A Guide to Vietnam’s Taxation System

Date published: 2020-11-23   — by Celestine Loh

Everything you need to know about how Vietnam’s taxation system works

vietnam skyline

Vietnam has shown itself to be a strong and tough economy, having positive growth against a global pandemic backdrop. Although its growth rate has been dampened in the face of Covid-19, Vietnam is still one of the luckier countries that has experienced solid economic growth in 2020. Vietnam’s taxation system is straightforward and is set out as such: 

Vietnam’s Taxation System

The General Department of Taxation, a branch under the Ministry of Finance oversees all taxation activities within the country. The taxation year follows the classic calendar year, 1st January to 31st December. However, if an individual that is to be taxed under Vietnam’s taxation laws arrives in Vietnam with less than 183 days remaining for the calendar year, the individual is taxed 12 months from their date of arrival. 

Individuals that have to pay taxes under Vietnam’s laws are required to have a tax code in order to file their tax returns. 

An individual is considered a resident of Vietnam for tax purposes when the following conditions are met:

  • A person is physically present in Vietnam for 183 days or more within 365 days
  • A person possesses a permanent residential place in Vietnam

Vietnam’s taxation system rates

 Personal Income Tax: 

Level of Income (in Vietnam Dollars, Dong)

Tax Rate

Up to 5,000,000

5%

Over 5,000,000 to 10,000,000

10%

Over 10,000,000 to 18,000,000

15%

Over 18,000,000 to 32,000,000

20%

Over 32,000,000 to 52,000,000

25%

Over 52,000,000 to 80,000,000

30%

Above 80,000,000

35% 

 

Corporate Income Tax: 

Vietnam imposes a flat rate tax level of 20%.

For companies that qualify under the oil and gas industry, Vietnam imposes higher tax rates of 32% to 50%. 

For companies that engage in prospecting, exploration and exploitation of mineral resources, Vietnam imposes an even higher tax rate of 40% to 50%.

To finish, those are the ins and outs of Vietnam’s taxation system so you can get all your legal ducks in a row before doing business in the nation. 

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

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READ MORE: A Guide to Singapore’s Taxation System

FURTHER READING: Guide to Cayman Island’s Taxation System

Tags: Corporate Tax | personal income tax | tax | vietnam

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