Effective tax planning and tax optimization in Vietnam can be a big challenge, given the taxation complications and overly regular changes of tax laws. With a thorough understanding of Vietnam’s tax systems and regulations and other relevant tax jurisdictions, plus established relationships with related tax authorities, our tax adviser Vietnam will assist you greatly in managing all of the intricate details in local jurisdictions while comprehending and strategically planning the global flow of your transactions. We will also keep you aware of tax-related developments that may affect your business, and help you interpret their significance.
We will help you overcome the above challenge by offering diverse tax services:
Vietnam-based companies are required to prepare and submit tax returns covering Value Added Tax (VAT), employees’ Personal Income Tax (PIT) on a monthly or quarterly basis (depending on the firm’s size), and Foreign Contractor Tax (FCT or simply withholding tax) on an ad-hoc basic (when such tax actually derives for your foreign partners). We can help you with this and liaise with local tax officials as necessary.
On a quarterly basis, we can also help you determine quarterly provisional Corporate Income Tax (CIT) liabilities. Then on a yearly basis, we can help you in preparing and submitting year-end final tax returns for the above taxes. There are numerous other tax obligations a firm has to comply in terms of return filing and payment. Tax payments are to be made in due course; otherwise, significant penalties and interests accrue in cases of delay.
Every 3 to 5 years, companies in Vietnam will normally need to sit with local tax authorities to facilitate their tax audit or tax inspection. Contingent liabilities can be huge if you do commit violations or mistakes (either intentionally or unintentionally): tax retrieves + penalties + interests. We add value by conducting Tax Compliance Review (also called Tax Health Check) prior to the tax audit or inspection.
Based closely on the tax compliance requirements, the assignment represents a high-level review of specific tax areas, typically including corporate income tax, personal income tax, value added tax, foreign contractor tax, stamp duty, land tax, customs and excise tax, etc. This is aimed to highlight key issues that need rectifying to reduce tax risks. Through our extensive experience, we have identified several key risk areas in which many enterprises are not fully compliant or often overlook potential tax planning opportunities.
Our tax compliance review is a cost-effective method to proactively manage risks and reduce potential issues, making sure “no surprises” during the tax audit or inspection by the tax authorities.
Tax authorities in Vietnam are under increasing pressure to generate revenue and/or mitigate tax losses, causing a rise in tax audit activity, and most recently in tax matters associated with transfer pricing.
Tax disputes are getting increasingly common. Liaising and negotiating with tax authorities on those disputes can be a daunting task. Our tax professionals have developed strong working relationships over many years with tax authorities and officials at various levels (national, provincial and district) to assist you in resolving tax disputes should the need arise. We have extensive experience in negotiating with relevant tax authorities on procedural formalities and technical interpretations to resolve disputes in the most effective manner possible.
Uncertainty can arise as global businesses seek to access new and developing markets where the local tax environment may be unfamiliar and tax exposure could be extremely unpredictable. Our solid local expertise coupled with significant international network provides us with ample resources to meet all your expansion goals.
Our tax advice helps you to take advantage of the lowest effective tax rates across multiple jurisdictions (i.e. for the holding company investing into Vietnam) and to identify how best to minimize Vietnam and overseas tax liabilities (for the Vietnamese entities and related overseas parties).
We strive to develop commercially focused and tailored tax strategies to minimize tax exposures and maximize business efficiencies. We utilize our extensive local knowledge and proven tax-efficient strategies to maximize potential benefits and reduce risks. We use these techniques to assist you in planning your legal structure, repatriation planning and exit strategy.
In short, we focus on designing appropriate tax effective structures, to help achieve an integrated tax optimization plan. Whether to an individual or an organization, we understand that businesses regularly need to remit funds offshore. As part of the tax planning process, we make withholding obligations vs. saving opportunities clear to you.
Almost all companies are subject to paying taxes, but through strategic and skilful planning, the amount of taxes paid annually can often be greatly reduced. Taking advantage of government incentives and tax regulations may better position your company when tax finalization (annual tax return filing) arrives. We can develop customized tax recommendations that work for you.
Our approach to developing effective solutions in corporate tax planning is to:
- Analyze your business operations, prioritizing issues based on the risk they present;
- Review your current tax position to determine whether tax obligations are being met and if the Company has potential tax liabilities or assets;
- Research relevant regulations and guidance to offer practical solutions based on our experience and deep knowledge base;
- Guide you through the process and ensure effective implementation, laying the foundations for future efficiency benefits and risk reduction;
- Defend the structure against challenges by the tax authorities (if any);
- Alert you to the latest tax law developments on a continued basis and elaborate how they may impact you and your business.
We have a strong knowledge base and skills to advise expatriate clients on tax issues for executives and employees working internationally (i.e. Vietnam). We help you keep your personal income taxes to a minimum, taking advantage of all double taxation agreements while remaining legitimate. We can develop a personalized package for each key employee to take maximum advantage of the exemptions and incentives available, minimizing the tax burdens to the benefit of both employees and employers.
Understanding the tax implications for your market entry in Vietnam is essential for your success. Getting the right advice in the first place can translate into significant savings. We advises numerous foreign investors on efficient tax structures for their investments, ventures or operations in Vietnam. Our experience allows you to consider all the options and set up a corporate structure that meets both operational and tax efficiency requirements, taking into account both your short-term and long-term objectives. Briefly speaking, we help you devise a structure that is best for you.
Tax Due Diligence procedure is normally a key feature in the context of an intended M&A transaction in Vietnam. Its goal is for an acquirer to determine the past, present and future tax liabilities of the target entity, including disclosed, undisclosed, realised, unrealized, and contingent tax liabilities. This will help establish the purchase price and the type of tax warranties and indemnities included in the Share Purchase Agreement (SPA), determine the tax profile of the target entity and assist in the development of an appropriate acquisition and funding structure.
Our tax advisers perform tax due diligence from both a financial and compliance perspective, and undertakes legal tax due diligence as well. Our work typically includes reviewing potential risks and opportunities, structuring and financing issues from a legal and tax perspective, reviewing legal agreements and advising on appropriate tax warranties and indemnities. We undertake legal tax due diligence in conjunction with any financial tax due diligence to ensure that key issues and risks are appropriately identified and assessed.
Typical examples of taxes that may be covered in a tax due diligence include corporate income tax (CIT), value added tax (VAT), personal income tax (PIT), social security duties, customs duty, stamp duty and landholder duty, withholding tax, social insurance obligations, etc. Some issues that are often the subject of tax due diligence include: compliance with preparing and filing different types of tax returns (as listed above); past tax audits or inspections by tax authorities; tax credits and losses; depreciation and other capital allowances; capital gains tax transactions; research and development; debt forgiveness; related-party transactions and transfer pricing; foreign income and deductions; deemed dividend rules, etc.