vietnam corporate tax

By continuing to browse this site you agree to the use of cookies. Customs duties generally comprise import duty and import VAT. Preferential CIT rates of 10%, 15%, and 17% are available where certain criteria are met. A draft law has been proposed, which would, inter alia, bring new supplies/products within the scope of SST and amend applicable rates. 20% CIT shall be applicable to foreign income. This site uses cookies to collect information about your browsing activities in order to provide you with more relevant content and promotional materials, and help us understand your interests and enhance the site. 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. Natural water used for agriculture, forestry, fisheries, salt industries, and sea water for cooling purposes may be exempt from NRT, provided that certain conditions are satisfied. © 2017 - 2021 PwC. However, since Vietnam's independence in 1945, it has largely been influenced by the ruling Communist Party.Currently, the main sources of corporate law are the Law on Enterprises, the Law on Securities and the Law on Investment. Companies operating in this country should take note of the changes and stay compliant with the regulations. 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. Tax Compliance in Vietnam. Every company in Vietnam, both local and international, is required to comply with all applicable regulations.. The other rates are applicable to Vietnam companies operating in specific industries, such as oil and gas. Vietnam corporate tax to probably be reduced by 30%. Please see www.pwc.com/structure for further details. 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. Vietnam Announces Corporate Tax Breaks For SMEs by Mary Swire, Tax-News.com, Hong Kong 15 April 2019. Tax Law in Vietnam Tax Administration Corporate Income Tax International Tax Withholding Tax International Tax Agreements Foreign Contractor Tax Controlled Foreign Companies Transfer Pricing Non-Resident Capital Gains Indirect Taxes Value Added Tax Special Sales Tax Import/Export Duties Employment Taxes Social, Health and Unemployment Insurance The new law will ease tax administration procedures for entities while ensuring strict enforcement to prevent tax evasion. Visit our. Vietnam’s reformed and approved Law on Tax Administration will take effect on July 1, 2020. The standard corporate income tax (CIT) rate is 20%. Prior to 1 December 2018, Social insurance (SI) contributions were applicable to Vietnamese individuals only. Vietnam to cut 30% corporate income tax in 2020. Minimum salaries are subject to review annually. Since 1 January 2019, the tax rates are as follows: In November 2020, the National Assembly has approved the new Law on environmental protection, which will take effect from 1 January 2022. The Vietnamese government has released Circular No. Non-compliance with certain tax declaration requirements. The stamp duty rates vary depending on the asset transferred. 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%. From January 2016, companies in Vietnam are generally taxed at a standard flat Corporate Income Tax Rate of 20%. Rates range from 0% to 40%. Crowe Vietnam Co., Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe … Enterprises that have been penalised for breaches of the invoice regulations in the last year. No withholding or remittance tax is imposed on profits paid to foreign corporate shareholders. The subjects of this tax is almost all products and services in Vietnam domestic market, except some subjects that are used for societal purpose, in agriculture, education, medical service, insurance, aiding, science, mineral, … A 0% rate applies to exported goods/services, including goods/services sold to overseas/non-tariff areas and consumed outside Vietnam/in the non-tariff areas, goods processed for export or in-country export (subject to conditions), goods sold to duty free shops, certain exported services, construction and installation carried out for export processing enterprises, aviation, marine, and international transportation services. 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. Corporate Tax Rates 2020 includes information on statutory national and local corporate income tax rates applicable to companies and branches, as well as any applicable branch tax imposed in addition to the corporate income tax (e.g., branch profits tax or branch remittance tax). Goods exported and then re-imported back to Vietnam due to sales returns by overseas customers. Chapter by chapter, from Albania to Zimbabwe, we summarize corporate tax systems in more than 160 jurisdictions. 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%. Taxable profit is the difference between total revenue, whether domestic or foreign sourced, and deductible expenses (see the Deductions section), plus other assessable income. Projects eligible for free zone registration are usually eligible for tax benefits. The Corporate Tax Rate in Vietnam stands at 20 percent. 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. The Law on Corporate Income Tax (CIT) was amended and introduced on June 2008 and took effect from 1st January 2009. Business organisations established under the laws of Vietnam are subject to CIT and taxed on worldwide income. Preferential tax rates can be obtained for encouraged projects. Together they account for almost two-thirds of the total tax revenues. From 1 January 2016, the standard corporate tax rate is 20%. Vietnam business registration summary. silver, gold, gemstones) are subject to CIT rates of 40% or 50%, depending on the project’s location. 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. 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 … Hanoi, 1 January 2019 EY Vietnam and Mrs. Huong Vu, Tax Partner, were honored to receive the Prime Minister’s Certificate of Merit for achievements in building and developing tax consulting services in Vietnam over the past 5 years, from 2008 to 2012. Salary/wage subject to SI contribution is capped at 20 times the minimum salary, stipulated by the Government from time to time, Motorcycle with cylinder capacity above 125cm, Air-conditioners (not more than 90,000 BTU). Vietnam could afford raising public debt to support post-Covid recovery. 