Vietnam Corporate Tax - Guide for International Expansion

Are you considering expanding your business operations to Vietnam? Understanding the country's corporate income tax (CIT) system is crucial for making informed decisions about your international growth strategy.

Vietnam offers an attractive business environment in Southeast Asia, but navigating its tax obligations requires careful planning. In this guide, we'll explore everything you need to know about corporate taxes in Vietnam, from current rates to payment procedures and compliance requirements. Whether you're establishing a new subsidiary or acquiring a Vietnamese entity, having the right financial infrastructure is essential. Wise Business can help streamline your international payments to support your expansion into this dynamic market.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Vietnam Corporate tax rate in 2025

The standard corporate income tax rate in Vietnam is 20% for most businesses, which has remained consistent in recent years. This rate applies to the taxable income of resident enterprises and permanent establishments of non-resident enterprises operating in Vietnam.¹

Vietnam also offers preferential tax rates for certain qualifying activities and industries. Enterprises engaged in encouraged investment projects may benefit from reduced rates of 10%, 15% or 17%, depending on the specific sector and location.¹ High-tech enterprises and those operating in economic zones or industrial parks may qualify for these incentive rates.¹

Foreign-invested enterprises are generally subject to the same 20% standard rate as domestic companies, reflecting Vietnam's commitment to creating a level playing field for international investors. The tax is calculated on worldwide income for resident enterprises, while non-resident enterprises are taxed only on Vietnam-sourced income.¹

Read more about Corporate Tax Planning best practices

How to pay corporate tax in Vietnam

Corporate tax payments in Vietnam must be made in Vietnamese đồng (VND) through the country's electronic tax system. The General Department of Taxation has implemented an online platform that allows businesses to file returns and make payments electronically, streamlining the compliance process for both domestic and foreign enterprises.²

Companies are required to make quarterly provisional tax payments based on estimated annual income, with the final settlement due when filing the annual corporate income tax return. The quarterly payments are typically due by the 30th day of the month following each quarter, while the annual return and final payment must be submitted within 90 days after the fiscal year-end.²

Late payment penalties in Vietnam can be significant, with interest charges applied at 0.03% per day on overdue amounts. Additionally, administrative penalties and tax penalties may be imposed for various offenses, including a 20% penalty on the amount of tax under-declared.³

Let's calculate the annual tax liability for a company with a turnover of VND 37.5 billion (approximately $1.5 million USD). Assuming a profit margin of 10%, the taxable profit would be VND 3.75 billion.

At Vietnam's standard corporate tax rate of 20%, the tax owed would be:

VND 3.75 billion × 20% = VND 750 million

If this company were to pay its tax 30 days late, the penalty would be calculated as:

VND 750 million × 30 days × 0.03% = VND 6.75 million in interest charges

VND 750 million + VND 6.75 million = VND 756.75 million

This demonstrates the importance of timely compliance with Vietnam's tax obligations.

When incorporating your business in Vietnam, having the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Vietnam

Some helpful tips to keep your company fully compliant with Vietnamese tax regulations:⁴

• Appoint a Legal Representative: Every company must have a legal representative who is a resident of Vietnam and holds a managerial position. The representative acts on behalf of the business in financial transactions, legal matters, and even in court.
• Register for Taxes Early: Once incorporated, register promptly to avoid penalties. Businesses must pay corporate income tax, VAT, withholding tax, personal income tax, and social contributions. Many companies work with corporate tax planners to stay on these obligations.
• File Annual and Quarterly Returns: Vietnam follows the calendar year. Companies must make quarterly provisional payments within 30 days of each quarter’s end and file their annual corporate tax return within 90 days after the tax year closes. Late submissions may result in a corporate tax late filing penalty and interest charges. Using software for corporate tax returns can help track deadlines and automate calculations.
• Prepare for Audits: Tax authorities may audit transfer pricing, deductions, and revenue declarations. Businesses must maintain accurate records and respond promptly to queries. The audit statute of limitations is five years, extendable to ten in tax evasion cases.

