Accounting and tax compliance in Vietnam

The standard corporate income tax rate in Vietnam is 20% of taxable profit. Certain encouraged sectors and locations qualify for preferential rates or holidays, while oil, gas and some natural resource activities are taxed at higher rates.

• Taxable income equals revenue less deductible expenses, plus other taxable income.
• Quarterly CIT prepayments are due by the 30th day after each quarter ends.
• Prepayments must cover at least 80% of the final annual liability to avoid late-payment interest.
• The annual CIT finalisation return is due within 90 days of the financial year end.
• Expenses must be properly invoiced, business-related and paid by bank transfer above the cash threshold to be deductible.

VAT applies to most goods and services supplied in Vietnam. The standard rate is 10%, with a reduced 5% rate for essential goods and services and a 0% rate for exports. Certain supplies are exempt entirely.

• Registration happens as part of the tax code registration when the entity is established.
• The credit method applies to most enterprises: output VAT less creditable input VAT.
• Monthly filing is required where prior-year revenue exceeds VND 50 billion; smaller enterprises may file quarterly.
• Monthly returns are due by the 20th of the following month; quarterly returns by the last day of the following month.
• Valid VAT invoices and e-invoice compliance are essential for input credit.

Payments to foreign entities without a permanent establishment in Vietnam attract foreign contractor tax, a combination of a VAT component and a CIT component withheld by the Vietnamese payer.

• Interest: 5% CIT component.
• Royalties and licence fees: 10% CIT component.
• Services: typically 5% CIT plus 5% VAT.
• Goods supplied with associated services in Vietnam: 1% CIT on the goods element.
• Construction and installation: 2% CIT, with VAT depending on scope.
• Double tax treaties may reduce or eliminate the CIT component where relief is claimed correctly.

Statutory books must be maintained under VAS rather than IFRS. Groups reporting under IFRS typically keep VAS statutory records and prepare a separate reporting conversion.

• Accounting records must be kept in Vietnamese dong, with a functional currency election possible in limited cases.
• Records must be in the Vietnamese language, or bilingual.
• The uniform chart of accounts prescribed by the Ministry of Finance applies.
• A chief accountant with the required qualification must be appointed.
• Accounting records must be retained for at least ten years.

A complete annual statutory set under VAS comprises:

• Balance sheet.
• Income statement.
• Cash flow statement.
• Notes to the financial statements.
• Audited statements filed with the tax authority, licensing body and statistics office within 90 days of year end.

An independent annual audit is mandatory for all foreign-invested enterprises, credit institutions, insurers and public interest entities, regardless of size.

• The audit must be performed by an audit firm licensed to practise in Vietnam.
• The audit covers the VAS statutory financial statements.
• The audited statements must be issued in time for the 90-day filing deadline.
• Audit fieldwork usually starts in January or February for a calendar year end.

Vietnam has detailed related-party transaction rules requiring arm's-length pricing and contemporaneous documentation.

• A related-party disclosure form is filed with the annual CIT return.
• Local file, master file and country-by-country report are required unless an exemption applies.
• Documentation must be in place before the CIT return is filed.
• Net interest expense deductibility is capped at 30% of EBITDA.
• Penalties and profit adjustments apply where pricing cannot be supported.

• Monthly: VAT and personal income tax returns by the 20th of the following month.
• Quarterly: VAT and PIT returns by the last day of the following month, where quarterly filing applies.
• Quarterly: CIT prepayment by the 30th day after quarter end.
• Annually: CIT finalisation, PIT finalisation and audited financial statements within 90 days of year end.
• Annually: business licence fee declaration and payment early in the year.

• Keeping only group IFRS books and no compliant VAS ledger.
• Missing the 80% quarterly CIT prepayment threshold and incurring interest.
• Losing expense deductions because invoices or bank payment evidence are missing.
• Overlooking foreign contractor tax on payments to head office or overseas suppliers.
• Appointing the statutory auditor too late to meet the 90-day deadline.
• Preparing transfer pricing documentation only after a tax audit begins.
• Assuming quarterly VAT filing applies when revenue has crossed the monthly threshold.

A local partner maintains your VAS ledger, meets every filing deadline, coordinates the statutory audit and delivers reporting your head office can actually read — without you hiring a chief accountant or building an in-country finance team.