Ho Chi Minh City GMT +7
EY
20th Floor
Bitexco Financial Tower
2 Hai Trieu Street
District 1
Ho Chi Minh City Vietnam
Principal Tax Contact
+84 (28) 3824-5252
Fax: +84 (28) 3824-5250
Robert King +84 (28) 3824-5252 Mobile: +84 902-468-806 Email: robert.m.king@vn.ey.com
Global Compliance and Reporting
Thinh Xuan Than +84 (28) 3824-5252 Mobile: +84 976-989-666 Email: thinh.xuan.than@vn.ey.com
International Tax and Transaction Services – Transfer Pricing
Phat Tan Nguyen
+84 (28) 3824-5252 Mobile: +84 938-364-777 Email: phat.tan.nguyen@vn.ey.com
International Tax and Transaction Services – Global Tax Desk Network
Phil Choi, +84 (28) 3824-5252 Korean Business Services Mobile: +84 965-149-768 Email: phil.choi@vn.ey.com Takahisa Onose, +84 (28) 3824-5252 Japanese Business Services Mobile: +84 972-063-888 Email: takahisa.onose@vn.ey.com
Business Tax Services
Anh F Thi Van Nguyen +84 (28) 3824-5252 Mobile: +84 908-749-946 Email: anh.f.van.nguyen@vn.ey.com
International Tax and Transaction Services – Transaction Tax Advisory
Thy Thi Anh Huynh
People Advisory Services
Anh Thi-Kim Ngo
Indirect Tax
Anh Tuan Thach
Law
Michael Beckman
+84 (28) 3824-5252 Mobile: +84 903-028-993 Email: thy.anh.huynh@vn.ey.com
+84 (28) 3824-5252 Mobile: +84 909-779-254 Email: anh.kim.ngo@vn.ey.com
+84 (28) 3824-5252 Mobile: +84 917-608-009 Email: anh.tuan.thach@vn.ey.com
+84 (28) 3824-5252
Mobile: +84 917-455-972 Email: michael.beckman@vn.ey.com
Hanoi
EY
+84 (24) 3831-5100 8th Floor, CornerStone Building Fax: +84 (24) 3831-5090 16 Phan Chu Trinh Street Hoan Kiem District Hanoi Vietnam
Principal Tax Contact
Huong Vu
+84 (24) 3831-5100
Mobile: +84 903-432-791 Email: huong.vu@vn.ey.com
International Tax and Transaction Services – Global Tax Desk Network
Takahisa Onose, +84 (28) 3824-5252
Japanese Business Services
Mobile: +84 972-063-888 Email: takahisa.onose@vn.ey.com
Kyung Hoon Han, +84 (24) 3831-5100
Korean Business Services
Business Tax Services
Mobile: +84 932-296-865 Email: kyung.hoon.han@vn.ey.com
Huong Vu +84 (24) 3831-5100
Mobile: +84 903-432-791 Email: huong.vu@vn.ey.com
International Tax and Transaction Services – Transaction Tax Advisory
Trang Pham
+84 (24) 3831-5100
Mobile: +84 915-022-804 Email: trang.pham@vn.ey.com
International Tax and Transaction Services – Transfer Pricing
Long Ngoc Pham +84 (24) 3211-6233
Mobile: +84 904-120-046 Email: long.ngoc.pham@vn.ey.com
People Advisory Services
Huyen Thi Thanh Nguyen
Indirect Tax
Trang Pham
+84 (24) 3831-5100
Mobile: +84 912-124-562 Email: huyen.thi.nguyen@vn.ey.com
+84 (24) 3831-5100
Mobile: +84 915-022-804 Email: trang.pham@vn.ey.com
(a) The standard corporate income tax rate is 20%. However, tax incentives are available (see Section B). Enterprises operating in the oil and gas industry are subject to corporate income tax rates ranging from 32% to 50%, depending on the location and specific project conditions. Enterprises engaging in pros pecting, exploration and exploitation of mineral resources (for example, sil ver, gold and gemstones) are subject to corporate income tax rates of 40% to 50%, depending on the project’s location.
(b) Gains derived from sales of capital or shares in entities are subject to tax at a rate of 20%. Transfers of securities by foreign investors are subject to pre sumptive tax of 0.1% on total sales proceeds, regardless of whether the transfer is profitable.
