Updated: Dec 15, 2020
Everything you need to know about how Vietnam’s taxation system works.
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.
By Celestine Loh.
Founded in 2013, Zegal is the fastest growing LegalTech company operating across Asia Pacific and Europe. Today, business users and lawyers across the globe trust Zegal’s software to solve legal problems in an affordable and efficient way.
Zegal is led by a talented team of 60 employees and has offices in Hong Kong, Singapore, Nepal, Australia, New Zealand, and the UK.
Zegal has been featured in the New York Times, Forbes, and Huffington Post, and was recently recognised in the South China Morning Post as an emerging LegalTech company in the artificial intelligence space.