Taxes in Vietnam.

The basic taxes for all enterprises registered in Vietnam:

I. CORPORATION TAX

II. VAT

III. ANNUAL EXCISE TAX

IV. PERSONAL INCOME TAX

V. PENSION INSURANCE

VI. EXERCISE TAX

VII. LAND TAX

I. CORPORATION TAX

The standard corporate income tax rate in Vietnam is 20% of taxable profits and applies to most companies, regardless of size.

Companies engaged in the exploration, production, and development of oil, gas, and certain minerals are taxed at special rates, ranging from 25% to 50%, depending on the type of project and its implementation conditions.

Vietnamese law encourages investment with tax breaks and incentives in certain sectors, such as education, healthcare, sports and culture, high technology, environmental protection, scientific research, infrastructure development, and computer software.

II. VALUE-ADDED TAX

Vietnam has several value-added tax (VAT) rates, depending on the type of goods, services, and the nature of the transaction.

The main VAT rates are:

0% applies primarily to exported goods and services, as well as to certain international transactions, subject to legally established conditions.
5% applies to a limited list of socially significant goods and services, including certain agricultural products, medical supplies, educational literature, clean water, and certain other categories.
The standard VAT rate is 10%, applicable to most goods and services.
As part of the government's economic support program, a reduced rate of 8% may be temporarily applied to certain goods and services. The list of such goods and the exemption periods are regularly updated, so it is recommended to consider current legislation when calculating the tax burden.

Furthermore, certain activities are exempt from VAT. These include, in particular, certain financial, insurance, medical, and educational services, land rights transactions, and a number of other transactions expressly provided for by Vietnamese tax legislation.

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III. ANNUAL EXCISE TAX

Every company in Vietnam pays an annual patent fee of VND 2,000,000 (approximately USD 90). Payment is due by January 31 of the year following the reporting year. Newly established companies are required to pay within one month of registration, but in practice, payment is made in the reporting period following the company's incorporation.

Important update: In order to support entrepreneurship and improve the investment climate, the obligation to pay this fee has been completely abolished as of January 1, 2026.

IV. PERSONAL INCOME TAX

Personal income tax (PIT) is withheld by employers from the wages of employees, including Vietnamese citizens and foreign employees who are tax residents of the country.

For tax residents of Vietnam, a progressive tax scale is applied, calculated based on taxable income (after applying statutory tax deductions and mandatory social security contributions):

• up to VND 10 million per month - 5%;
• from VND 10 million to VND 30 million per month - 10%;
• from VND 30 million to VND 60 million per month - 20%;
• from VND 60 million to VND 100 million per month - 30%;
• more than VND 100 million per month - 35%.

Please note that the tax is calculated not on the entire salary, but on the taxable income after applying statutory tax deductions.

For individuals who are not tax residents of Vietnam, income from employment earned in the country is taxed at a flat rate of 20%, with no progressive tax rate applied.

V. SOCIAL FEES

Employers in Vietnam are required to pay mandatory social security contributions for their employees. This system includes social security, health insurance, industrial accident insurance, and, for Vietnamese citizens, unemployment insurance.

For Vietnamese citizens, the total mandatory social security contribution is approximately 32.5% of the contribution base, of which 22% is paid by the employer and 10.5% is deducted from the employee's salary.

For foreign employees with a work permit and covered by the mandatory social security system, the total social security contribution is 30% of the contribution base, of which 20.5% is paid by the employer and 9.5% is deducted from the employee's salary. This amount includes social security and health insurance contributions. Unemployment insurance does not apply to foreign workers.

Calculation Example:

If a foreign worker's salary is VND 9,000,000 per month, the monthly social security contributions will be:

employer — VND 1,845,000;
employee — VND 855,000;
total — VND 2,700,000 per month.
Over 24 months of employment, the total social security contributions will be approximately VND 64,800,000.

After termination of the employment contract and departure from Vietnam, the foreign worker has the right to apply for a lump sum social security payment, provided the conditions established by law are met. The payment amount is calculated based on the average salary and the period of participation in the social security system. For a 24-month insurance period with an average salary of VND 9,000,000, the payment amount will be approximately VND 36,000,000 (the equivalent of four average monthly salaries).

Therefore, under the above conditions, the actual costs for compulsory social insurance after receiving the lump sum payment will amount to approximately VND 28,800,000 over two years of employment, or approximately VND 1,200,000 per month. It should be noted that the foreign employee also benefits from compulsory health insurance throughout the entire period of employment.

VI. EXERCISE DUTY

In Vietnam, certain goods and services are subject to a special consumption tax (excise tax).

This tax applies primarily to goods and services classified as luxury items or products whose consumption the government seeks to limit.

Such goods include, but are not limited to:

• tobacco products;
• alcoholic beverages;
• beer;
• certain categories of passenger cars;
• gasoline;
• yachts and aircraft not used for commercial purposes;
• domestic air conditioners of a certain capacity;
• playing cards.

The special tax also applies to certain activities, including:

• casinos;
• bookmaking;
• electronic gambling;
• lotteries;
• karaoke;
• massage parlors;
• discos;
• golf clubs.

The rates of the special tax depend on the type of goods or services and can vary significantly. For example, for alcohol and tobacco products, they reach 65-75%, and for certain categories of passenger cars, they can reach 150%, depending on the vehicle's technical specifications.

If your planned business involves the production, import, or sale of goods and services subject to a special consumption tax, it is recommended that you assess the tax burden in advance when planning your business.

VII. LAND TAX

In Vietnam, taxes are imposed on the right to use non-agricultural land (land tax). This tax is paid by organizations and individuals who are granted the right to use a land plot.

The amount of tax is calculated based on the area of ​​the land plot, its cadastral value and the tax rate established by law.

Calculation formula: Tax = Plot area × Cadastral value 1 m² × Tax rate

The cadastral value of land is approved by the People's Committee of the relevant province and is periodically revised.

For most land plots, relatively low tax rates apply - 0.03%, 0.07% or 0.15%, depending on the area of ​​the plot and the conditions of its use. Increased rates can only be applied in certain cases provided for by law, for example, when using land for purposes other than its intended purpose.

In practice, for most companies with foreign investment, this tax is not a significant expense item, since land plots are usually used on the basis of a lease agreement, and the procedure for distributing tax liabilities is determined by the terms of such an agreement.

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