Legal Setup & Registration
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20 min
Taxes, Accounting & Compliance
What taxes your company owes, how Vietnamese accounting works, and how to stay out of trouble with the tax authorities.
Taxes, Accounting & Compliance
Vietnam's tax system is manageable once you understand the basics. Here are the main taxes a foreign-owned SME will deal with.
Corporate Income Tax (CIT)
- Standard rate: 20% on net profit
- Some sectors (manufacturing, high-tech) benefit from reduced rates (10–15%) for 2–4 years
- CIT returns filed quarterly + annual declaration
Value Added Tax (VAT)
- Standard rate: 10% (reduced rate of 5% for essential goods)
- If your annual revenue exceeds VND 1 billion (~$40k), VAT registration is mandatory
- VAT returns filed monthly or quarterly
- You can reclaim input VAT on business expenses — keep all VAT invoices (hóa đơn đỏ)
Personal Income Tax (PIT) for Employees
- Progressive rates from 5% to 35% for residents
- Non-residents: flat 20% on Vietnam-sourced income
- You withhold and remit PIT on behalf of employees monthly
Social Insurance
| Contribution | Employer | Employee |
|---|---|---|
| Social insurance | 17.5% | 8% |
| Health insurance | 3% | 1.5% |
| Unemployment insurance | 1% | 1% |
| Total | ~21.5% | ~10.5% |
Accounting Requirements
Vietnamese accounting follows the Vietnamese Accounting Standards (VAS), not IFRS. You must:
- Maintain books in Vietnamese dong (VND)
- Issue official invoices (hóa đơn điện tử — e-invoices, mandatory since 2022)
- File financial statements annually
- Have accounts audited if revenue or capital exceeds certain thresholds
Practical advice: Hire a local accounting firm from day one. Monthly accounting fees for a small company run $150–$400/month and are worth every dollar. Do not try to manage Vietnamese tax compliance yourself unless you are an accountant fluent in Vietnamese tax law.