Vietnam taxes residents on worldwide income and non-residents on Vietnam-source income only. Vietnam operates a self-assessment system, with the General Department of Taxation conducting post-filing review and audit.
The Vietnamese tax year is the calendar year. The individual filing deadline is generally the last day of the fourth month following the end of the tax year (commonly late April/early May); corporate filing deadlines follow the company's own fiscal year-end.
Vietnam's headline corporate income tax (CIT) rate is 20%.
The headline personal income tax (PIT) rate is residents up to 35%; non-residents flat 20% (employment income).
The standard VAT/GST (or equivalent consumption tax) rate is 10%.
An individual is a Vietnamese tax resident if any one of the following applies: present in Vietnam for 183 days or more within a calendar year or within any consecutive 12-month period from the first day of arrival; registered permanent residence in Vietnam; or leased housing (including hotels) in Vietnam for 183 days or more in the tax year (unless proven resident of another country). Residents are taxed on worldwide income; non-residents face a flat 20% rate on Vietnam-source employment income only. A limited treaty-based exemption can apply to a non-resident present under 183 days whose employer is also non-Vietnamese, subject to additional conditions.
A non-Vietnamese entity has a Vietnam permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Vietnam on the entity's behalf, following the OECD Model Treaty definition as applied under Vietnamese domestic law and any applicable tax treaty.
Vietnam has no Controlled Foreign Company legislation.
Vietnam has no formal thin capitalization rules in its tax legislation, though the permitted level of debt funding is separately constrained by licensing requirements (capped at the difference between licensed investment capital and charter capital) and foreign-loan regulations. Under Decree 132, deductible interest on loans - particularly for related-party transactions - is capped at 30% of EBITDA; disallowed interest carries forward up to five years. Interest corresponding to a shortfall in charter capital, and interest deemed excessive under transfer pricing rules, is separately non-deductible.
Vietnam does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Vietnam does not have a comprehensive ATAD2-style anti-hybrid regime, and has recently issued Pillar Two-related legislation and guidance (effective 2024) that interacts with, but is distinct from, hybrid mismatch rules specifically.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Vietnam does not have a Controlled Foreign Company regime (see CFC section above) and does not provide a broad participation exemption for foreign dividends in the European sense; foreign-source dividends are generally includible in a Vietnamese company's taxable income, with relief from double taxation available through Vietnam's foreign tax credit system rather than an outright exemption.
Vietnam has a real foreign tax credit regime available to both individuals and companies for foreign tax paid on foreign-source income also taxed in Vietnam, capped at the Vietnamese tax otherwise due on that income.
Vietnam has signed double tax agreements with 81 countries (some not yet in force). Notably, the US and Vietnam signed an income tax treaty on July 7, 2015, which Vietnam ratified in 2017 - but the United States has not ratified it, so it remains not in force; there is currently no comprehensive US-Vietnam income tax treaty in effect. Vietnamese tax authorities apply a substance-over-form, anti-treaty-shopping approach when evaluating DTA claims.