International Expansion to Vietnam

Vietnam’s fast-growing economy makes it an attractive business hub, but navigating corporate tax rules is essential. The country recorded a GDP growth rate of 7.09% in 2023.⁵ This exceeded government targets and reinforced its position as a fast-growing economy. Strong consumer demand, a rising middle class, and a population of nearly 100 million create attractive business opportunities across multiple domains.⁶

Foreign direct investment (FDI) continues to flow into Vietnam. According to the Ministry of Planning and Investment, FDI stock reached $297 billion at the end of 2023 ². This growth is supported by Vietnam’s participation in 16 free trade agreements, including the EU-Vietnam Free Trade Agreement, CPTPP, and RCEP. Such agreements expand market access, reduce trade barriers, and build confidence in long-term investment. Vietnam has also signed double taxation avoidance agreements with 80 countries. This is to make corporate tax submission easier for global companies.⁷

Political stability further strengthens its business environment. The unitary system ensures consistency in policy implementation, giving investors greater certainty. On top of this, Vietnam’s shipping fleet and seaport infrastructure rank third among the strongest in Southeast Asia, connecting businesses to global markets efficiently.⁸

Moreover, the country also offers a competitive workforce. Vietnam has over 52 million workers, providing companies with access to skilled and affordable labour.⁹ Combined with one of the lowest corporate tax rates in the region, Vietnam is attractive for manufacturers, exporters, and service providers. Many companies outsource corporate tax or seek support from a corporate tax lawyer to navigate local tax and corporate law. These are proactive measures taken to ensure compliance.

Given below are the steps you should take to establish your business in Vietnam:¹⁰

1. Conduct market research and create a business plan.
2. Choose your location and business name.
3. Apply for the Investment Registration Certificate (IRC).
4. Obtain the Enterprise Registration Certificate (ERC), which also serves as your tax registration number.
5. Open a local bank account.
6. Build reliable bookkeeping and reporting systems.

Tapping into the Vietnamese corporate sector can be a highly favourable decision if you do all your homework. Scrutinize its tax policies and currency protocols to ensure you stay on the right track.

Discover the top 5 best Corporate Tax softwares

Incorporation of Business in Vietnam

Foreign investors must go through a clear registration process overseen by the Department of Planning and Investment to incorporate a business in Vietnam. Before registration can begin, every company must secure a legal business address. This address will be used for all official communications and corporate tax submission purposes.¹⁰

The first official step is applying for an Investment Registration Certificate (IRC). This document approves investment in Vietnam within permitted business sectors. The process usually takes 15 to 20 working days. Once the IRC is issued, the next step is to apply for an Enterprise Registration Certificate (ERC). The ERC legally establishes the company, assigns a tax code, and enables business operations such as opening a bank account, hiring staff, and fulfilling corporate tax payment dates.¹⁰

Investors must also finalise the company charter, confirm shareholder structure, and appoint a legal representative. The charter outlines how the company will be managed, while shareholder information ensures proper ownership records. In many cases, foreign investors must also show proof of capital contribution in USD.¹⁰

Business Entities in Vietnam

Under the Enterprise Law 2020, businesses can choose from five main types of legal entities:¹¹

• Private Enterprise: Owned by one individual with unlimited liability for debts and obligations. This type does not have a separate legal status.
• Limited Liability Company (LLC): This type of company can be single-member or multi-member (up to 50 members). Owners only take responsibility to the extent of their charter capital, which makes it a popular choice for foreign investors.
• Joint Stock Company (JSC): This type of company divides its capital into shares and requires at least three shareholders. JSCs have more complex governance structures suitable for larger enterprises seeking growth.
• Partnership Company: Formed by at least two general partners sharing unlimited liability and capital-contributing partners. Partnerships cannot issue securities.
• State-owned Enterprises (SOE): These are owned fully or partially by the government, operate mainly in strategic industries, and enjoy favourable policies.

