Vietnam 2025: Tax liability calculation FDI Enterprises Need to Know

Vietnam continues to affirm its position as one of the most attractive investment destinations in Southeast Asia and the world. With a stable economic growth, a young and dynamic workforce, and an open-door policy to attract foreign direct investment (FDI), Vietnam offers many potential business opportunities for international enterprises.

However, to operate successfully and sustainably in Vietnam, FDI enterprises need to pay special attention to understanding and complying with the country’s Year-end tax filing process. In 2025, the Vietnamese tax system for FDI enterprises will continue to be maintained and have certain adjustments. This article will provide a comprehensive and updated guide on the main tax audit preparation that FDI enterprises need to understand to ensure legal compliance and optimize Corporate tax return submission obligations.

I) Main Taxes for FDI Enterprises in Vietnam 2025

(1) Corporate Income Tax (CIT)

CIT is the most important tax for FDI enterprises in Vietnam. Here are the key information you need to know:

  • Standard CIT rate: Currently 20%. However, Vietnam has attractive CIT incentives for some special sectors, locations and types of projects.
  • CIT incentives:
  • Tax rate incentives: Apply preferential tax rates lower than 20% (e.g. 10%, 15%, 17%) for a certain period of time (e.g. 10 years, 15 years) or the entire project implementation period.
  • Tax deductions and exemptions: Tax exemption for the first few years of operation and tax reduction in the following years.
  • Investment incentive sectors: High technology, renewable energy, education, healthcare, software production, high-tech agriculture, etc. (The detailed list may change from time to time and should be updated according to the latest regulations).
  • Investment incentive areas: Areas with difficult or particularly difficult socio-economic conditions, economic zones, industrial parks, export processing zones, etc.
  • Notes on corporate income tax declaration and payment: Enterprises must declare and pay corporate income tax quarterly and finalize annual taxes in accordance with Vietnamese law.

Corporate annual tax settlement for FDI 2025

>>>Read more: Corporate income tax 2025: Calculation and payment rates

(2) Value Added Tax (VAT)

VAT is an indirect Tax liability calculation on the added value of goods and services arising in the process of production, circulation and consumption. FDI enterprises in Vietnam need to understand the regulations on VAT:

VAT tax rate:

  • 0%: Applies to exported goods and services, international transportation, etc.
  • 5%: Applies to some essential goods and services such as clean water, books and newspapers, medical services, education, etc.
  • 10%: General tax rate, applied to most remaining goods and services.

Note: The VAT tax rate table may be adjusted according to State policy.

  • Declaration and payment of VAT: Enterprises need to declare and pay VAT monthly or quarterly according to regulations.
  • VAT refund: In some cases, FDI enterprises may be refunded VAT (for example: exported goods and services, new investment projects).

(3) Personal Income Tax (PIT)

FDI enterprises are responsible for deducting and paying PIT for employees, including Vietnamese employees and foreign employees working in Vietnam.

  • PIT taxable subjects: Resident individuals and non-resident individuals with taxable income arising in Vietnam.
  • PIT taxable income: Income from salaries, wages, business income, income from capital investment, income from real estate transfer, etc.
  • PIT tax rate: Apply progressive tax schedule for income from salaries and wages of resident individuals. Fixed tax rate applies to some other types of income.
  • Family deduction: Taxpayers are entitled to family deduction for themselves and their dependents according to regulations.
  • PIT declaration and payment: Enterprises declare and pay PIT on behalf of employees on a monthly or quarterly basis.

(4) Withholding Tax (WHT)

Withholding Corporate annual tax settlement is applied to foreign organizations and individuals (foreign contractors, foreign subcontractors) doing business in Vietnam or having income arising in Vietnam.

  • Subjects subject to withholding tax: Foreign contractors, foreign subcontractors that do not establish a legal entity in Vietnam or establish a legal entity in Vietnam but operate under a contractor contract, subcontractor contract.
  • Types of withholding tax: Usually include contractor VAT and contractor CIT.
  • Basis for calculating tax and withholding tax rate: Depends on the business line and method of calculating withholding tax (deduction method or direct method).

Financial review for tax settlement in Vietnam 2025

(5) Import and Export Duties

FDI enterprises operating in the field of import and export need to pay attention to import and export business tax reconciliation.

  • Subjects subject to import and export taxes: Goods exported and imported through Vietnam’s border gates and borders.
  • Import and export tax rates: Export tax rate schedule, preferential import tax rate schedule, special preferential import tax rate schedule, etc. (Tax rates may vary depending on each item).

II) Double Taxation Agreements (DTAs)

Vietnam has signed many Double Taxation Agreements (DTAs) with many countries and territories around the world. These DTAs play an important role in:

  • Avoiding double taxation: Helping businesses and individuals avoid paying taxes twice for the same income in both Vietnam and the country of residence.
  • Minimizing tax burden: Often providing preferential tax rates or tax exemptions for certain types of income.
  • Facilitating investment: Promoting investment and trade activities between Vietnam and partner countries.
  • FDI enterprises should carefully study the DTAs that Vietnam has signed with their country to maximize tax benefits.

III) Tax Compliance and Effective Tax Management

Annual tax reporting compliance with Vietnamese tax laws is a key factor for FDI enterprises to operate successfully and avoid legal risks. To effectively manage taxes, FDI enterprises need to:

  • Regularly update the latest tax regulations: Tax policies may change, enterprises need to proactively update information from official sources (Tax authorities, legal documents, etc.).
  • Build a professional accounting and tax management system: Ensure full and accurate recording of arising economic transactions and timely implementation of tax obligations.
  • Seek advice from tax experts: A team of experienced tax experts will help enterprises understand and correctly apply tax regulations, optimize tax obligations and minimize risks.
  • Proactively dialogue and cooperate with tax authorities: Build good relationships with tax authorities to receive support and timely answers to tax problems.

IV) Master Tax – Steady Steps to Success in the Vietnamese Market

The Vietnamese tax system can be complex, but with careful preparation, solid knowledge and professional support, FDI enterprises can completely manage their tax obligations effectively and make the most of investment opportunities in Vietnam in 2025.

Hopefully, this article has provided you with useful information about Financial review for tax settlement for FDI enterprises in Vietnam in 2025. If you have any questions or need more in-depth advice, do not hesitate to contact us!

Contact S4B Vietnam for in-depth advice on FDI Tax refund and final payment in Vietnam

S4B Vietnam

  • Address: Unit 701B – 701C, Tower A, Handi Resco 521 Kim Ma Street, Ba Dinh District, Hanoi, Vietnam.
  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn

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