In Vietnam, taxes are an important part of the country’s economy, and all businesses operating in the country are subject to its taxation system. Depending on the type of business, there are various taxes that companies in Vietnam must pay.
In this article, we will look at the various taxes that businesses in Vietnam are subject to, including value-added tax (VAT), corporate income tax (CIT), foreign contractor tax (FCT), and business license tax.
Value-Added Tax (VAT)
VAT is a consumption tax imposed on goods and services in the production and distribution process. It is charged at the point of sale and is calculated as a percentage of the sale price of the goods or services. In Vietnam. The standard VAT rate is 10%, and there are also reduced rates of 5% and 0% for certain goods and services.
Corporate Income Tax (CIT)
CIT is an income-based tax imposed on businesses in Vietnam. It is calculated as a percentage of a company’s total taxable income. And the rate varies depending on the type of company. The standard rate is 20%, but there are reduced rates of 10% for certain types of companies, such as start-ups and small and medium-sized enterprises.
Foreign Contractor Tax (FCT)
FCT is a tax imposed on foreign contractors and suppliers who provide goods and services to companies in Vietnam. It is calculated as a percentage of the total value of the contract, and the rate varies depending on the type of contract. The standard rate is 10%, but there are reduced rates of 5% and 0% for certain contracts.
Business License Tax
The business license tax is a tax imposed on all businesses in Vietnam. It is calculated as a percentage of the company’s total registered capital, and the rate varies depending on the type of business. The standard rate is 0.1%, but there are reduced rates of 0.05% and 0% for certain types of businesses.
In addition to these taxes, businesses in Vietnam are also subject to various other taxes. Such as personal income tax, land use tax, and social insurance contributions.
At Metasource, we understand the complexities of Vietnam’s tax system and can help businesses navigate it. We provide back-office services for small and medium-sized enterprises, including accounting, tax, HR, and payroll. Our team of experts is ready to assist you in understanding and complying with Vietnam’s tax system. Contact us today to find out how we can help your business.