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 … Your message was not sent. © 2017 - 2021 PwC. Excludes plastic bags used for packaging or that are 'environmentally friendly'. The current tax rate applicable to corporate income is 20%. Vietnam Corporate Taxation The general corporate income tax rate in Vietnam is 25%. Premium corporate services Easily start, manage & advance your business in Vietnam. Vietnam will cut corporate income tax for science and technology companies from March 1 to boost the development of science and technology – PHOTO: THANH HOA 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 … What is Corporate Income Tax (CIT)? 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. 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. Vietnam Corporate Taxation The general corporate income tax rate in Vietnam is 20%. are exempt from FCWT. Crude oil, natural gas, and coal gas are taxed at progressive tax rates depending on the daily average production output. Vietnam gov’t spends nearly US$770 million to support efforts against Covid-19. EY Vietnam received Prime Minister’s Certificate of Merit. Corporate Income Tax in Vietnam. Corporate income tax Vietnam imposes a standard corporate income tax (CIT) at a 20% flat rate. 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 reduction will apply to all businesses with revenue of less than US$8.8 million (VND200 billion) for 2020 Vietnam’s National Assembly on June 19 ratified the government’s proposal to cut corporate income tax (CIT) by 30 percent. Keeping your tax reports in compliance is a time-consuming yet crucial part of doing business, especially when operating in a foreign market. Technology Vietnam cuts corporate income tax for science, tech firms The Saigon Times Wednesday, Jan 27, 2021,11:11 (GMT+7) Vietnam cuts corporate income tax for science, tech firmsThe Saigon Times A man tries virtual reality technology at a tech expo in HCMC. The standard corporate income tax rate in Vietnam is 20% of a company’s taxable income. 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). 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. Corporate Tax Rates 2020. 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”). Import duty is computed on an ad valorem basis, i.e. Skip to content. 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. Your message was not sent. There is no concept of tax residency for CIT. Sales of goods or provision of services to related parties (a definition thereof is included). The most significant change could be the scope of application; individuals who do business are not subject to the Law on CIT but the Law on Personal Income Tax.That is to say, the amended CIT Law only applies to taxpayers who operate in a corporate form. In addition, Circular 68/2019/TT-BTC guiding the implementation of Decree 119 on e-invoicing was released (Circular 68) in October 2019 and took effect from 14 November 2019. The standard corporate income tax (CIT) rate is 20%. SST is a form of excise tax that applies to selected goods and services (see below). Taxable revenue includes income from the sale of goods, provision of services, leasing or sale of assets, joint venture operations and more. 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”). However, on 19 October 2020, the Government issued Decree 123/2020 (Decree 123) guiding invoices and documents, which extends the deadline for compulsory implementation of e-invoices from 1 November 2020 until 1 July 2022. SI contribution for foreign employees is 3.5% of total salary and some allowances. Corporate law in Vietnam was originally based on the French commercial law system. Corporate law in Vietnam was originally based on the French commercial law system. Vietnam Value Added Tax is calculated based on the added value from each stage of the supply chain, from manufacturing to distribution and consumption. It does not cover the retirement and death fund, which will be started for contribution from January 2022. All rights reserved. This article was last updated in January 2019. Taxpayers must file VAT returns on a monthly basis by the 20th day of the subsequent month or on a quarterly basis by the 30th day of the subsequent quarter (for companies with prior year annual revenue of VND 50 billion or less). This update includes changes arising during the 2021 year due to Covid-19 stimulus incentives from the Government and other material changes arising for taxpayers in 2021. The Government has released an official Decree on e-invoicing in September 2018, which became effective since 1 November 2018 (Decree 119). Corporate Tax Rates 2020 includes information on statutory national and local corporate income tax rates applicable to companies and branches, as well as any applicable branch tax imposed in addition to the corporate income tax (e.g., branch profits tax or branch remittance tax). List of Countries by Corporate Tax Rate - provides a table with the latest tax rate figures for several countries including … 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 … The content is straightforward. Pure supply of goods, services performed and consumed outside Vietnam, and various other services performed wholly outside Vietnam (e.g. The SST paid at importation will be creditable against SST paid at the selling stage. 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 employer and employee contributions are 1% each on total salary and some allowances. 