Foreign investors opening companies in Vietnam must get acquainted with the local legislation prior to starting their activities here. An important law related to the taxes that must be paid in Vietnam. The local taxation system is based on the income tax which applies at national level to both individuals and companies. In order to better distinguish between the taxes to be paid be natural and legal persons, the law provides for the personal income tax and the corporate tax in Vietnam.
Companies operating in Vietnam will be levied the corporate tax at various rates based on the calculation of their profits. Our Vietnam company formation agents can offer information on the taxation of companies operating here.
How is the corporate tax calculated in Vietnam?
The first and most important aspect to keep in mind related to the Vietnam corporate tax is the that there is no concept of tax residency in this country.
Companies in Vietnam will be levied the corporate tax based on the taxable profit which is calculated as the difference between the gross income earned at national and international level, the deductible expenses and other incomes. Vietnam companies are required to prepare corporate tax returns based on which the levies will be calculated.
Our company registration experts in Vietnam can assist foreign investors interested in opening companies in this country.
Corporate tax rates in Vietnam
There are several rates at which the corporate tax is levied in Vietnam, however the tax authorities impose a standard tax rate of 20%. The other rates are applicable to Vietnam companies operating in specific industries, such as oil and gas. The following corporate tax rates apply to these companies:
– rates between 32% and 50% are imposed to oil and gas companies, based on the projects and the location they operate in;
– rates between 40% and 50% apply to companies exploring and exploiting mineral resources, based on the location of the projects.
Certain companies benefit from preferential tax rates of 10%, 15% and 17%. Also, Vietnam does not impose capital duty or payroll taxes on companies.
Foreign investors can set up various types of companies in Vietnam, so please do not hesitate to contact us if you need assistance in registering a business here.