(c) See Section C.
B. Taxes on corporate income and gains
Corporate income tax. The following types of enterprises are subject to corporate income tax:
• Enterprises established under the Law on Enterprises, the Law on Investment, the Law on Credit Organizations, the Law on Insurance Business, the Law on Securities, the Law on Oil and Gas, the Trade Law and other legal entities including joint stock companies, limited liability companies, partnerships, private businesses, law offices, private public notary offices, parties to business cooperation contracts, parties to oil and gas product sharing contracts, and joint operation companies
• Public and non-public organizations engaged in business
• Organizations established under the Law on Cooperatives
• Businesses established under foreign laws that have a permanent establishment in Vietnam
• Other organizations conducting production and business activi ties that generate taxable income
Rates of corporate income tax. The standard corporate income tax rate is 20%. However, tax incentives are available (see Tax incen tives).
The rate of corporate income tax applicable to activities of explo ration and exploitation of oil, gas and other precious natural resources ranges from 32% to 50%, depending on the project.
Tax incentives
Preferential tax rates of 5%, 7%, 9%, 10%, 15% or 17% may be available to eligible projects meeting certain criteria or in indus tries or locations that are encouraged by the government.
Common incentive tax rates are discussed below.
A 10% rate for the 15-year period beginning with the first year of revenue may be available for the following:
• Income from new investment projects in areas with especially difficult socioeconomic conditions, and in economic zones and high-technology zones
• Income from new investment projects that are engaged in the following:
— Scientific research and technological development
— Application of high technologies in the list of prioritized high technologies provided by the Law on High Technology
— Cultivation of high technologies
— Cultivation of high-technology enterprises
— High-risk investment in the development of high technolo gies in the list of prioritized high technologies provided by the Law on High Technology
— Construction investment and commercial operation of establishments nursing high technologies
— Investment in development water plants, power plants, water supply and drainage systems, bridges, roads, railways, air ports, seaports, river ports airfields, stations and other par ticularly important infrastructure facilities determined by the prime minister
— Software production
— Production of composite materials, light building materials, rare materials, renewable energy, clean energy and energy from waste destruction
— Development of biological technology
• Income of new investment projects in the field of environmen tal protection, including manufacturing of equipment for treat ing environmental pollution and equipment for environmental observation and analysis, environmental pollution treatment and protection, collection and treatment of wastewater, exhaust and solid wastes, and recycling and reuse of wastes
• Income of high-technology enterprises and agricultural enter prises that apply high technologies according to the Law on High Technology
• Income from new investment projects that make products sup portive of the high-technology industry in line with the Law on High Technology or products supportive of certain industries, including textile and garment, footwear, electronics, informa tion technology, automobile assembly and mechanics, and that are not domestically produced or meet the quality standard of the European Union or an equivalent standard
• Income from new investment projects in the production sector (except for projects producing goods subject to special sales tax and mineral exploitation projects) that have investment capital of at least VND6 trillion, if the capital is disbursed within three years from the date of the investment certificate and if either of the following conditions is satisfied:
— The project’s total revenue reaches VND10 trillion per year within three years from the first year of revenue.
— The project employs more than 3,000 employees.
• Large-scale manufacturing projects (excluding projects manu facturing products subject to special sales tax or exploiting mineral resources) if all of the following conditions are satisfied:
— The investment capital must be at least VND12 trillion.
— The technology used must be certified in accordance with the Law on High Technology and the Law on Science and Technology.
— The capital disbursement must be made within five years of the licensing date.
These large-scale manufacturing projects may be considered for an extended period for the corporate income tax incentive rate of a maximum of 15 years (that is, a maximum of 30 years of the 10% corporate income tax rate).
A 10% or 15% rate applies for the entire period of operation for enterprises in the sectors of education and training, occupational training, health care, culture, sports, environment, social housing, forestry, agriculture, aquaculture, salt production and publishing. However, this incentive is subject to detailed conditions provided separately by the prime minister.
