Vietnam Tax Guide for Foreign Investors 2026

Vietnam's standard Corporate Income Tax (CIT) rate is 20 percent of taxable profit; however, since the 2025 tax year, companies with annual revenue not exceeding VND 3 billion pay 15 percent, and companies with revenue between VND 3 and 50 billion pay 17 percent. Companies in special economic zones and high-tech sectors can also qualify for a reduced 10 percent rate for up to 15 years on new investment projects. Value Added Tax (VAT) is normally 0, 5, or 10 percent depending on the goods or service, with the 10 percent rate temporarily reduced to 8 percent for most goods and services from 1 July 2025 through 31 December 2026. Personal Income Tax for residents is progressive with a top rate of 35 percent, while non-resident foreign employees pay a flat 20 percent.

Why the Vietnam Tax System is Important for Foreign Investors

Vietnam has developed into an attractive investment destination in Southeast Asia in recent years. With stable economic growth, a young population, and an increasingly open trade policy, the country is attracting more and more foreign companies. However, anyone who wants to invest successfully in Vietnam must understand the local Vietnam tax law precisely – because mistakes can be costly.

This comprehensive guide explains the most important types of taxes, current regulations for 2026, and provides practical tips on how foreign investors can optimize their tax burden legally.

Corporate Income Tax Vietnam: Basics and Current Rates

The Corporate Income Tax Vietnam (Corporate Income Tax, CIT) is the most important tax for companies operating in Vietnam. The standard tax rate is 20 percent of taxable profit (Article 10(1), Law No. 67/2025/QH15). However, higher rates of up to 50 percent may apply to certain industries, such as oil and gas extraction; conversely, companies with lower revenue benefit from a reduced rate under the rule described below.

Revenue-Based Rates for Smaller Companies

Since the 2025 tax year, Article 10 of Corporate Income Tax Law No. 67/2025/QH15 (in effect since 1 October 2025) sets out two reduced rates below the standard rate, tiered by the company's annual revenue:

• 15 percent for companies with annual revenue not exceeding VND 3 billion (Article 10(2))
• 17 percent for companies with annual revenue above VND 3 billion up to VND 50 billion (Article 10(3))

The relevant revenue is the total revenue of the immediately preceding tax period; under Article 11(4) of Implementing Decree No. 320/2025/ND-CP dated 15 December 2025, this specifically means revenue from sales and services (before revenue deductions) plus financial income and other income, as shown in the business-results appendix to the prior year's tax finalization return.

For companies newly established during the current tax period that do not yet have a preceding tax period, the company estimates its projected revenue for the current tax period itself in order to determine the quarterly provisional tax payments at the corresponding 15 or 17 percent rate. If actual year-end revenue matches the projection, the company files and finalizes its tax return at that rate as normal; if actual revenue does not meet the conditions for the provisionally applied rate, resulting in an underpayment, the company must pay the shortfall plus late-payment interest under the tax administration regulations (Article 11(4)(b), Decree No. 320/2025/ND-CP).

Where a company's immediately preceding tax period was shorter than 12 months — for example due to new establishment, conversion, merger, or division/split occurring during that year — the relevant total revenue is annualized: actual revenue for that period is divided by the number of months the company actually operated and multiplied by 12; a month in which operations began, even partially, counts as a full month (Article 11(4)(a), Decree No. 320/2025/ND-CP).

These two rates do not apply to certain income and cases (Article 18(3), (4), Law No. 67/2025/QH15): income from the transfer of capital, real estate (except investment in social housing), or investment projects; income from oil and gas extraction and the mining of other precious resources; income from online gaming operations and from goods and services subject to special consumption tax (except for certain projects such as automobile manufacturing and assembly); and companies that are subsidiaries of, or related to, another company that does not itself meet the above revenue conditions.

This mechanism must be kept clearly distinct from the 17 percent preferential rate for 10 years described further below: the revenue-based rate applies to any qualifying small company regardless of sector or location, is reassessed every year based on the prior year's revenue, and carries no exemption period. The preferential rate under Articles 13 and 14, by contrast, applies only to new investment projects in specific sectors or locations, is fixed for 10 years, and comes with its own exemption/reduction schedule.