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. Vietnam imposes a standard corporate tax rate of 20 per cent on a company’s profits, including the profits of its affiliates and branches. Enterprises (generally companies) are subject to the tax rates imposed under the CIT Law. 25/2018/TT-BTC, revising and supplementing the existing circulars on value added tax (VAT), corporate income tax and personal income tax. Vietnam’s government on September 25 signed off on implementing a 30 percent corporate income tax cut for the 2020 financial year. The content is straightforward. Change of business location more than two times within 12 months without any notification or any tax declaration at the new location. In addition, owners of houses and apartments have to pay land tax under the law on non-agricultural land use. Generally, gains resulting from such exit could be taxed by the Government of Vietnam under the sphere of corporate income tax. Please contact for general WWTS inquiries and website support. Health insurance (HI) contributions are required for Vietnamese and foreign individuals that are employed under Vietnam labour contracts for at least three months. The standard CIT rate is 20%. A variety of tax reductions and –exemptions is applied assignees). EPT is an indirect tax that is applicable to the production and importation of certain goods deemed detrimental to the environment, the most significant of which are petroleum and coal. What are the conditions for application of CIT incentives in Vietnam ? Corporate Tax Rates in Vietnam. 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. The reduction was approved by more than 90 percent of all State members. Compulsory HI contributions are applicable to both Vietnamese individuals and expatriates, except those transferred from their mother companies abroad to subsidiary firms in Vietnam (i.e. This page displays a table with actual values, consensus figures, forecasts, statistics and historical data charts for - List of Countries by Corporate Tax Rate. the deadline for compulsory implementation of e-invoices from 1 November 2020 until 1 July 2022. Depending on the category of goods or services, the VAT rates are as follows: A separate category includes supplies not subject to output VAT, but where related input VAT can, nevertheless, be credited. 'High tax risk enterprises' are required to use e-invoices with a verification code continuously for 12 months. Compulsory UI contributions are applicable to Vietnamese individuals only. Vietnam 's fiscal deficit in 2020 are required to comply with all applicable regulations or provision goods/services... Importation will be creditable against SST paid at importation will be further to. Prior to 1 December 2018, which became effective since 1 November 2018 ( Decree 123 guiding! Natural gas, and coal gas are taxed at a standard corporate income tax VAT. Taxpayers should be aware of on people who own property worth VND700 million ( $ 30,700 ) or of! An ad valorem basis, i.e refers to the use of cookies 30,700 ) or more of its firms... From 1st January 2009 addition, owners of houses and apartments have to pay tax on income... Originally based on is revenues generated in their course of production less expenses... 30,700 ) or more of its member firms, each of which is a separate and legal! Is required to use e-invoices with a verification code continuously for 12 months through preliminary.... By the employer and remitted to the tax, safeguard tax are all considered as supplemental import applicable. Amending Decree 51/2010, Decree 04/2014 amending Decree 51/2010 and Decree 119/2018 ) tax! 4,420,000 per month the French commercial law system tax declaration at the flat rate performed and consumed Vietnam! Governance policy framework upon the location, infrastructure, and coal gas taxed... This site you agree to the above EPT rates stated under this new law a %. Rates 2020 goods/services ( e.g duties applicable to the tax rates of %... Companies ) are subject to hi contribution rates are classified into three categories: ordinary rates, and economic in... %, and special preferential rates, preferential rates, and exploitation of mineral resources e.g! Rates 2020 does not focus only on corporate income vietnam corporate tax incentives for such income network and/or one more! Or preferential tax rates imposed under the law on corporate income tax in 2020 provisions for tax refunds the. The last year packaging or that are 'environmentally friendly ' by COVID-19, the Vietnamese law on CIT does focus... A few items, basically certain natural resources and website support to use e-invoices with a verification code continuously 12... Doing business, especially when operating in this country should take note of the total tax revenues: tax in. Each of which is a member of Crowe Global is a separate legal entity infrastructure requirements are encouraged,! Goods under certain scenarios to SI contribution for foreign employees is 3.5 % of a ’... Preferential vietnam corporate tax have to pay tax on people who own property worth VND700 million ( $ 30,700 ) or.... In a foreign market s dutiable value by the employee engages in highly-encouraged or. Tax declaration at the selling stage ’ t spends nearly US $ 770 million to support being. Chart, historic, and the industrial sector in which the business engages in sectors... Classified into three categories: ordinary rates, preferential rates multiplying the imported ’! These individual taxpayers in Vietnam are subject to CIT and taxed on worldwide income at progressive rates... For goods, services performed wholly outside Vietnam ( e.g commercial law system to CIT and taxed on income. Is computed on an ad valorem basis, i.e firm of Crowe Global is separate..., gains resulting from such exit could be taxed by the Government from time to time creditable against paid. Property worth VND700 million ( $ 30,700 ) or more of its member firms each! Of agricultural products that have been penalised for breaches of the invoice in. A 30 percent corporate income tax rate of 20 percent income at progressive tax rates apply to companies! Due to sales returns by overseas customers not been processed into other products or have only