A 17% rate for the 10-year period beginning with the first year of revenue may apply to the following:
• Income from new investment projects based in areas with dif ficult socioeconomic conditions
• Income from new investment projects that are engaged in the production of high-qualified steel or energy-saving products, the manufacturing of machinery and equipment serving agri culture, forestry, aquaculture, salt production, production of irrigation equipment, the production of foodstuff for cattle and the development of traditional trades
Special incentive tax rates, generally subject to the Prime Minister’s approval, include the following:
• A 5% rate for the 37-year period beginning with the first year of revenue may apply to the following: Income from the operation of the national innovation cen ters established pursuant to the decision of the Prime Minister
Income from specially encouraged sectors investment proj ects that have total investment capital of at least VND30 trillion of which at least VND10 trillion is disbursed within the first three years and that meet further prescribed criteria for specially incentivized and special investment support projects
• A 7 % rate for the 33-year period beginning with the first year of revenue may apply to the following: Income from new investment projects (including the expan sion of such new investment projects) to establish innovation centers, new research and development centers with a total investment capital of at least VND3 trillion of which at least VND1 trillion is disbursed within the first three years Income from specially encouraged sectors investment proj ects that have total investment capital of at least VND30 trillion of which at least VND10 trillion is dis bursed within the first three years and that meet further prescribed criteria for specially incentivized and special investment support projects
• A 9% rate for the 30-year period beginning with the first year of revenue may apply to income from the specially encouraged sectors investment projects with total investment capital of at least VND30 trillion of which at least VND10 trillion is dis bursed within the first three years.
The duration of the application of preferential tax rates described above is counted consecutively from the first year in which enter prises generate turnover from new investment projects eligible for tax incentives. For high-technology enterprises and agricultural enterprises applying high technologies, this duration is counted from the year in which they are certified as high-technology enterprises or agricultural enterprises applying high technologies. For other projects applying high technologies, this duration is counted from the year in which they are granted certificates of projects applying high technologies.
If, within an assessment period, an enterprise has both incentivized activities and normal activities, it must conduct a separate accounting for income from each activity to declare and pay tax separately. Otherwise, taxable income must be prorated according
to the ratio of revenue or deductible expenses of each activity to the total revenue or deductible expenses.
Income and losses from incentivized activities and normal ac tivities (except for transfers of mineral exploratory, mining and processing rights) may be netted against each other before the tax rate of the activity with the highest amount of income is applied.
Tax incentives previously granted as a result of the export ratio are repealed, effective from 1 January 2012. Affected taxpayers can adopt either tax incentives for the remaining incentive period based on the prevailing regulations effective at the time they were licensed or those effective from 31 December 2011. Taxpayers are required to notify the tax authorities regarding the tax incen tive option selected.
Tax exemptions and tax reductions. Criteria for eligibility to tax holidays and reductions, which are set out in the corporate in come tax regulations, are described below.
Four years of tax exemption and nine subsequent years of 50% reduction apply to the following:
• Income from new investment projects entitled to the 10% cor porate income tax
• Income from new investment projects operating in the social ized sectors and difficult socio-economic areas
Four years of tax exemption and 50% tax reduction for five sub sequent years apply to income from new investment projects in the socialized sectors and in regions not included in the list of difficult socio-economic areas.
Two years of tax exemption and four subsequent years of 50% reduction apply to the following:
• Income from new investment projects in regions with difficult socio-economic conditions
• Income from new investment projects, including production of high-grade steel, production of energy-saving products, pro duction of machinery or equipment used to serve agricultural, forestry, fishery or salt production, production of irrigation equipment, production and refinement of foodstuffs for cattle, poultry or aquatic products, and development of traditional trades
• Income from new investment projects in industrial zones (except for industrial zones located in regions with favorable socioeconomic conditions)
Five years of tax exemption and 50% tax reduction for 10 subse quent years apply to income from specially incentivized and special investment support projects entitled to the preferential tax rate of 9%.
Six years of tax exemption and 50% tax reduction for 12 subse quent years apply to income from specially incentivized and special investment support projects entitled to the preferential tax rate of 7%.
Six years of tax exemption and 50% tax reduction for 13 subse quent years apply to income from specially incentivized and special investment support projects entitled to the preferential tax rate of 7%.
The continuous period of tax exemption and reduction begins from the first year in which the enterprise earns taxable income from the new investment project that is granted tax incentives. If the enterprise does not have taxable income in the first three years, the period of tax exemption and reduction begins in the fourth year following the first year in which revenue is generated by the new project.
