Vietnam Tax Compliance 2025: Key Updates, Risks, and Practical Guide for New Businesses

For foreign investors and newly established companies, Vietnam tax compliance 2025 requires more than simply knowing tax rates and filing deadlines. With new rules on corporate income tax, VAT and the global minimum tax, alongside evolving accounting and reporting standards, businesses need a clear strategy to stay compliant, manage risks and optimize costs. In practice, compliance should not be treated as a pure expense, but as an investment in long-term stability, credibility and growth in Vietnam.

1. Vietnam’s Tax Compliance and Regulatory Landscape in 2025

When entering the Vietnamese market, investors have to deal with both core tax categories and a broader regulatory environment. Vietnam currently applies rule-based Vietnamese Accounting Standards (VAS), and the government has announced a roadmap to adopt IFRS from 2026. At the same time, tax authorities are tightening control over non-cash payment requirements for VAT, the conditions for applying tax incentives and the quality of documentation.

Many companies only feel the impact after three to five years, when they undergo tax inspections or audits. Weak internal control over invoices and payments, policies that are not aligned with local rules or incomplete documentation can quickly turn into tax exposures, penalties and back-tax assessments. To operate safely in 2025 and beyond, businesses should design their tax compliance approach together with their market-entry plan, not as a last-minute add-on.

Vietnam tax compliance 2025 requires timely filing and accurate documentation.

2. Internal Control and Accounting Standards: Building the Foundation

A strong internal control and accounting framework is the backbone of tax compliance in Vietnam. Ideally, the internal control system should be designed from the moment the company is established. It should clearly define how invoices are received and approved, how payments are processed, who is responsible for tax filings and how documents will be stored for future audits.

Group policies also need to be mapped against local regulations. If existing group policies already comply with Vietnamese tax and accounting rules, they can be kept to ensure consistency across the group. When there is a conflict – for example in revenue recognition, expense allocation or transfer pricing – policies must be adjusted so that financial statements remain accurate, relevant and compliant with local law.

The upcoming transition from VAS to IFRS is another reason to think early about system design. Companies that build flexible accounting and internal control systems now will find it easier to adapt when Vietnam gradually adopts IFRS, particularly in areas such as leases, revenue and financial instruments. A well-designed framework also helps the Vietnam subsidiary integrate smoothly into the group’s overall governance and audit structure.

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3. Corporate Income Tax (CIT)

Corporate Income Tax remains a central pillar of Vietnam tax compliance 2025. The general CIT rate is still 20 percent for most types of businesses. However, from the end of 2025, Vietnam introduces preferential CIT rates for qualifying small and medium-sized enterprises (SMEs). These incentives are based on the previous tax year’s revenue and business scale.

Annual Revenue (Previous Tax Year)	Applicable CIT Rate
Up to VND 3 billion	15%
From VND 3–50 billion	17%

Not all entities can benefit. Subsidiaries or affiliated enterprises that exceed the thresholds or do not meet the qualifying conditions are not allowed to apply these reduced rates. At the same time, industrial park-specific CIT incentives are being phased out, while incentives for high-tech, research and development and certain expansion projects remain, although under stricter conditions.

For investors, it is important to review eligibility every year, model how the incentive rates affect profit planning and reinvestment and keep clear documentation to support their position during future tax audits.

4. Global Minimum Tax and Multinational Enterprises

A newly introduced directive on the Global Minimum Tax (GMT) brings additional complexity for multinational groups. Large multinational enterprises must pay at least 15 percent CIT on profits in each jurisdiction where they operate. Vietnam is implementing Qualified Domestic Minimum Top-Up Tax (QDMTT) rules aligned with international standards, which means top-up tax may be collected in Vietnam if the effective tax rate for a particular entity falls below 15 percent.

Groups that meet the global revenue thresholds should start preparing detailed data, including entity-by-entity profit and effective tax rate calculations. They also need to evaluate how GMT influences existing tax incentives, particularly where investment projects historically enjoyed low effective tax rates. Coordination with the group tax team is crucial so that the approach in Vietnam is consistent with the global GMT strategy.

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5. Value Added Tax (VAT)

VAT remains a major source of revenue for the state budget and an area where compliance controls are becoming stricter. The standard VAT rate is 10 percent. For most goods and services, a temporary reduction to 8 percent is scheduled to remain in effect until the end of 2026, subject to specific government guidance. New companies are usually assigned quarterly VAT filing at the beginning, which reduces administrative pressure during the early operational phase.

In some situations, companies may be entitled to VAT refunds, for example in export activities, large pre-operation investment projects with significant input VAT or certain government-approved categories. However, VAT refunds are carefully scrutinized. Authorities often request detailed supporting documents and may conduct on-site inspections to verify transactions.

