A different perspective on Vietnam’s economy and doing business in Vietnam. Make sure to  subscribe.

how to guides

cheat sheets


Tax in Vietnam 2024: Quick Read

This article is sponsored by: your accounting firm here→learn more

There are a number of taxes that foreign business owners in Vietnam should be aware of. Most prominent among them are Vietnam’s Personal Income Tax, Corporate Income Tax, Value Added Tax, and Special Consumption Tax. A basic understanding of these taxes can make dealing with local accountants and tax professionals much easier.

With this in mind, this article runs through what each of these taxes are, what they apply to, and the key elements that apply to foreign business persons.

Vietnam Accounting System

Firstly, it should be clear that Vietnam operates on its own accounting system known as the Vietnam Accounting System or VAS. This is as opposed to the International Financial Reporting Standards or IFRS.

The main difference between these two accounting systems is that IFRS is a principles-based system of accounting whereas VAS demands specific processes and procedures are followed. For example, in Vientam firms need to use  set templates for financial reporting whereas IFRS allows for firms to create their own templates based on their particular needs.

Furthermore, there are a number of IFRS and IAS (International Accounting Stadards) that have no VAS equivalent. For example, ‘financial reporting in hyperinflationary economies’ or ‘disclosure of interests in other entities’.

That said, Vietnam is slowly progressing toward IFRS. In 2020, the Minsitry of Finance issued Decision 345/QD-BT outlining a roadmap to brining local accounting inline with the international system. The two phases of the plan have IFRS voluntary up to 2025 but mandatory thereafter. It’s not clear how likely it is that this deadline will be met.

Chief Accountant in Vietnam

Firms in Vietnam are required to have a Chief Accountant. The Chief Accountant signs a firm’s financial statements and is responsible for liaising with the tax authorities. Note, however, that small firms can generally get away with having an Acting Chief Accountant for the first twelve months while they get someone more permanent sorted.

It may be tempting to try and fulfill the role of Chief Accountant with a foreign tax agent, however, Vietnam tax law can be quite nuanced and complex, and navigating Vietnam’s bureaucracy is much easier with a native Vietnamese speaker. In this light, it is generally better to hire a local. Most market entry consultancies will provide this service for a free. 

Value-Added Tax in Vietnam


Vietnam’s Value Added Tax or VAT is an indirect tax applied to most goods at the point of purchase in Vietnam. It is outlined in the Law on Value Added Tax which was first passed in 2008 but has been subsequently amended several times. This information is pulled from the aforementioned law and Circular 219 that was issued at the end of 2013.

What does it apply to?

Vietnam’s VAT applies to almost all goods and services bought or sold in Vietnam. 

Tax rate

It is currently set at 10 percent, however, there are some exceptions.

Of note, the VAT is currently, but only temporarily, 8 percent. Reducing the VAT was an initiative taken to stimulate the economy during the COVID-19 pandemic, however, it has been extended repeatedly. As of writing, it was due to end on June 30, 2024, however, there is legislation currently before Vietnam’s National Assembly that would see the reduction extended to the end of the year if approved.

There are also a number of items that are subjected to a VAT of just 5 percent. These items are mostly agricultural. There is a detailed list here: Value Added Tax in Vietnam 2024.

Personal Income Tax in Vietnam

Personal Income Tax in Vietnam–locally known as the PIT–is the tax applied to income earned within Vietnam. It is codified in the Law on Personal Income Tax legislated in 2007. This includes income earned on wages or returns from local investments and depending on the situation possibly income generated overseas.

Who does it apply to?

A tax resident for PIT purposes is a person that has been in Vietnam for 183 days or more in one calendar year; or that has a permanent residence in Vietnam either a property that they own or that the lease with a rental agreement.

This distinction is important in that non-resident taxpayers are subject to a flat 20 percent tax on their wages or salaries whereas resident taxpayers are taxed progressively.

Tax rates

Income tax rates are progressive. The more an employee earns the more tax they pay.

Progressive income tax rates, Vietnam, VND millions

1Up to 60Up to 55
2Between over 60 and 120Between over 5 and 1010
3Between over 120 and 216Between over 10 and 1815
4Between over 216 and 384Between over 18 and 3220
5Between over 384 and 624Between over 32 and 5225
6Between over 624 and 960Between over 52 and 8030
7Over 960Over 8035

For more details see: Personal Income Tax in Vietnam 2024.

Special Consumption Tax in Vietnam

Vietnam’s Special Consumption Tax–or SCT–though sometimes called an excise tax or Special Sales Tax is an indirect tax on luxury goods or goods that are harmful to people or the environment. For example, cigarettes or alcohol. It is used to regulate the use of these goods and generate revenue for the government.