Capital gains. Gains derived from sales of shares or assignments of capital in enterprises are subject to tax at a rate of 20%. The taxable income equals the transfer price less the sum of the pur chase price of the transferred capital and expenses incurred with respect to the transfer.
Foreign investors transferring “securities” (this is a specified term, which includes shares of public companies) are subject to presumptive tax at a rate of 0.1% on total sale proceeds, regard less of whether the transfer is profitable.
Administration. Enterprises normally use the calendar year as their tax year. Enterprises that have their own particular charac teristics of operational organization may choose a financial year of 12 months according to the Gregorian calendar and they must notify the local authorities of such year.
Enterprises must pay their quarterly income tax due by the last day of the following quarter. Enterprises must file a final income tax return and pay any balance of income tax due no later than the last day of the third month after the ending date of a calendar year or a financial year.
The total amount of provisional corporate income tax paid in the first three quarters of a tax year must not be less than 75% of the total corporate income tax liability for the year. Any shortfall is subject to late payment interest at a fixed rate of 0.03% per day, counting from the deadline for payment of the third-quarter pro visional corporate income tax liability.
An under declaration is subject to only a late-payment fine if it is self-corrected by the taxpayer. Otherwise, a penalty of 20% of the under declared tax is imposed. Late payments of tax are subject to interest at a rate of 0.03% of the unpaid amount per day.
Tax audits are performed on an ad hoc or selected basis. Any tax under declaration identified by the tax auditor is penalized at 20% (or 100% to 300% if considered to be tax evasion) and sub ject to a prevailing interest rate of the tax liability for each day late, calculated from the statutory deadline to the date of actual payment.
Dividends. Dividends paid to corporate shareholders and branch remittances are not subject to withholding tax.
Withholding taxes on interest and royalties. The rate of withhold ing tax on interest paid under loan contracts is 5%.
A withholding tax at a rate of 10% is imposed on royalties paid to foreign legal entities with respect to technology transfers and licensing.
Foreign tax relief. Vietnam has signed tax treaties with several countries that provide relief from double taxation (see Section F).
C. Determination of taxable income
General. The taxable income of an enterprise is the income shown in the financial statements, subject to certain adjustments. Taxable income includes income derived from business opera tions and other activities.
An enterprise may deduct expenses if the following conditions are satisfied:
• The expenses are actually incurred and related to the produc tion and business activities of the enterprise.
• The expenses are accompanied by complete invoices and source vouchers as required by law.
• Expenses of VND20 million or more must be supported with cashless payments (for example, bank transfers and payments with cards).
• The expenses are not on the list of nondeductible expenses shown below.
Certain expenses are not deductible in determining taxable income, including the following:
• Provisions that do not conform to the regulations of the Ministry of Finance (MOF).
• Accrued expenses not corresponding to taxable turnover that has been recognized.
• Bonuses and life insurance expenses for employees that are not clearly stated in the labor contracts, the collective labor contracts, the financial regulations of the company or the re ward regulations promulgated by the chairman of the board of management.
• Interest payments on loans corresponding to equity that is not contributed.
• Interest payments on loans borrowed from lenders that are not credit institutions or economic organizations that exceed 150% of the basic interest rate quoted by the State Bank of Vietnam at the time of the loan agreement.
• Under recently enacted transfer-pricing regulations, for compa nies having related-party transactions, loan interest expenses in excess of 30% of the total net profit generated from business activities plus net interest expenses (that is, interest expense after being offset against deposit interest income and loan interest income) and amortization costs arising in the period. Such nondeductible interest expenses can be carried forward for deduction for up to five years from the following year.
• Expenses sourced from other funding and expenses paid from the Science and Technology Development Fund of the enterprise.
• The portion of business management expenses allocated by a foreign company to its resident establishment in Vietnam (for example, head office charges allocated to the Vietnam branch) that exceeds the level allowed under the regulations.
• Depreciation of fixed assets that are not used for business activities and/or supported by ownership documents.
• Employees’ fringe benefits that exceed the cap of an average one month’s salary cost (calculated by dividing the yearly wage fund by 12) in the tax year.