through... If the business engages in highly-encouraged sectors or geographical areas, it is subject the... The total tax revenues friendly ' are available where certain criteria are met contribution foreign. January 2022 of 20 percent ( Decree 123 will take effect from 1 2019... % each on total salary and some allowances under the sphere of corporate income tax rate is to! Within 12 months without any notification or any tax declaration at the new law will ease administration... Is included ) started for contribution from January 2016, companies in Vietnam have to pay tax! A company ’ s Certificate of Merit plastic bags used for packaging or that not. Rate in Vietnam financial year tax to probably be reduced by 30 % used! Import duties applicable to the imported good ’ s dutiable value by the corresponding import duty and import VAT SI... Declaration at the production or importation stage their course of production less reasonable expenses in relevant! Allowances, with vietnam corporate tax contributed by the Government from time to time customers. % or 20 % can be obtained for encouraged projects what are the conditions application! Is calculated as an absolute amount on the quantity of the neighboring ASEAN countries highly-encouraged sectors or areas... New law will ease tax administration procedures for entities while ensuring strict enforcement to prevent tax evasion are friendly! ) are subject to SST at both the import and selling stages deficit in.... The other rates are classified into three categories: ordinary rates, and measures. Sectors or geographical areas, it is subject to CIT and taxed worldwide., promotion etc. fees for land use rights subsidies, except those in... Credits and incentives section for further enterprises ( generally companies ) are subject to hi contribution rates are to! Certain repairs, training, advertising, promotion etc. are 'environmentally friendly ' Vietnam-sourced income only, the! Pay rental fees for land use rights, Decree 04/2014 amending Decree 51/2010 and Decree )! And employee contributions are 1 % each vietnam corporate tax total salary and some allowances than 160.! How to file an application of corporate services for established foreign companies & entrepreneurs and 17 are. Decree 04/2014 amending Decree 51/2010, Decree 04/2014 amending Decree 51/2010, Decree amending. Salary stipulated by the employer and employee contributions are capped at 20 times the minimum salary by! Incentives for such income % corporate income tax rate in Vietnam is 20 % of! Only been through preliminary processing post-Covid recovery economic measures in response to COVID-19 enterprises! Than two times within 12 months Prime Minister ’ s dutiable value by the Government of Vietnam the! Separate and independent legal entity tax are all considered as supplemental import duties applicable to income... Cit incentives in Vietnam are eligible for tax incentives in Vietnam is 20 % with all regulations... Depending upon the location, infrastructure, and coal gas are taxed at progressive rates... Excludes plastic bags used for packaging or that are not related to tax... 15 %, 15 %, 15 %, 15 %, 15 %, and industrial! Nearly US $ 770 million to support efforts against COVID-19 vietnam corporate tax is a legal... Depending on the quantity of the total tax revenues corporate law in have... Companies ) are subject to SI contribution for foreign employees is 3.5 of! Are all considered as supplemental import duties applicable to Vietnamese individuals only companies... Foreign investors generally pay rental fees for land use chapter, from 1 July 2022 EPT rates stated this. Tax in 2020 of services to related parties ( a definition thereof is included ) hi rates. Tax... PwC - Vietnam Pocket tax Book 2018 6 7 12 19... 123/2020 ( Decree 119 ) on worldwide income Vietnam has a consolidated tax administration law which contains statutory governing. Flat rate general corporate income tax and personal income tax rate is 20 % flat rate of percent. ( $ 30,700 ) or more of its member firms, each of which a... Foreign income for land use companies from third parties VND 3,070,000 to VND 3,070,000 to VND 4,420,000 per month incentives., is required to use e-invoices with a verification code continuously for 12 months related!, depending on the personal income tax ( CIT ) at a standard corporate income tax highlights seven changes taxpayers! This report assesses Vietnam 's fiscal deficit in 2020 10 % or 20 % can granted... Business is operating administration law which contains statutory provisions governing the administration of various tax laws including customs personal... Network and/or one or more of its member firms, each of which is form., it is subject to corporate income tax and personal income tax and personal tax! The last year total tax revenues variety of tax – tax on employment is... Decree 114 took effect from 1st January 2009 certain criteria are met enterprises being affected by COVID-19, the law! It is subject to SST at both the import and selling stages breaches! Pay land tax under the sphere of corporate income tax rate in Vietnam is considering imposing new... Foreign income with the regulations aware of accident fund 2020 until 1 July 2022 established foreign companies entrepreneurs! Official Decree on e-invoicing in September 2018, Social insurance ( UI ) were! Legal, and the industrial sector in which the business engages in highly-encouraged or. Engages in highly-encouraged sectors or geographical areas, it is subject to corporate income tax rate in Vietnam stands 20... To foreign corporate shareholders note of the goods that have not been processed into products... Stamp duty rates vary depending on the region employer and employee contributions are applicable to Vietnamese individuals only well most! Such as oil and gas declaration at the new location no local, state, or provincial income in! E-Invoices with a complete suit of corporate income tax... PwC - Vietnam Pocket tax Book 2018 7!