A key change affecting VAT compliance is the reinforcement of non-cash payment requirements. Under recent regulations such as Decree No. 181/2025/ND-CP, purchases of goods or services worth VND 5 million or more must be paid via non-cash methods, such as bank transfers, to qualify for input VAT deduction. If valid proof of non-cash payment is not available by the contractual due date, the company must adjust its VAT return and reduce the deductible input VAT for that period.

In practice, this forces companies to tighten their payment processes. Invoice approval needs to be linked to the chosen payment method. Due dates should be monitored so that large invoices are not paid in cash or via unofficial channels. Many businesses now formalize contingency procedures for cases where payments cannot be made on time, in order to protect their right to deduct VAT and maintain a clean audit trail.

Case Study: Losing VAT Deduction Due to Weak Payment Controls

A newly established foreign-invested company in Ho Chi Minh City entered into a service contract worth VND 280 million with a local vendor. The invoice was issued correctly and the company claimed the full input VAT in its quarterly VAT return. However, because the payment terms were tight and the internal approval process was not clearly defined, the finance team decided to pay the invoice in cash to avoid late-payment penalties from the supplier.

Two years later, during a tax inspection, the authorities requested bank transfer evidence for all invoices of VND 5 million and above. The company could not provide non-cash payment proof for this VND 280 million invoice. As a result, the tax authority disallowed the corresponding input VAT, imposed additional tax, and charged late-payment interest on the underpaid amount. The total financial impact was significantly higher than the original VAT amount that had been claimed.

Following the inspection, the company redesigned its internal control system. All invoices above the non-cash payment threshold now require pre-approval by both the finance manager and the legal representative. Payment requests must include bank transfer instructions, and the accounting team periodically reconciles VAT returns with bank statements. By tightening its approval workflow and documentation, the company has reduced the risk of similar VAT adjustments in future inspections.

6. Personal Income Tax (PIT)

Personal Income Tax is another key element of the compliance landscape. Employers are responsible for withholding and remitting PIT on behalf of employees. The tax system differentiates between residents and non-residents:

Taxpayer Type	PIT Rate Structure
Residents	Progressive 5%–35%
Non-residents	Flat 20% on Vietnam-source income

Correctly classifying employees as residents or non-residents based on their days of presence in Vietnam and any applicable tax treaties is essential. Filing schedules for PIT are usually aligned with VAT schedules, either monthly or quarterly. At year end, companies have to finalize PIT both for the organization and, in many cases, for expatriate employees, in order to reconcile any under- or over-payments.

7. Foreign Contractor Tax (FCT)

Foreign Contractor Tax applies when foreign entities receive Vietnam-source income without establishing a legal entity in Vietnam. The applicable rates depend on the nature of the service, the contract structure and the allocation of revenue between goods and services in cross-border contracts.

Filing deadlines are linked to the payment pattern. For recurring payments, declarations are typically due monthly, by the twentieth day of the following month. For one-time transactions, the deadline is usually within ten days from the date of payment. Companies should also consider any applicable Double Tax Avoidance Agreements, which may reduce withholding rates or prevent double taxation on the same income.

8. Business License Tax (BLT)

Business License Tax is a fixed annual fee that depends primarily on a company’s charter capital. The usual range is between VND 1 million and VND 3 million per year. Newly established companies benefit from a one-year exemption. After this exemption period ends, BLT needs to be paid no later than 30 January each year. Whenever the company changes its charter capital, it should review its BLT bracket and update the tax authority if necessary.

9. Why Tax Compliance Matters for Market Entry

Although Vietnam’s tax system is becoming more transparent and structured, tax audits still place great emphasis on timing, documentation and internal control. A robust approach to Vietnam tax compliance 2025 allows businesses to avoid penalties, back-tax assessments and interest charges. It also helps protect their ability to claim VAT deductions and refunds, and to benefit from available incentives for SMEs, high-tech projects or strategic investments.

Beyond financial savings, good compliance builds trust with regulators, banks, investors and business partners. It also supports smoother consolidation and reporting at group level, which is particularly important for multinational groups preparing for IFRS adoption and the Global Minimum Tax. For foreign investors, integrating tax, accounting and internal control design into the market entry plan is one of the most effective ways to protect long-term investment in Vietnam.

10. How Vinex Supports Your Tax Compliance in Vietnam

Whether you are planning to set up a company or already operating in Vietnam, working with a reliable local advisor can significantly reduce tax and compliance risks. Vinex supports foreign and domestic enterprises with tax planning and structuring for new investments, registration for CIT, VAT, PIT and other tax obligations, and the design and implementation of accounting and internal control systems.

We also assist with ongoing tax filing and reporting, represent clients in communications with tax authorities, and help prepare for inspections or audits. Our goal is to ensure that your Vietnamese operations remain compliant, efficient and aligned with your broader business strategy from day one.

If you need tailored support on Vietnam tax compliance 2025 for your new or existing business, you can reach out to Vinex for a detailed consultation.

Vinex Hotline: +84 98 1111 811 Email: contact@vinex.com.vn