VIETNAM Law and Practice Contributed by: Minh Duong, Phong Nguyen and Justin Gisz, Asia Counsel Vietnam Law Company Limited
Other Specialised Taxes Beyond the main two, there are also specific taxes for certain activities or goods, such as: • special sales tax, which is applicable to certain luxury and non-essential goods; • natural resources tax, which is levied on the extrac - tion or exploitation of natural resources; and • environmental protection tax, which is paid by businesses that pollute the environment. 9.2 Withholding Taxes on Dividends, Interest, Etc Remitting Profits for Foreign Investors Foreign investors in Vietnam can remit their profits abroad, but the following should be borne in mind. • Dividends – no tax is withheld if dividends are paid to another company (including foreign share - holders). However, individual shareholders will be subject to a 5% withholding tax. • Timing – profits can be remitted annually after taxes are finalised, and the tax authorities must be notified at least seven working days before the transfer. Foreign Contractor Withholding Tax This tax applies to income earned in Vietnam by for - eign entities and individuals, such as interest, royal - ties, service fees, leases and rentals, insurance premi - ums, transportation fees, and income from securities transfer, digital or e-commerce transactions and goods supplied or services rendered in Vietnam. The tax includes both VAT and CIT for businesses, or personal income tax for individuals. Rates vary depending on the type of income and the nature of Vietnam has signed DTAs with more than 80 countries, including major trading partners like Singapore, China, Japan and Australia. These agreements can help to reduce double taxation for foreign companies oper - ating in Vietnam. However, it is important for foreign contractors to actively apply for tax relief under these agreements, as automatic application is not guaran - teed. the foreign contractor’s business. Double Tax Agreements (DTAs)
and reflect Vietnam’s commitments in FTAs such as the removals of economic need test (ENT) require - ments.
9. Tax 9.1 Taxation of Business Activities
The tax information set out below is for general refer - ence purposes only. Investors need to seek advice on taxes in Vietnam from qualified tax advisers. Both domestic and foreign-owned (FDI) Vietnamese companies are subject to the following two main taxes. • Corporate Income Tax (CIT) – a standard 20% tax on the taxable profit of a company, calculated as total revenue minus deductible expenses and other assessable income. Under the new Law on Corpo - rate Income Tax No 67/2025/QH15, adopted on 14 June 2025, new preferential CIT rates have been introduced for small and medium-sized enterprises (SMEs): a 17% rate for companies with annual revenue between VND3 billion and VND50 billion, and a 15% rate for those with revenue below VND3 billion. The tiered tax regime is intended to sup - port reinvestment and business expansion of such entities. Additionally, as mentioned earlier, certain investment activities may qualify for tax breaks such as preferential rates or holidays. • Value-Added Tax (VAT) – a tax on the value added to goods and services at each stage of produc - tion and consumption. The standard rate is 10% (currently temporarily reduced to 8% until 31 December 2026), calculated as the VAT charged to customers minus the VAT paid on purchases. There are also 0% and 5% rates for specific cases such as exports and essential goods. Additional Tax Options Certain businesses may benefit from registering as an Export Processing Enterprise (EPE) to enjoy: • VAT exemption on goods and services used for production and exports; and • special tax incentives on import and export activi - ties.
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