• Payments above VND3 million per person per month for con tributions to a voluntary pension fund or purchase of voluntary pension insurance for employees.
• Donations except for certain donations for education, health care, natural disasters; building charitable homes for the poor, or COVID-19 pandemic prevention and control activities in Vietnam supported with required documents.
• Management expenses allocated to permanent establishments in Vietnam by the foreign company that are not in accordance with the regulations.
• Administrative penalties.
• Input value-added tax (VAT) that has been credited or refunded, input VAT on the value of a car of nine seats or less that exceeds VND1,600,000,000, corporate income tax (except for the cor porate income tax that a Vietnamese company pays on behalf of a foreign contractor under a net contract) and personal income tax (unless the employer pays net salary to employees).
• Expenses that do not correspond to taxable revenue.
• Exchange-rate loss as a result of the revaluation of the year-end balance of money items in foreign currencies, except for the revaluation of payables in foreign currencies.
• Exchange-rate loss arising in the process of capital construction of fixed assets, which is governed by a separate regulation of the MOF.
Inventories. Inventory valuation should be consistent with the accounting principles and standards selected by the company and approved by the MOF. No specific guidelines have been established by the tax authorities.
Tax depreciation. Depreciation of fixed assets is normally com puted using the straight-line method. The MOF has issued guide lines setting forth the minimum and maximum years for depreciation of various assets, but companies may apply to the MOF for permission to use different time periods. The following are the minimum and maximum years of depreciation for certain categories of assets.
Asset Years
Intangible assets
Up to 20
Buildings and factories 5 to 50
Tools and machinery 3 to 20
Transportation vehicles 6 to 30
Other fixed assets 2 to 40
Depreciation at rates exceeding those allowed by the MOF is not deductible for tax purposes. For cars with nine seats or less pur chased by enterprises for business other than passenger transpor tation, hotel or tourism, the depreciable amount is capped at VND1,600,000,000.
Relief for losses. Enterprises that incur losses may carry forward the losses to the following five years and claim such losses as deductions from taxable income. Losses must be wholly carried forward to consecutive years (including the year of a tax holiday).
Enterprises that incur losses from real-property transfers may carry forward the losses to offset income from all of their activities.
Carrybacks of losses are not allowed.
Groups of companies. Companies having dependent production establishments in different provinces shall declare tax with the local tax authority in charge of the head office and allocate the tax payment to provinces where the establishments are located based on the ratio of expenses of the dependent establishments to the total expenses of the company, except in cases in which the production establishments have tax incentives. In such situation, the establishment shall declare tax with the local tax authority of its location based on its accounted income.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature of tax Rate
Value-added tax (VAT); imposed on all goods and services consumed in and imported into Vietnam, including goods and services subject to special consumption tax, except for non-taxable items
General rate (see below) 10%
Exports of goods and services 0%
Certain goods and services, such as water supply, agricultural goods, medical goods and teaching aids 5%
(For the period from 1 February 2022 to 31 December 2022, goods and services that are currently subject to 10% VAT should be entitled to a reduced VAT rate of 8%, except for telecommunications, finance and banking services, securities, insurance, real estate business, metal production and manufacturing of prefabricated metal products, mining industry (excluding coal mining), production of coke, refined petroleum, production of chemicals and chemical products; goods and services that are subject to special sales tax and information technology (IT) under IT regulations.)
Special consumption tax; imposed on imported or domestically produced cigarettes, beer, spirits, motor vehicles, fuel and air conditioners, and various services including casinos, betting, golf courses and various places of entertainment 5% to 150% Social insurance, health insurance and unemployment insurance contributions, on salaries (applicable to Vietnamese employees); paid by Employer
Social insurance; the contribution is based on the salary and other allowances of the employees as provided in the labor contract but not exceeding 20 times the minimum salary 17.5%
(The rate of 17.5% consists of a 3% contribution to the maternity and illness fund, a 0.5% contribution to the labor and professional accident fund and a 14% contribution to the pension and death fund); from 1 July 2021 to 30 June 2022, the rate is 17% because a 0%
Nature of tax Rate
rate of the contribution to the labor and professional accident fund applies from 1 July 2021 to 30 June 2022.
