Non-profit

All taxes are imposed at the national level. There are no local, state or provincial taxes. The Personal Income Tax on INGO expatriate representatives, staff and specialists will be subject to Vietnamese legal regulations/documents. See Chapter 1, Article 4 of the Law on Personal Income Tax, which came into effect on 1 January 2009. All INGOs with Representative Office status are exempt provided that it is declared in their Memoranda of Understanding. Those INGOs with Project Office status and those applying for the Certificate of Registration of Operations should include a clause on PIT exemption when signing their Memoranda of Understanding. Read more here.

See details for applying for PIT exemption here.

REPORTING: INGOs will be responsible to prepare written reports on their operations in Vietnam every six months and submit them to COMINGO, with a copy to the relevant People’s Committee where they conduct activities.

For Profit

Most business activities and investments in Vietnam will be affected by the following taxes:

• Corporate income tax (20%);
• Various withholding taxes;
• Capital assignment profits tax (20%);
• Value added tax (10% standard);
• Import duties;
• Personal income tax of Vietnamese and expatriate employees (5-35% for residents, flat-rate of 20% for non-resident/abroad employees);
• Social insurance, unemployment insurance and health insurance decontributions.

There are various other taxes that may affect certain specific activities, including:

• Special sales tax;
• Natural resources tax;
• Property taxes;
• Export duties;
• Environment protection tax

All these taxes are imposed at the national level. There are no local, state or provincial taxes. The tax year end in Viet Nam is 31 December. Read more on page 29-54 here.

Financial reporting: The basic set of financial statements prepared under Vietnamese Accounting System comprises the following:

• Balance sheet
• Income statement
• Cash flow statement
• Notes to the financial statements, including a disclosure on changes in equity

An enterprise is required to appoint a Chief Accountant who must satisfy the criteria and conditions stipulated by the Law on Accounting and guiding regulations. The annual financial statements must be approved by the Chief Accountant and the Legal Representative and a copy of the financial statements must be submitted to the local authorities within 90 days of the end of the financial year.

#1 Tax registration The first thing you need to do after obtaining a Business Registration Certificate is to complete tax registration at a local tax department. Each company will receive a company registration code that simultaneously acts as a tax code number as well.

#2 VAT invoices Companies in Vietnam can use electronic, pre-printed, self-printed, or ordered invoices. Pre-printed invoices are for companies applying direct deduction method and sold by the Municipal Taxation Department. You may also use electronic, self-printed VAT invoice, or ordered invoice templates. However, invoices must be registered with the Municipal Taxation Department. Thus, the process of issuing invoices can take up to 10 days.

#3 Business license tax The newly established enterprise has to declare business license by submitting an application and pay the business license tax by the last day of the month of acquiring business and tax registration certificates. The tax is paid annually.

Capital contribution The founders have 90 days to make the capital contribution after obtaining the Business Registration Certificate. If the capital contribution is less or more than initially registered, you must re-register the business license and change the amount of capital contribution in it as well.

Corporate compliance in Vietnam throughout the year

Quarterly compliance Reporting and taxes Type of Tax | Quarterly Declaration and Payment Due Value-Added Tax | No later than the 30th day of the following quarter Personal Income Tax | No later than the 30th day of the following quarter Corporate Income Tax | Paid on estimates, no declaration required, Due: the 30th day of the following quarter

Foreign labor use report Hiring foreign nationals requires you to submit a foreign labor use report on a quarterly basis, according to Circular 40/2016/TT-BLDTBXH. The report should give an overview of the use of foreign workforce in the last quarter.

Biannual compliance

Labor use report You are required to register all employees on a payroll in Vietnam within 30 days after the incorporation. The Municipal Department of Labour also asks for a labor use report twice a year. The report should provide an overview of the number of employees, their positions, qualifications, type of labour contract, such as fixed-term or indefinite duration labor contracts, etc.

Annual compliance

Audited annual report The Law on Independent Audit stipulates that audited annual financial reports must be submitted by the end of the first quarter, 90 days after the end of the fiscal year. Reports must be inspected by an independent Vietnamese auditing company.

Foreign investment reports The reports of foreign investors’ projects should also be presented at the beginning of the year. These statements give feedback on profits, expenses, and losses met during the year.

Business license tax Paying the business license tax is one of the first things to do together with declaring business license tax after incorporation. However, it is an annual tax that has to be paid every year. The due date of business license tax is on 30 January. The amount of the tax is paid according to their registered capital. If you wish to change the amount of capital contribution and this new capital contribution changes the amount of the tax the company has to pay, you need to declare and submit business license application again.

Corporate income tax and personal income tax settlement report Final Corporate Income Tax reports must be submitted annually and no later than 90 days after the end of the financial year. The outstanding tax demand must be fulfilled simultaneously. The same applies to Personal Income Tax returns. In addition to quarterly compliance, the company has 90 days from the end of the fiscal year to submit the final PIT report and pay any outstanding additional tax or receive any exceeded tax.

Sources

• Corporate Compliance in Vietnam
• Vietnam Taxes
• Foreign Experts to be Exempt from PIT
• Detailed tax information
• PWC Tax Info