Trang tiếng Việt
Taxation

Vietnam's business fiscal year is from January 1 thru December 31 of the solar calendar.

Basic taxes cover:
- Import-export tax
- Business income tax

- Value added tax

- Special sales tax

- Personal income tax

 

4.2.1 Import-export tax

a. Export tax

Exports are promoted in Vietnam. Therefore taxes are only levied on certain commodities, mainly natural resources such as minerals and forest products. Export taxes range from 0 to 45%.

 

b. Import tax

Almost every import product is subject to tax. Consumer products and luxury goods are highly taxed while machinery, equipment, raw materials, and capital goods for industrial production locally unavailable benefit from low taxes or even tax exemption.

 

Tax rates applicable to import goods include 3 categories:

- Preferential tax rates are applicable to import goods originating from countries, groups of countries or territories, which apply the most favored nation treatment in their trade relations with Vietnam;

 

- Special preferential tax rates are applicable to import goods originating from countries, groups of countries or territories, which apply special preferences on import tax to Vietnam. Currently it is mainly applicable to Asean nations under common preferential tariffs (CEPT).

+ASEAN Free Trade Area (AFTA) with Common Effective Preferential Trading Tariff - CEPT: Vietnam committed to cancelling import duties applicable to goods in the non-exclusive list in 2015; gradually move goods from temporarily exclusive, sensitive and highly sensitive lists to the non-exclusive one (on 1/1/2013). AFTA does not apply tax reduction and exemption policies to goods on the common exclusive list.

+ASEAN-China Free Trade Area with the ASEAN-China Free Trade Agreement: Import duties applicable to goods from China to Vietnam and vice versa will gradually reduce. Import duties applicable to normal goods will be almost cancelled in 2015. Import duties applicable to sensitive goods will reduce to 0-5% in 2020. Import duties applicable to highly sensitive goods will not exceed 18% in 2018.

 

- Normal tax rates are applicable to import goods originating from countries, groups of countries or territories, which do not apply the most favored nation treatment or special preferences on import tax to Vietnam. The ordinary tax rates shall not be 70% higher than the preferential tax rates of the same goods items specified by the Government.

 

c. Objects not liable to tax

Goods in the following cases shall not be liable for import tax or export tax:

- Goods in transit or being transported across Vietnam's borders; goods transferred through borders as provided for by the Government;

-  Humanitarian aid, non-refundable aid;

- Goods exported from non-tariff zones to foreign countries, goods imported from foreign countries into non-tariff zones for use in non-tariff zones only, and goods transported from one non-tariff zone to another; and

- Goods being petroleum portions paid to the State in value as natural resource tax when exported.

 

d. Tax exemption

Import goods or export goods shall be exempt from import tax or export tax in the following cases:

- Goods temporarily imported for re-export or temporarily exported for re-import for participation in exhibitions, trade fairs or goods' display; machinery, equipment and working devices temporarily imported for re-export or temporarily exported for re-import in service of work within a certain time period;

 

- Goods being movable assets according to the Government's regulations;

 

- Import and export goods of Vietnam-based foreign organizations or individuals entitled to diplomatic privileges or immunities within the norms prescribed by the Government in accordance with treaties to which the Socialist Republic of Vietnam is a contracting party;

 

- Goods imported for processing for foreign partners then exported or goods exported to foreign countries for processing for Vietnam then re-imported under processing contracts;

 

- Import and export goods within the duty-free luggage quotas of persons on entry or exit under the Government's regulations;

 

- Goods imported to create fixed assets of projects entitled to investment incentives or investment projects funded with official development assistance (ODA) capital sources;

 

- Goods imported in service of petroleum activities;

 

- Goods imported for direct use in activities of scientific research and technological development, including machinery, equipment, spare parts, supplies and means of transport, which cannot be produced at home, technologies which cannot be created at home; scientific documents, books and newspapers;

 

- Raw materials, supplies and accessories imported for production activities of  investment projects on the list of domains where investment is particularly encouraged or the list of geographical areas meeting with exceptional socio-economic difficulties shall be exempt from import tax for five years after the commencement of production;

 

- Goods produced, processed, recycled or assembled in non-tariff zones without the use of raw materials and accessories imported from foreign countries, when being imported into the domestic market; for cases of using raw materials and accessories imported from foreign countries, when goods are imported into the domestic market, only import tax on imported raw materials and supplies constituting these goods must be paid; and

 

- Other specific cases decided by the Prime Minister.

 

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4.2.2 Business income tax

The Law on Business Income Tax sets forth that as of 1/1/2009 the business income tax is 25%. In particular, businesses in exploration, exploitation of oil, gas and other high-value rare natural resources pay 32-50% of their revenue on a case-by-case basis.

