Taxes in Vietnam
The basic taxes for all enterprises registered in Vietnam:
I. CORPORATION TAX
In case the monthly net income on the company's current account exceeds 1,67 billion VND (71 000 USD), the tax is 22% of the net profit, if less than 20%.
Companies that deal with oil and gas operations as well as the natural resources sector may be subject to a special tax treatment, and their income will be taxed from 32 to 50% depending on their particular project and location.
Vietnamese legislation encourages investment by tax benefits and incentives in certain sectors such as education, health, sports and culture, high technology, environmental protection, research, infrastructure development and computer software.
The VAT rate in Vietnam varies as follows:
- 0% is applied to export, reinsurance abroad, credit services abroad, foreign financial investments, foreign portfolio investments;
- 5% is applied to such goods as water, fertilizers, medicines, educational equipment, children's toys, books on science and art, natural agro-industrial products, animal feed, scientific and agricultural services, manufacture etc;
- 10% applies to most goods and services.
Several goods and services, for example, the transfer of rights to land, certain types of financial and medical services, training, life insurance and non-commercial insurance, public transport, transfer of computer technology, materials for the production of export products, etc. are exempt from VAT.
Each company in Vietnam pays an annual excise tax of 2 000 000 VND (about 90 USD). The payment is made until January 31 of the year following the reporting year. The newly established company pays within one month after the completion of registration.
Both Vietnamese and foreign employees must pay personal income tax. In Vietnam, the progressive rate of personal income tax is from 5% to 35%:
- Wages up to 9 million VND per month - 0%;
- from 9 million to 10 million VND per month - 10%;
- from 10 million VND to 18 million VND per month - 15%;
- from 18 million VND to 32 million VND per month - 20%;
- from 32 million VND to 52 million VND per month - 25%;
- from 52 million VND to 80 million VND per month - 30%;
- more than 84 million VND per month - 35%;
- the personal income tax rate for non-residents is 20% of the wages.
Pension Insurance - 32% of the wages of Vietnamese employees.
From January, 1st 2022, the Social Insurance charges for foreign workers will be 30% of monthly salary.
The minimum salary rate for foreigners depends on the province. If we talk about Hanoi, for example, it is 9 000 000 VND (390 USD). Let's calculate, the monthly charge is 2 700 000 VND (117 USD) per month and for 24 months (the period of validity of the work permit) it will be charged 64 800 000 VND (2 808 USD).
However, due to the fact that foreign workers will not be able to use some Social benefits (for example, pension contributions), there is a decision to return part of the funds after the end of the work permit. The Social Insurance Authority returns 4 salaries (9 000 000 * 4), that is 36 000 000 VND (1 565 USD) within 3 months from the date the work permit expires.
In fact, the non-refundable Social Insurance charge will be 28 800 000 VND (1 252 USD) for 24 months or 1 200 000 VND (52 USD) per month. Please note that this amount includes the employee's medical insurance.
Under the law of exercise tax on the consumption of goods and services, the following goods and services are subject to an increased tax rate from 30% to 75% of net income:
a) Cigarettes, cigars and other tobacco products used for smoking, inhaling, chewing, smelling and sucking;
b) Alcohol of all kinds;
c) Beer of all sorts;
d) Cars with less than 24 seats, including passenger and cargo transportation with two or more seats, and have a fixed partition between the cabin and the cargo compartment;
e) Two-wheeled or three-wheeled motorcycles with a cylinder capacity of more than 125 cm3;
f) Aircraft, yachts;
g) Petrol of all types, reformat component and other preparations for gasoline mixing;
h) Air conditioners with a capacity of 90,000 BTU or more;
i) Playing cards;
j) Gold, precious stones;
k) Goods for commemoration, carrying out memorial rituals.
a) Organization and holding of discos;
b) Massage, karaoke;
c) Casino, Electronic games, including jackpots, slots and similar machines;
d) Trading on rates;
e) Golf, including the sale of membership cards, golf tickets;
f) Lottery business.
To clarify the tax rate, ask for detailed advice to our specialists.
Land tax is an annual progressive tax levied on land users who have the right to use land for residential purposes or for construction work, which means land tax for non-agricultural purposes. The first payment is to be made no later than April 30. The second payment is to be made no later than October 31 of the year.
The annual land use tax is calculated as: (Area of taxable land) x (price of 1 m2 of land, according to cadastral value) x (tax rate).
Land tax rates are determined by the People's Committee of the province (from 0.1% to 3%).