VIETNAM Law and Practice Contributed by: Ngoc Luong Trinh, Tung Nguyen, Hanh Vo, Esko Cate, Nguyen Dang, Khanh Le, Hoang Nguyen and Truc Ta, VILAF
Qualifying investment projects may benefit from pref - erential CIT rates of 10%, 15% or 17%, compared to the standard 20% CIT rate. Such incentives are generally available to projects in encouraged sectors, including high-tech enterprises, the production of high-grade steel, energy-efficient products and other priority industries, as well as projects located in eco - nomic zones, high-tech parks and areas with difficult or especially difficult socio-economic conditions. Eligible projects may also enjoy CIT holidays, typi - cally comprising a period of CIT exemption followed by a 50% CIT reduction for a specified period. Cer - tain large-scale, high-technology, innovation-driven or strategically important projects may qualify for enhanced incentive packages, including lower CIT rates and extended tax holiday periods. The availability and scope of these incentives depend on the sector, location, scale and nature of the invest - ment project and are subject to satisfaction of the applicable statutory conditions. 5.4 Tax Consolidation Vietnam does not currently have a tax consolidation regime. Tax is assessed on a separate entity basis. 5.5 Thin Capitalisation Rules and Other Limitations There are generally no thin capitalisation requirements under Vietnamese tax legislation. However, pursuant to investment licensing require - ments, the maximum permissible debt funding is generally limited to the difference between the regis - tered investment capital and the capital contribution recorded in the relevant investment registration certifi - cate or, where applicable, the in-principle investment approval. 5.6 Transfer Pricing Vietnam’s transfer pricing regime, governed by Decree 255/2026/ND-CP, effective from 1 July 2026, is broad - ly aligned with OECD principles. Taxpayers engaging in related party transactions are generally required to file annual transfer pricing disclosures and maintain contemporaneous transfer pricing documentation. Under Decree 255/2026/ND-CP, the deductible net
interest expense for corporate income tax purposes of enterprises having related party transactions is subject to a cap of 30% of the taxpayer’s total net profit from business activities during the tax period, plus interest expense after deducting interest income from deposits and loans arising during the period, plus depreciation expense incurred during the period. 5.7 Anti-Evasion Rules Vietnam has anti-evasion and anti-avoidance rules under its tax regulations. These include, among other things, transfer pricing rules for related-party trans - actions, restrictions on deductible expenses and the tax authorities’ powers to reassess or recharacterise transactions that lack economic substance or are undertaken primarily for tax avoidance. 5.8 Tariffs Vietnam imposes import and export duties in accord - ance with the Law on Export and Import Duties and related implementing regulations. Applicable tariff rates depend on the classification of the goods, their customs value origin and Vietnam’s international treaty commitments. Vietnam is a member of the WTO and numerous free trade agreements, including CPTPP, EVFTA and RCEP, under which preferential or special preferential import duty rates may apply to goods that satisfy the applicable rules of origin and other treaty requirements. In practice, import duty rates vary significantly across product categories. Higher import duties are gener - ally imposed on products for which Vietnam seeks to provide protection to domestic industries, includ - ing certain agricultural and steel products, as well as selected consumer goods. Goods imported from countries or territories that do not satisfy the condi - tions for most favoured nation treatment or preferen - tial tariff treatment may be subject to ordinary import duty rates in accordance with Vietnamese law. Vietnam’s tariff regime has also been influenced by global trade developments and supply chain shifts. In recent years, Vietnam has increasingly resorted to trade remedy measures, including anti-dumping duties, countervailing duties and safeguard measures, particularly in sectors such as steel, metals, chemi - cals and certain manufactured products, to protect
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