What does it apply to?

Vietnam’s Special Consumption Tax applies to:

  • Cigarettes, cigars and other tobacco products
  • Liquor
  • Beer
  • Cars and trucks
  • Motorcycles with a cylinder capacity of over 125 cm3
  • Aircraft 
  • Yachts
  • Gasoline
  • Gambling
  • Golf, and
  • The lottery

Tax rates

The percentage of special consumption tax that applies will depend on the item. For cars the amount is determined by the cylinder size and the fuel source–for example, the SCT on electric vehicles is lower than it is on petrol-powered vehicles. There is a detailed table here: Special Consumption Tax in Vietnam 2024.

Corporate Income Tax in Vietnam

Vietnam’s Corporate Income Tax–or CIT–is the tax applied to the profits of corporations operating in Vietnam. The details of this tax are outlined in the Law on Corporate Income Tax approved in January of 2023.

What does it apply to?

Any corporate income earned in Vietnam.

Tax rates

The standard corporate income tax rate in Vietnam is 20 percent per Article 10 of the Law on Corporate Income Tax, however, there are exceptions.

Firstly, the corporate income tax rate applicable to petroleum operations can range from 25 percent to 50 percent which will depend on what is negotiated when the project is approved. Similarly, the exploration and extraction of other natural resources can attract CIT rates of anywhere between 32 and 50 percent. This is set on a case-by-case basis.

Also of note, however, is that tax incentives in the form of a reduction in the corporate income tax rate for new businesses, are also common and can reduce a firm’s income tax liability considerably. For details see: Corporate Income Tax in Vietnam 2024.

What’s next?

There are a number of taxes that foreign firms operating in Vietnam should be aware of. These four impact most firms, however, there are also a number of industry-specific taxes. With this in mind, foreign firms should make sure to get good quality, solid advice from a consummate tax professional: Let us connect you with an expert.

It’s also worth noting that tax law can change from time to time and with this in mind foreign firms in Vietnam can best keep abreast of tax developments by subscribing to the-shiv.

Last updated

June 4, 2024: Added sections on VAS and Chief Accountants


get connected with an expert
contribute a guest post
send a letter to the editor
submit a press release

latest news

Vietnam-US Trade Tracker: May 2024 Update [data set]

The United States is the biggest buyer of Vietnam’s exports and together the two countries engage in over US$100 billion worth of trade each year. This tracker looks at what is imported from the US and exported to the US from Vietnam using the most recent data available.

Read More »

Proposal to increase foreign ownership limits in airlines in Vietnam rejected

The Vietnam airline industry has been struggling broadly as a result of government regulated ticket prices, increasing fuel costs, and a debt hangover from the COVID-19 pandemic when the industry more-or-less ground to a halt. Bamboo Airways, in particular, only took to the skies in 2019 the year before the pandemic broke out. It also started life as a subsidiary of FLC Group which has been heavily mired in controversy after its leader was arrested back in 2022. This saw the airline spun off but the new independent entity has never had much success and has repeatedly downsized its fleet and the number of routes it offers…

Read More »

Adidas, New Balance suppliers struggling to find workers in southern Vietnam

Some of the challenges raised in this article, with respect to hiring workers, is that workers have more job options other than factory work, workers no longer need to move to population centres with many manufacturing operations opening in tier two cities and provinces, and workers that moved back to their hometowns during the COVID-19 pandemic have still not returned on the back of the general uncertainty that the pandemic created.

Read More »

Korea’s Daewoo looking at making cars in Vietnam

Vietnam’s automotive industry is huge but dominated by motorcycles. That said, cars are becoming more popular with just shy of 5 million registered vehicles at the end of 2020. This does, however, represent just 5 percent of the population of 100 million people which means there is plenty of room for car sales to grow…

Read More »

Russian president could be in Vietnam next week: Reuters

Vietnam has remained cordially with Russia throughout the Ukraine War. The Southeast Asian nation is heavily dependent on Russia for its arms supplies but also has a strong bond with the country on account of their similar political pasts. This has seen Russian tourist arrivals grow by 80 percent in the first five months of this year over the first five months of 2023 and…

Read More »

advertising enquiry

submit a press release

Note that it will be marked as a press release/sponsored post.

guest post

We publish guest posts of 800 to 1000 words from experts who have something unique to say on topics relevant to our audience. 

get connected with an expert

letters to the editor

We review letters for quality and authority and generally only publish views that add to the discussion from experts in their field.