 

The law also provides for preferential tax to preferential investment projects at 20%, 15%, and 10% rates over 10 and 15 year periods from the date of business operation.

 

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4.2.3 Value added tax (VAT)

Goods and services used for the purposes of production, business and consumption in Vietnam shall be subject to value added tax, except as provided for in the Law on Value Added Tax.

 

Goods and services subject to VAT are charged at three rates: 0%, 5%, and 10% depending on their categories.

Some goods and services shall not be subject to value added tax as follows:

- Products of cultivation, husbandry and aquaculture or fishing which have not yet been processed into other products or which have only been semi-processed by businesses or individuals producing, catching, selling products and at the import stage;

- Machinery, equipment, materials or means of transportation yet able to be produced domestically and are imported to serve directly for science research and technology development activities;

-       Goods to be imported for the purposes of humanitarian and non-refundable aid to Vietnam; gifts given to state bodies, political organizations, socio-political organizations, social organizations, socio-professional organizations; donations and gifts given to individuals in Vietnam; possessions of foreign organizations and individuals under diplomatic immunity regulations;  and hand luggage within tax-free limits; and

- Goods in transit or transhipment or crossing Vietnamese borders; goods temporarily imported to be re-exported; goods temporarily exported and re-imported; and supplies or materials imported for producing or processing export goods under contracts made with foreign partners.

 

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4.2.4 Special sales tax

Goods and services subject to special sales taxes include:

* Goods: Cigarettes, cigars; beer, alcohol; automobiles (less than 24 seats); assorted types of petrol, naphtha, reformate components, and other components used to mix in petrol; air-conditioners of 90,000 BTU or less; and playing cards and votive paper.

 

* Services: Operating dance-halls, massage lounges, karaoke parlors; casinos, offering jackpot games; betting entertainment; golf operation businesses; and the lottery business.

 

Special sales taxes range from 10-75%.

 

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4.2.5 Personal income tax

All residents and non-residents in Vietnam are subject to income tax. Under the Law on Personal Income Tax and Decree No.100/2008/ND-CP, which go into effect January 1, 2009, personal income taxpayers include residents who earn taxable incomes specified in this Law inside and outside the Vietnamese territory and non-residents who earn taxable incomes specified in this Law inside the territory.

 

Resident means a person who satisfies one of the following conditions:
+ Being present in Vietnam for 183 days or more in a calendar the Vietnamese year or 12 consecutive months counting from the first date of their presence in Vietnam; and
+ Having a place of habitual residence in Vietnam, which is a registered place of permanent residence or a rented house for dwelling in Vietnam under a term rent contract.

 

Partially progressive tariff

The partially progressive tariff applies to taxed incomes from business, salary or wages is the total of taxable incomes specified in the Law minus premiums of social insurance, health insurance and professional liability insurance for some professions and jobs subject to compulsory insurance and reductions specified in the Law. The minimum monthly law income subject to the tax is VND4 million (US$250).

 

The partially progressive tariff is specified below:

Tax level

Taxable income/year
(VND mill.

Taxable income/month
(VND mill.)

Tax rate (%)

1

Up to 60

Up to 5

5

2

Over 60 to 120

Over 5 to 10

10

3

Over 120 to 216

Over 10 to 18

15

4

Over 216 to 384

Over 18 to 32

20

5

Over 384 to 624

Over 32 to 52

25

6

Over 624 to 960

Over 52 to 80

30

7

Over 960

Over 80

35

 

Whole income tariff

The whole income tariff applies to taxed incomes from capital investment, capital transfer, real estate transfer, won prizes, copyright royalties, commercial franchising, inheritances or gifts are taxable income specified in the Law.

The whole income tariff is specified below:

 

Taxable incomes

Tax rate (%)

a/ Incomes from capital investment

5

b/ Incomes from copyright, commercial franchising

5

c/ Incomes from prizes

10

d/ Incomes from inheritances, gifts

10

e/ Incomes from capital transfer are determined to be equal to the selling price minus the buying price and reasonable expenses related to the generation of income from capital transfer.

20

f/ Incomes from securities transfer if the buying price and expenses related to the securities transfer are unidentifiable, taxable income is determined to be the selling price of securities.

0.1

g/ Incomes from real estate transfer is determined to be equal to the real estate transfer price upon the transfer minus the real estate buying price and related expenses.

25

h/ Incomes from real estate transfer if the buying price and expenses related to the transfer of a real estate are unidentifiable; the taxable income is determined to be the real estate transfer price.

 

 

2

 

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