Tax Reporting Requirements for Foreign Businesses in Vietnam

Vietnam’s growing economy, integration into global trade, and aggressive FDI strategies have created a tax environment that is both promising and complex for foreign businesses. The country’s tax framework operates under a mix of centrally issued laws and evolving sub-decrees, often adjusted to reflect international standards. For foreign enterprises, tax compliance is a key indicator of operational legitimacy and long-term investment viability. From corporate taxation to transfer pricing, reporting requirements can vary by business model, legal structure, and sector.

Recent developments, particularly Vietnam’s increasing digitization of tax filings and OECD-aligned transfer pricing reforms, mean that foreign businesses must stay alert to new regulations and penalties.

Understanding foreign business structures and their reporting exposure

Vietnam offers multiple entry models for foreign investors, each carrying distinct tax reporting responsibilities. Foreign-invested enterprises (FIEs), structured as limited liability or joint stock companies, are fully subject to Vietnam’s corporate, value-added, and personal income tax regimes. Branch offices, though not separate legal entities, are taxed as dependent units of their foreign parent and must report local revenue and expenses. Representative offices (ROs) are not permitted to generate income, but they still bear reporting duties, including employee personal income tax and labor declarations.

Meanwhile, project-based setups like business cooperation contracts (BCCs) and build-operate-transfer (BOT) schemes are taxed under special arrangements, typically agreed upon with the authorities as part of the investment licensing process.

Corporate income tax obligations

Vietnam imposes a standard corporate income tax (CIT) rate of 20 percent, with preferential rates available to eligible investment projects in high-tech, education, or certain geographical areas. CIT is computed annually but provisionally declared and paid quarterly. Businesses must file a provisional CIT declaration within 30 days after the end of each quarter and submit the final annual return no later than 90 days after the fiscal year-end.

The final return must reflect accurate accounting results and reconcile provisional payments with actual liability. Required documents include audited financial statements, detailed profit and loss reports, and tax finalization forms.

Failure to reconcile declared and actual profits may trigger audits or penalties.

Value-added tax reporting for foreign enterprises

Value-added tax (VAT) applies to most goods and services in Vietnam at a standard rate of 10 percent, with exemptions or reduced rates for essential items. Foreign businesses must register for VAT upon establishing a taxable presence, typically through a permanent establishment or local subsidiary. VAT is reported monthly, with declarations due by the 20th of the following month. Businesses must also maintain input and output VAT invoices to support their claims. VAT refunds are permitted in certain cases, especially for exporters or large-scale capital investments, but require rigorous documentation.

Foreign businesses engaged in trading, consulting, or manufacturing must ensure their invoicing systems comply with Vietnam’s electronic invoicing regulations to claim deductions and avoid disqualification of input tax credits.

Personal income tax and employer responsibilities

Foreign-invested enterprises and other foreign employers are required to withhold personal income tax (PIT) from their employees’ salaries and remit it to the tax authorities monthly. This obligation applies to both Vietnamese and foreign employees. For foreign executives and specialists, PIT rates depend on residency status. Resident taxpayers are taxed on worldwide income, while non-residents are taxed at a flat rate of 20 percent on Vietnamese-sourced income.

Employers are also responsible for enrolling employees in Vietnam’s compulsory social insurance schemes, which include retirement, health, and unemployment contributions. These are shared between the employer and the employee and must be reported together with PIT declarations.

Transfer pricing documentation and disclosure requirements

Vietnam has adopted comprehensive transfer pricing rules aligned with the OECD BEPS Action Plan. Any foreign business engaging in related-party transactions must prepare and retain transfer pricing documentation, including a local file, master file, and country-by-country report (CbCR), where applicable. These requirements apply when specific revenue or transaction thresholds are met. The deadline for submitting the local and master files aligns with the CIT finalization filing, within 90 days after year-end. The CbCR must be submitted separately if the global ultimate parent entity meets consolidated revenue thresholds.

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At Dezan Shira & Associates, our Vietnam tax experts help foreign businesses stay fully compliant with local regulations. Contact us to ensure your operations in Vietnam meet all legal requirements.

Transfer pricing disclosures must be submitted with the annual tax return and must be supported by benchmarking analyses.

Navigating other tax liabilities

Beyond standard CIT, VAT, and PIT, foreign businesses may encounter additional tax obligations depending on their operations. The foreign contractor tax (FCT) applies to payments made to overseas entities providing services or goods in Vietnam, with applicable rates determined by the nature of the contract. An environmental protection tax may apply to manufacturing firms dealing with petroleum, plastic bags, or chemical substances.

Land use fees and property taxes are levied on entities holding land-use rights, typically on an annual basis or upon property transfers.

Certain legal transactions, including capital contributions, asset transfers, or real estate registration, trigger stamp duties.

These additional taxes require careful contract structuring and timely declaration to avoid compounding liabilities.

Electronic tax reporting and filing infrastructure

Vietnam has modernized its tax reporting environment through a centralized e-tax platform operated by the General Department of Taxation (GDT). All foreign enterprises with a Vietnamese tax code must submit filings and payments electronically. Businesses must obtain a digital signature (e-token) issued by licensed service providers and register it with the GDT portal.

Monthly and quarterly declarations, including CIT, VAT, PIT, and FCT, are filed through this system. Technical compliance, including proper XML formatting and compatibility with the e-filing platform, is essential.

Penalties, audits, and enforcement measures

Non-compliance with Vietnam’s tax reporting requirements can lead to escalating penalties. Late submissions typically result in daily fines based on outstanding amounts; while underreporting or tax evasion carries higher penalties, including potential interest charges or criminal liability for severe cases. The tax authority conducts both scheduled and surprise audits, with a focus on high-risk sectors and foreign-invested enterprises.

Strategies for maintaining tax compliance

To ensure full tax compliance, foreign enterprises should implement robust accounting and documentation systems aligned with Vietnamese statutory requirements. Maintaining accurate books in VAS (Vietnamese Accounting Standards), reconciling internal reports with tax filings, and retaining all supporting documents are foundational practices.

Equally important is staying current with legal updates through official sources or advisory bulletins, as Vietnam continues to revise tax codes to align with international commitments and domestic revenue goals.

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