Tax Incentives for Foreign Investors

Vietnam offers attractive tax incentives to promote foreign direct investment. Since 1 October 2025, the Corporate Income Tax Law No. 67/2025/QH15 applies (effective from the 2025 tax year onward), detailed by Implementing Decree No. 320/2025/ND-CP dated 15 December 2025. Article 13 of the Law sets out two main preferential tiers, each linked to its own tax exemption/reduction period under Article 14:

• 10 percent preferential CIT rate for 15 years: applies to new investment projects in high-technology application, software and semiconductor manufacturing, supporting industries, renewable energy, and especially important technical infrastructure, to high-tech enterprises, high-tech agriculture enterprises, and science-and-technology enterprises, to projects with a minimum investment capital of VND 12,000 billion, as well as to new investment projects in locations with particularly difficult socio-economic conditions, in high-tech zones, high-tech agriculture zones, and concentrated digital technology zones, or in economic zones situated within tax-incentivized locations. Combined with a tax exemption of up to 4 years and a 50 percent tax reduction for the following up to 9 years (Article 13(1), Article 14(1)(a), Law No. 67/2025/QH15)
• 17 percent preferential CIT rate for 10 years: applies to new investment projects in high-grade steel production, energy-saving products, automobile manufacturing and assembly, and infrastructure supporting small and medium enterprises, as well as to new investment projects in locations with difficult (but not particularly difficult) socio-economic conditions, or in economic zones outside tax-incentivized locations. Combined with a tax exemption of up to 2 years and a 50 percent tax reduction for the following up to 4 years (Article 13(4), Article 14(2), Law No. 67/2025/QH15) It is essential to note that these incentives are subject to specific conditions, are regularly reviewed, and that projects approved before the law took effect may continue under a transitional rule for their remaining incentive period. Professional tax advice is therefore indispensable.

In addition, since fiscal year 2024, constituent entities of multinational enterprise groups whose ultimate parent company reports consolidated revenue of EUR 750 million or more in at least 2 of the 4 preceding fiscal years are subject to an additional corporate income tax under Vietnam's global minimum tax rules, with a minimum effective rate of 15 percent (Resolution No. 107/2023/QH15; Implementing Decree No. 236/2025/ND-CP, in effect since 15 October 2025). This revenue threshold is far above the scale of most foreign small and medium-sized investors covered by this guide, so in practice it only affects large corporate groups.

Value Added Tax Vietnam: What Companies Need to Know

The Value Added Tax Vietnam (Value Added Tax, VAT) is levied on most goods and services. There are three tax rates:

• 0 percent: Applies to exports, international transport services, and certain other services
• 5 percent: Applies to essential goods such as food, water, medical products, and educational services
• 10 percent: Standard rate for all other goods and services

From 1 July 2025 to 31 December 2026, under Resolution No. 204/2025/QH15 (Articles 1 and 2), the 10 percent rate is reduced by 2 percentage points to 8 percent for the goods and service groups subject to the 10 percent rate under Article 9(3) of VAT Law No. 48/2024/QH15. This reduction does not apply to telecommunications, financial services, banking, securities, insurance, real estate business, metal products, mining products (except coal), or goods and services subject to special consumption tax (except fuel) – these remain at 10 percent. After 31 December 2026, the rate reverts to 10 percent unless the National Assembly extends the reduction.

Foreign companies that provide VAT-liable services in Vietnam must register for VAT. The pre-registrations are usually made monthly or quarterly, depending on the company's turnover volume.

Special Features for Cross-Border Services

Since 2022, foreign providers of digital services – such as streaming platforms or software-as-a-service providers – must register and pay Value Added Tax Vietnam directly with the Ministry of Finance. This also applies to companies without a physical presence in the country.