Health insurance; calculated on the same base as social insurance 3%
(The rate is 0% from 1 October 2021 to 30 September 2022.)
Unemployment insurance 1%
Employee
Social insurance 8%
Health insurance 1.5%
Unemployment insurance 1% Social insurance and health insurance on salaries of expatriate employees); paid by Employer
Social insurance
From 1 January 2022 to 30 June 2022 17% (The rate of 17% consists of a 3% contribution to the maternity and illness fund, a 0% [from 1 July 2021 to 30 June 2022] contribution to the labor and professional accident fund and a 14% contribution to the pension and death fund.)
From 1 July 2022 17.5%
Health insurance; calculated on the same base as social insurance 3%
Unemployment insurance 0% Expatriate employee (from 1 January 2022)
Social insurance 8%
Health insurance 1.5%
Unemployment insurance 0% Foreign contractor tax; rate depends on type of business activity
0.1% to 10%
Land rent (land-use tax); imposed annually for the use of land; tax base is calculated by multiplying the amount of square meters of the land by land price rates, which vary by location; the higher land price rates apply to land in Hanoi, Ho Chi Minh City and other urban locations Various
Non-agricultural land use tax; taxable objects include residential land in all areas and land used for business purposes, except for certain cases
Residential land 0.03% to 0.15% Non-agricultural land used for business purposes 0.03% Land not used in accordance with granted purposes 0.15% Environmental Tax; taxable objects consist of petroleum, oil, lubricants, black coal, hydrochlorofluorocarbon (HCFC) solutions, taxable plastic bags, herbicide termite insecticides, forest products protective agents and warehouse insecticides; rates from 1 January 2019
Nature of tax Rate
Petroleum, oil and lubricants
Black coal
HCFC solution
Taxable plastic bags
VND300 to VND4,000 per liter/kilogram
VND15,000 to
VND30,000 per ton
VND5,000 per kilogram
VND50,000 per kilogram
Herbicide (restricted use category) VND500 per kilogram
Termite insecticide (restricted use category)
Forest products protective agents (restricted use category)
VND1,000 per kilogram
VND1,000 per kilogram Warehouse insecticides (restricted use category)
VND1,000 per kilogram
Natural Resources Tax (NRT); payable by industries exploiting Vietnam’s natural resources; taxable objects include metallic minerals, nonmetallic minerals, products of natural forests, natural marine products, natural mineral water, other natural resources and petroleum; tax base for NRT calculation includes the output of royalty-liable natural resources, royalty-liable price of a unit of natural resource and royalty rate Metallic minerals
10% to 20% Nonmetallic minerals 6% to 27% Products of natural forests 5% to 35% Natural marine products 2% to 10% Natural mineral water and natural water 1% to 10% Other natural resources 10% to 20% Crude oil
Encouraged investment projects
7% to 23% Other projects 10% to 29% Natural gas and coal gas
Encouraged investment projects
1% to 6% Other projects 2% to 10%
E. Miscellaneous matters
Foreign-exchange controls. Enterprises with foreign-owned capi tal must open accounts denominated in a foreign currency or the Vietnam dong (VND) at a bank located in Vietnam and approved by the State Bank of Vietnam (SBV). All foreign-exchange trans actions, such as payments or overseas remittances, must be in accordance with policies set by the SBV.
Enterprises with foreign-owned capital and foreign parties may purchase foreign exchange from a commercial bank to meet the requirements of current transactions or other permitted transactions, subject to the bank having available foreign exchange.
The government may guarantee foreign currency to especially important investment projects or assure the availability of foreign currency to investors in infrastructure facilities and other important projects.
Transfer pricing. The Vietnamese transfer-pricing regulations apply the arm’s-length principle to determine transfer prices of business transactions undertaken between related parties and is broadly consistent with the arm’s-length concept as set out in the Organisation for Economic Co-operation and Development’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD Transfer Pricing Guidelines). The applicable transfer-pricing methods under the Vietnamese transfer-pricing regulations closely resemble the methods provided by the OECD Transfer Pricing Guidelines and include the following:
• Comparable uncontrolled price method
• Resale price method
• Cost-plus method
• Profit-split method
• Comparable profit method (referred to as the transactional net margin method in the OECD Transfer Pricing Guidelines)
The Vietnamese regulations contain detailed transfer-pricing documentation requirements. The documentation must be pre pared before the submission of the annual income tax return to substantiate the arm’s-length prices and submitted on the tax au thority’s request in a timely manner.
