Taxation is a complex area that requires keeping up to date with the latest legislation. Hong Bang Law has many employees who are experts with long experience in the tax field, providing customers with quality and reliable services. Therefore we would like to send you some necessary information about tax responsibility for foreign-invested companies in Vietnam

Legal grounds

• Circular 302/2016/TT-BTC
• Value-added tax law
• Law on Special Consumption Tax

Basically, a foreign-invested company doing business in Vietnam will incur the following tax obligations:

Licensing fees/tax 

The license tax is a tax that is collected annually for businesses and business households, has the meaning of bringing revenue to the state budget and is a tool for the state to manage and understand the operation situation of enterprises. business entities in the economy. 

For enterprises with foreign-owned capital, the registered capital is determined as investment capital and depending on the amount of capital recorded on the Investment License, there will be different license tax rates:

• Level 1 applies to enterprises with registered capital over 10 billion: the tax payable is: 3,000,000 VND/year.

• Level 2 applies to businesses with a registered capital of less than 10 billion: the tax payable is: 2,000,000 VND/year
• Level 3 applies to dependent units: branches, representative offices, business locations, non-business units, other economic organizations, the tax payable is: 1,000,000 VND/year.

Corporate income tax

Corporate income tax is a tax levied on income from production and business activities and other incomes of enterprises. Other income is usually income from the transfer of property and property rights.

Corporate income tax payable = [Taxable income – (Tax-free income + Loss carried forward from the previous year)] × Tax rate

• Taxable income = Revenue – Deductible expenses + Other income)
• The tax rate for calculating corporate income tax is 20%.

Value Added Tax 

Value Added Tax is a tax levied on the added value of certain goods and services during their production, circulation and distribution.

Value-added tax rates have three levels: 0%, 5% and 10%, depending on the group of goods and services specified in Article 10 of the Law on Value-Added Tax.

Special Consumption Tax

Special consumption tax is an indirect tax levied on consumers of luxury products and services, which are not necessary for daily life, or areas that the State wants to restrict. Companies with foreign capital, if trading in products and services specified in Article 2 of the Law on Special Consumption Tax, must pay this tax.

Special consumption tax = Taxable price × Tax rate

In which, the taxable price is the selling price, the service supply price exclusive of excise tax, environmental protection tax and value-added tax. The excise tax rate ranges from 15% to 65% depending on the type of goods and services.

Import and export tax

If a foreign-invested company performs the act of exporting or importing goods, it is obliged to pay import-export tax.

Preferential tax rates and special preferential tax rates are specified in the tariff schedule between Vietnam and countries with preferential agreements. Normal tax rates are issued together with Decision No. 36/2016.

Consulting service and tax declaration for foreign-invested companies of Hong Bang Law

• General advice on issues related to value-added tax, corporate income tax, personal income tax, etc.
• Consulting on tax accounting for foreign-invested companies on a quarterly, monthly, and yearly basis
• Representing clients to work and explain tax declaration and reporting issues to state agencies;
• Working on behalf of clients with tax authorities regarding initial tax declarations, procedures for printing and ordering invoices for the first time;
• Register digital signatures and pay taxes electronically for foreign-invested companies;
• Order printing of invoices at the request of foreign-invested companies;
• Guiding and making tax declarations for newly established foreign-invested companies;
• Declare and submit monthly, quarterly and yearly reports and taxes, and finalize taxes for foreign-invested companies:
• Prepare and complete the bookkeeping system for foreign-invested companies in accordance with current laws;
• Consulting on issues related to foreign loans, parent company loans, loan registration with state banks;
• Consulting to correct errors in accounting and tax activities of enterprises;
• Consulting on financial strategy planning, reasonable cost balance in business activities of foreign-invested companies.

If you need more detailed advice and answers as well as how to access this service, please contact directly our Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the toll free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com

Wishing you and your family good health, peace and success!

Best regards!