Personal Income Tax Vietnam for Foreign Employees and Expatriates

The Personal Income Tax Vietnam (Personal Income Tax, PIT) affects both Vietnamese and foreign employees. The tax system distinguishes between resident and non-resident taxpayers:

Tax Residency in Vietnam

A person is considered a tax resident in Vietnam if they meet either of the following conditions (Article 2(2), Law No. 109/2025/QH15):

• are present in Vietnam for 183 days or more within a calendar year, or for 12 consecutive months counted from the first day of presence in Vietnam,
• have a regular place of residence in Vietnam, which includes both a registered permanent residence and housing rented in Vietnam under a fixed-term lease contract. Tax residents are subject to progressive tax rates on their worldwide income. Since 1 July 2026, under Article 9, Law No. 109/2025/QH15, the progressive schedule has five brackets instead of the previous seven, and it applies to taxable income — that is, employment income after deducting the family circumstance allowance, mandatory insurance contributions, and the other deductions under Article 8(2) — not gross income before deductions:

Non-resident foreign employees, on the other hand, pay a flat tax rate of 20 percent on the total wages and remuneration received for work performed in Vietnam, regardless of where the income is paid and regardless of the income level (Article 21, Law No. 109/2025/QH15).

Allowances and Deductions

Tax residents can claim the following allowances:

• Personal allowance: 15.5 million VND per month (since 1 July 2026, Article 10(1)(a), Law No. 109/2025/QH15)
• Allowance for dependents: 6.2 million VND per person and month (since 1 July 2026, Article 10(1)(b))
• Mandatory contributions to social insurance, health insurance, and unemployment insurance (deducted when determining taxable income, Article 8(2))

Other Relevant Taxes in Vietnam

In addition to the main types of taxes mentioned, there are other taxes in Vietnam that may be relevant to foreign investors:

Withholding Tax

A withholding tax is levied on payments to foreign companies without a permanent establishment in Vietnam. This so-called Foreign Contractor Tax (FCT) consists of a CIT component and a VAT component. The exact rates depend strongly on the type of service and should be reviewed on a case-by-case basis with a tax advisor.

Property Tax and Real Estate Transfer Tax

When an individual sells real estate in Vietnam, a tax of two percent of the contractual transfer price applies, which is generally owed by the seller; if the seller is a company, the gain is instead subject to the regular corporate income tax. In addition, annual property taxes are incurred, the amount of which depends on the type of use and location.

Import Duties and Special Consumption Tax

Import duties apply to imported goods, which vary depending on the product category and country of origin. Through Vietnam's membership in numerous free trade agreements – including the EVFTA with the EU and the CPTPP – many importers benefit from reduced or abolished duties.

Double Taxation Agreements: Protection for Foreign Investors

Vietnam has concluded double taxation agreements (DTA) with over 80 countries, including Germany, Austria, and Switzerland. These agreements prevent the same income from being fully taxed in both countries and provide foreign investors with important planning security.

Those who want to claim a DTA must usually provide a certificate of residence from their home country and comply with certain procedural rules. The application for treaty benefits should therefore be made early and with expert support.

Tax Compliance in Vietnam: Deadlines and Obligations

Compliance with tax reporting obligations is particularly important in Vietnam, as violations can be punished with severe fines and interest. The most important deadlines at a glance:

• Monthly VAT pre-registration: By the 20th of the following month (for companies with an annual turnover of over 50 billion VND)
• Quarterly VAT pre-registration: By the last day of the first month of the following quarter
• Annual CIT declaration: By March 31st of the following year
• Annual PIT declaration: By April 30th of the following year

Conclusion: Professional Tax Advice as the Key to Success

The Vietnam tax system offers foreign investors attractive incentives and benefits on the one hand, but on the other hand, it poses a real challenge due to its complexity and frequent changes. Anyone who wants to invest in Vietnam should familiarize themselves with the local tax laws early on and rely on experienced advisors.

At MaiVN Consulting, we support foreign companies and investors with all tax-related questions around Vietnam – from company formation to ongoing compliance to tax optimization. Contact us today for a non-binding initial consultation and start your Vietnam engagement on the safe side.