Accounting and legal

Accounting and tax

Tax planning and obligation in Vietnam

Tax rates

  1. The standard corporate income tax (CIT) rate is 20%, though enterprises operating in the oil and gas sectors will be subject to rates between 32% and 50%;
  2. Dividends paid by a Vietnamese company to its corporate shareholders will be completely tax exempt. Furthermore, no withholding tax will be imposed on dividends remitted to overseas corporate shareholders. For individual shareholders, the withholding tax will be 5%;
  3. Interest payments and royalties paid to non-residents individuals or corporate entities will be subject to withholding tax of 5% and 10% respectively;
  4. Personal income tax for residents is levied under a progressive system, ranging between 5% and 35%. However, for non-resident individuals, the tax is levied at a flat rate of 20%.

Tax filings

  1. Annual corporate income tax returns must be filed with the General Department of Taxation within 90 days from the end of the fiscal year. However, the company will be required to make quarterly income tax payments, based on estimates;
  2. Accounting records must be kept in the local currency, which is the Vietnamese Dong. They must also be written in Vietnamese, though they may be accompanied by a common foreign language such as English;
  3. A Vietnam-based auditing company must audit annual financial statements of foreign business entities. These statements must be filed with the licensing agency, the Ministry of Finance, the statistics office, and tax authorities 90 days before the end of the year;
  4. 4) For an active trading company, Healy Consultants accounting and tax fees of US$4,950 are an estimate of our fees to efficiently and effectively discharge your annual company accounting and tax obligations, excluding independent auditor’s fees. Following receipt of a set of draft accounting numbers from your company, Healy Consultants will more accurately advise accounting and audit and tax fees. For a dormant company, Healy Consultants annual accounting and tax fees are only US$950.

Miscellaneous Tax information

  1. In 2001, the Vietnamese MOF introduced a new accounting system, the Vietnamese Accounting Standards (VAS). While this system is based on the IFRS principles, there are several differences including i) VAS does not require disclosure of key judgements and assumptions ii) VAS requires analysis of changes in equity and iii) VAS does not allow estimation techniques such as standard costing;
  2. All Vietnamese companies are required to strictly adhere to the VAS when preparing their accounting records and financial statements. Any company wishing to deviate from these norms will be required to seek approval from the Ministry of Finance;
  3. Vietnamese companies can be carried forward their business losses for up to five years after the year in which the loss can occurred;
  4. 3) It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfil those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

  1. According to the Companies Act, a Vietnam company must have at least one director and one shareholder of any nationality;
  2. A private Vietnam company is required to maintain both a local registered address and a local resident company secretary. Before the Government approves company registration, the company must sign an office premises lease agreement;
  3. Foreign investors considering Vietnam company incorporation should note that all foreign-invested companies in the country must have their financial statements audited annually;
  4. Every company must lodge an annual return confirming relevant details of the company for the public register including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings. A company is exempt from this obligation if they have been no relevant accounting transactions in the financial year;
  5. Each time a change occurs in the particulars of the company or to its officers, the change must be lodged with the Vietnam companies registry;
  6. Not all sectors in Vietnam allow 100 per cent foreign ownership. Foreign ownership is restricted in the aviation, insurance, telecommunications and agricultural industries;
  7. Last year, the Vietnamese Government passed decree 60 to scrap the 49% foreign ownership rule for most listed companies. However, for certain industries, where i) the government has passed specific legislations capping foreign shareholding (banking) or ii) the government has signed international legislations to the same effect (agricultural and forestry services), the ownership cap will continue to remain in place.

Contact us

For additional information on our accounting and legal services in Vietnam, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Simon Guidecoq, directly:
client relationship officer - Simon