxation are constantly changing as the government is looking to adapt quickly to changing economic landscapes. Vietnam is aggressively pursuing investments and lobbying for the growth of its local economy by empowering investors and entrepreneurs alike. Availing of the services of Premia TNC means that you’re getting a team of specialists who are constantly updating themselves on the latest developments when it comes to laws and regulations of doing business in Vietnam. Any failure to adhere to relevant laws and regulations could result in fees and penalties that could prove costly to your business in the long run. Therefore, it’s immensely valuable to hire a team of experts who are constantly staying on top of these details.
Instant Access to On-Call Experts
While you might think that having an in-house team of tax and accounting specialists means that you get unbridled access to their services, the same can also be said for a third party like Premia TNC. When you avail of the services of Premia TNC, you are getting a dedicated team of experts who will be on your company’s beck and call whenever necessary. You can fully rely on these professionals to always offer you accurate and relevant tax advice, which could prove to be valuable as soon as your company starts engaging in mass transactions at a large scale.
Proper Resource Allocation
Lastly, you get to properly allocate your resources of time and money to other more important things when you avail of the services of a company like Premia TNC. If you are doing all of your tax and accounting duties on your own, then those are added responsibilities that are being put onto your plate. But by outsourcing these services to a reliable solutions provider like Premia TNC, you are effectively freeing up your mind and your time to focus on other aspects of running the business. You won’t have to get bogged down by all of the ins and outs of tax and accounting bureaucracies and this will leave you with more energy to grow your business in other aspects.
Frequently asked questions
How Comprehensive are Vietnam Taxing Laws?
All companies that have established operations in Vietnam are required to comply with all applicable business regulations including tax reporting. All companies are required to register their financial invoices with the tax office in Vietnam. It’s also imperative that businesses obtain Red Invoices (VAT Invoices) in order for them to market their products and services to their customers. These invoices must be purchased in stock under the supervision, registration, and oversight of the appropriate government bodies.
Companies with operations in Vietnam are required to submit tax statements to the tax offices in which they are registered.
How Do You Go About the Tax Payment Process?
Tax payments can be carried out online as per the Circular No. 110/2015/TT-BTC that was issued by the Ministry of Finance which came into effect in September 2015. According to the Law on Tax Administration, all enterprises and businesses in Vietnam are mandated to perform electronic tax procedures with local tax agencies such as tax registration, filing, and payments.
Which Government Bodies are in Charge of Remittances?
When it comes to remittances and other general taxation restrictions, businesses should look to the Ministry of Finance (MOF) and the State Bank of Vietnam (SBV). The MOF is in charge of adjusting tax rates and regulating remittances while the SBV handles the regulation of banking and foreign exchange within the country. This means that SBV oversees the licensing of banks to establish operations within Vietnam and set standards when it comes to the requirements needed to open bank accounts. The SBV also oversees the issuing of the official exchange rate between the VND and other international currencies.
What are the Most Important Taxes to Be Paid in Vietnam?
There are four important taxes that companies in Vietnam need to pay attention to: Value Added Tax (VAT), Corporate Income Tax (CIT), Personal Income Tax (paid on behalf of the employee), and the Business License Tax. The CIT is set at 20% for most enterprises and is most often the biggest tax expense for businesses in Vietnam. Individuals are mandated to pay their personal income tax directly to tax government agencies or indirectly through the withholding of their employer.
How Much is the Penalty for Missing Tax Deadlines?
Any Vietnamese taxpayer who fails to pay taxes before the deadline is subject to certain fines. They are expected to pay any outstanding tax liabilities plus a fine that equals to 0.05% of dues for every day that the payment is late.
What are the Common Mistakes When Finalizing Taxes?
One common mistake that companies make is when they use cash when paying for invoices that amount to more than VND 20 million. That’s because transactions that exceed VND 20 million are prohibited from being paid in cash and can leave companies liable to the appropriate penalties and fees. Another common mistake among companies is a failure to balance expenditures and revenues within the same time period. For companies that engage in international related-party transactions, many of them often fail to account for the transfer pricing documentation that needs to be compiled.
What is the Easiest Way to Fulfill Tax Duties in Vietnam?
As Vietnam attracts more investors, from both inside and outside the country, the government will continue enhance its tax laws in order to further stimulate the local economy. As such, it may be difficult for business owners and entrepreneurs to keep track of any changing laws and regulations surrounding taxation in the country. The best way that companies are able to ease their tax burdens would be to avail of the services of a professional tax consulting and accounting company. These are dedicated companies with a team of experts who have systemized strategies in helping organizations fulfill all of their tax duties in accordance to the law.
Do you need more information?
Yon may refer to these Vietnam business expansion guides to find out more:
Vietnam Taxation System
What is Vietnam's tax system like? Understand the different types of taxes you and your business can incur.
Vietnam Accounting and Auditing
Outsource your business accounting to an experienced firm.
Vietnam Company Incorporation
Guidance and important notes for new company incorporation in Vietnam.