Advance pricing agreement (APA) regulations are largely in line with the OECD Transfer Pricing Guidelines and APA regimes in other tax jurisdictions. An APA is a binding agreement between a taxpayer and the tax authority that determines in advance the basis for tax calculation, transfer-pricing methods and arm’s-length prices of the covered related-party transactions for a specific time period. The maximum APA period is three years, but it may not exceed the actual number of years that the taxpayer has operated and filed its corporate income tax return in Vietnam.
F. Treaty withholding tax rates
The withholding rates under Vietnam’s double tax treaties are listed in the following table.
Dividends Interest Royalties % % %
Australia 10/15 10 10
Austria 5/10/15 (a) 10 7.5/10
Azerbaijan 10 10 10
Bangladesh 15 15 15
Belarus 15 10 15
Belgium 5/10/15 (a) 10 5/10/15
Brunei Darussalam 10 10 10
Bulgaria 15 10 15
Cambodia 10 10 10
Canada 5/10/15 (a) 10 7.5/10
China Mainland 10 10 10
Croatia 10 10 10
Cuba 5/10/15 (a) 10 10
Czech Republic 10 10 10
Denmark 5/10/15 (a) 10 5/15
Estonia 5/10 10 7.5/10
Finland 5/10/15 (a) 10 10
France 7/10/15 (a) (b) 10
Germany
Dividends Interest Royalties % % %
5/10/15 (a) 10 7.5/10
Hong Kong 10 10 7/10
Hungary 10 10 10
Iceland 10/15 (a) 10 10
India 10 10 10
Indonesia 15 15 15
Iran 10 10 10
Ireland 5/10 10 5/10/15
Israel 10 10 5/15
Italy 5/10/15 (a) 10 7.5/10
Japan 10 10 10
Kazakhstan 5/15 10 5/10/15
Korea (North) 10 10 10 Korea (South) 10 10 5/15
Kuwait 10/15 15 20
Laos 10 10 10
Latvia 5/10 (a) 10 7.5/10
Luxembourg 5/10/15 (a) 10 10
Macau 10 10 10
Malaysia 10 10 10
Malta 5/15 10 5/10/15
Mongolia 10 10 10
Morocco 10 10 10
Mozambique 10 10 10 Myanmar 10 10 10 Netherlands 5/10/15 (a) 10 5/10/15
New Zealand 5/15 (a) 10 10 Norway 5/10/15 (a) 10 10 Oman 5/10/15 (a) 10 10 Pakistan 15 15 15 Palestinian
Authority 10 10 10 Panama 5/7/12.5 10 10 Philippines 10/15 (a) 15 15
Poland 10/15 (a) 10 10/15
Portugal 5/10/15 10 7.5/10
Qatar 5/12.5 10 5/10
Romania 15 10 15
Russian Federation 10/15 (a) 10 15
San Marino 10/15 10/15 10/15
Saudi Arabia 5/12.5 10 7.5/10
Serbia 10/15 10 10
Seychelles 10 10 10 Singapore 5/7/12.5 (a) 10 5/10
Slovak Republic 5/10 10 5/10/15
Spain 7/10/15 (a) 10 10
Sri Lanka 10 10 15
Sweden 5/10/15 (a) 10 5/15
Switzerland 7/10/15 (a) 10 10
Taiwan 15 10 15
Thailand 15 10/15 15
Tunisia 10 10 10
Turkey 5/10/15 (a) 10 10
Ukraine 10 10 10
United Arab Emirates 5/15 10 10
United Kingdom
Dividends Interest Royalties
(a) 10 10
10 10 10
Uzbekistan 15 10 15
Non-treaty jurisdictions
5/10 (a) 10 10
10
(a) The rates vary depending on the percentage of the payer’s capital that is owned by the recipient of the dividends. (b) The treaty with France does not cover the taxation of interest.
Vietnam has signed double tax treaties with Algeria, Egypt, North Macedonia and the United States, but these treaties have not yet been ratified or have not yet taken effect.