Understanding entity types helps businesses meet obligations under tax and corporate law. Every company must follow Vietnam’s corporate tax allowance rules and prepare for annual reporting. Many investors seek advice on filing a corporate tax return, as the country has strict requirements and set corporate tax due date schedules.

Choosing the right entity and completing registration properly ensures smooth operations and compliance with corporate tax payment dates.

International corporate tax best practices

Managing international corporate tax obligations requires a strategic approach that balances compliance with efficiency. Successful multinational companies implement several key practices to navigate complex tax environments like Vietnam's.

Maintaining accurate and timely financial records is fundamental to international tax compliance. This includes keeping detailed documentation of all transactions, transfer pricing arrangements, and intercompany dealings. Regular reconciliation between local accounting standards and international reporting requirements helps prevent discrepancies that could trigger audits or penalties.

Understanding and leveraging double taxation agreements (DTAs) can significantly reduce overall tax burdens. Vietnam has signed DTAs with over 80 countries, providing mechanisms to avoid double taxation on the same income. These agreements often include reduced withholding tax rates on dividends, royalties, and interest payments between treaty countries.

Implementing robust transfer pricing policies ensures compliance with local regulations while optimising the global tax position. Vietnam has specific transfer pricing rules that require documentation of intercompany transactions at arm's length prices, making proper documentation essential for multinational operations.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Vietnam efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Vietnam

Who is liable for corporate tax in Vietnam?

All resident enterprises in Vietnam are liable for corporate income tax on their worldwide income. An enterprise is considered resident if it is established under Vietnamese law or has its head office or place of effective management in Vietnam. Non-resident enterprises are subject to tax only on their Vietnam-sourced income through permanent establishments or specific types of income subject to withholding tax.

Are there any tax incentives for businesses in Vietnam?

Yes, Vietnam offers various tax incentives to encourage investment in priority sectors and regions. These include reduced tax rates of 10% for high-tech enterprises and certain manufacturing activities, 15% for enterprises in encouraged sectors, and tax holidays ranging from 2 to 4 years for qualifying projects. Special economic zones and industrial parks may offer additional incentives including extended tax holidays and reduced rates.

What is the tax treatment of dividends in Vietnam?

Dividends paid by Vietnamese companies to resident shareholders are generally exempt from corporate income tax at the recipient level. However, dividends paid to non-resident shareholders are subject to withholding tax at rates ranging from 0% to 20%, depending on the applicable double taxation agreement. The standard withholding tax rate is 20%, but this can be reduced significantly under treaty provisions.

What is the process for registering for corporate tax in Vietnam?

Companies must register for corporate income tax as part of their business license application process. This involves submitting required documentation to the local Department of Planning and Investment and subsequently registering with the tax authorities. Foreign-invested enterprises must complete additional procedures including obtaining an investment registration certificate before commencing operations.

What are the common pitfalls to avoid regarding corporate tax in Vietnam?

Common mistakes include failing to maintain proper transfer pricing documentation, missing quarterly provisional payment deadlines, inadequate record-keeping for tax-deductible expenses, and not properly applying available tax incentives. Additionally, many companies underestimate the importance of understanding local accounting standards and their interaction with tax regulations, leading to compliance issues and potential penalties.

Sources used in this article:

1. PwC Tax Summaries: Vietnam Corporate Income Taxes
2. PwC Tax Summaries: Vietnam Tax Administration
3. PwC: Vietnam Tax Updates 2024 (PDF)
4. Vietnam Briefing: Roles of a Legal Representative
5. Ministry of Planning and Investment: Vietnam's GDP Growth
6. Vietnam Briefing: Why Vietnam for Business
7. U.S. Department of State: 2024 Investment Climate Statement
8. VnEconomy: Cargo Transport via Seaports
9. Vietnam Social Security: Social Security News
10. Empleyo: How to Start a Business in Vietnam
11. LTS Law: Types of Businesses in Vietnam

Sources last checked 15/09/2025