Vietnam Corporate Income Tax for Foreign Companies

Updated 2026-07-04

Corporate income tax in Vietnam is straightforward in principle — one standard rate — but the way it is paid trips up most foreign owners, and a separate tax reaches foreign companies with no company here at all. This guide explains the rate, the incentives, the foreign contractor tax, and how CIT is actually settled through the year, so you know what your Vietnam entity owes and when.

The standard rate and incentive rates

The standard corporate income tax (CIT / TNDN) rate in Vietnam is 20%. It applies to a company's taxable profit — revenue less deductible expenses — and it is the same rate whether the owners are Vietnamese or foreign. A foreign-invested company is taxed as an ordinary Vietnamese company on its profits.

Lower incentive rates exist for specific sectors, locations, and project types. They are not something you simply elect — eligibility depends on the activity and where it operates, and it is confirmed against the investment registration, not chosen freely. Broadly, the reduced brackets are:

• 10% — for encouraged fields such as certain high-tech, education, healthcare, and specially incentivized projects, often for a fixed number of years
• 15% and 17% — for other prioritized sectors or locations, again tied to the nature and place of the project
• 20% — the standard rate that applies when no incentive is granted

Foreign Contractor Tax — for companies with no entity here

A foreign company does not need a Vietnamese entity to owe tax here. When an overseas company earns income from Vietnam — supplying services, software, royalties, or work performed under a contract with a Vietnamese party — that income is caught by Foreign Contractor Tax (thuế nhà thầu, FCT).

FCT is not a single tax but a combination of a CIT component and a VAT component on the contractor's Vietnam-source income. In most cases the Vietnamese customer withholds and pays it on the foreign contractor's behalf, so it needs to be priced into the contract from the start. If you invoice Vietnamese clients from abroad, this is the tax to understand before you sign.

How CIT is actually paid — this is the part people get wrong

The single biggest misunderstanding about Vietnamese CIT is the payment rhythm. There is no monthly or quarterly CIT return. VAT and personal income tax are filed on a monthly or quarterly cycle — CIT is not. Instead it follows a two-part pattern:

So you pay provisionally through the year, then reconcile once at the annual finalization. Underpaying the quarterly provisional amounts below a set threshold triggers late-payment interest, which is exactly the trap a good accountant helps you avoid.

• Quarterly — a provisional CIT payment based on estimated profit for the period. This is a payment, not a filed return.
• Annually — the finalization (quyết toán), when the CIT return is filed, the year's real profit is computed, and the final tax is settled against what was already paid — topping up or crediting the difference.

A note on transfer pricing

If your Vietnam company transacts with related parties abroad — a parent, a sister company, a shared service centre — those dealings fall under Vietnam's transfer-pricing rules. Prices between related parties must reflect arm's-length terms, as if the parties were unconnected.

In practice this means keeping transfer-pricing documentation on file and making the required related-party disclosures with the annual finalization. It is a common focus of tax review for foreign-invested companies, so the documentation is best prepared as you go rather than reconstructed under audit.

How outsourced accounting keeps you compliant

CIT does not sit on its own — it rests on books kept correctly all year under Vietnamese Accounting Standards, clean e-invoices, and expenses that are actually deductible. Get the bookkeeping right and the quarterly payments and annual finalization follow naturally; get it wrong and the finalization becomes a scramble.

On a monthly retainer we keep your books, compute and schedule the quarterly provisional CIT, prepare the annual finalization and financial statements, handle related-party disclosures, and deal with the tax authority if it queries your file. The authority remains the decider; our job is to keep you compliant and on time.

What this costs depends on your transaction volume, whether you claim an incentive rate, related-party dealings, and reporting language — cost components we scope up front rather than a fixed number pulled from thin air.