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Vietnam Corporate Taxation

Updated:2017-11-22 16:41:55    Source:www.tannet-group.comViews:102

The general corporate income tax rate in Vietnam is 25%. Tax rate for enterprises operating in the oil and gas and other precious natural resources sectors ranges from 32% to 50%, depending on the project.

In 2009, small and medium sized enterprises (with charter capital of less than VND10 billion or fewer than 300 employees) were entitled to a reduction of 30% of their Corporate Income Tax. Other exemptions or reductions in Corporate Income Tax are as stipulated in the relevant legal documents.

Residence -  "Residence" is not defined, but a corporation is generally understood to be resident if it is incorporated in Vietnam.

Tax Basis - Residents are taxed on worldwide income; nonresidents are taxed only on Vietnamese-source income. Foreign-source income derived by residents is subject to corporation tax in the same way as Vietnamese-source income.

Taxable income - Tax is imposed on a company's profits, to include the profits of affiliates and branches (dependent units). Taxable revenue includes income from the sale of products, the provision of services, the leasing or sale of assets, the transfer of shares, joint venture operations with other economic entities and financial operations.

Taxation of dividends -  Dividends paid by a company in Vietnam to its corporate shareholders are not subject to tax.

Capital gains tax - There is no separate capital gains tax; gains are taxed at the standard corporate tax rate of 25%. The transfer value is based on the actual price according to the transfer contract. A deemed fair market value will be used if no contract price is available or if the price stated in the contract is deemed to be not at arm's length.

Vietnam Tax year -  Vietnam  tax year is the fiscal year. A company must notify the tax authorities if its fiscal year differs from the calendar year and only a quarter end is allowed.

Consolidated tax returns - Consolidated tax returns are not permitted. Each company with independent legal status is required to file a separate tax return. There is no tax relief between independent entities in a group.

Tax Filing requirements - A company must file and pay provisional corporate income tax by the end of the month following the end of each quarter. An annual reconciliation and declaration/filing must be made within 90 days after the fiscal year-end date. (Source: Gov.vn)

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