If you are doing business in Vietnam (with or without a legal entity), tax compliance matters deserve your due attention. Do also note that the legislation and practice at times develop in different directions, which can be very confusing. Many taxpayers find it difficult to ensure that all compliance requirements are satisfied and have to incur costs and resources required to amend previous negligence of compliance requirements.
Tax compliance and reporting regulations are onerous, time consuming and complex, especially for a foreign company doing business in Vietnam.
Business owners and management must manage an increasing number of compliance issues, with a greater potential for risk and significant penalties for failing to deliver. Few businesses have the in-house expertise to deal with such issues in a cost-effective, timely manner.
For many businesses, dealing with compliance issues involves a significant drain on time and resources and, as a result exposes them to a higher degree of tax risk.
Working with Frank Morgan can ease the burden on both administrative staff and the key decision makers of the business. We make your compliance our top priority allowing you to focus on what you do best; managing and growing your business.
We can get involved at any stage – from starting fresh, to taking over from your in-house bookkeepers and accountants when required. This keeps your records accurate, up to date and processed with minimum disruption to your business.
We continuously review the needs of our clients to proactively ensure that they have the proper controls and procedures in place to not only meet compliance requirements, but achieve their personal and business objectives.
We list out below essential prevailing tax compliance requirements for your information and action.
Filing return and payment of 1st-year Business License Tax
By the last day of the calendar month in which your company is incorporated, you need to file the first tax return for Business License Tax and make payment thereof. Both can do online. As of 1 Jan 2017, there are 2 levels of tax dues (VND2mil and 3mil) depending on the charter capital size. From the second year onward, you only need to make annual payment, no return filing is required.
You need to procure an electronic signature token to file tax returns online. The token can be used for other purposes such as: customs declaration, social insurance registrations.
Initial tax registration
Within 30 days from your incorporation date, you are also supposed to complete the initial tax registration with the local tax office. A handful of documents are required for this procedure, including: Business License Tax return and payment receipt, bank account opening document (approved by bank), registration of VAT and accounting methods, etc.
Monthly or quarterly returns
Vietnamese entities are subject to filing several tax returns on a monthly or quarterly basis. As a taxpayer, you need to calculate, prepare and lodge the following tax returns: Value Added Tax; Personal Income Tax. Whether you file these tax returns on a monthly or quarterly basis is generally determined by your annual revenue of the previous year.
For Corporate Income Tax, although no monthly or quarterly return is required, if your business generate positive net earnings that are subject to tax, you still need to determine the CIT internally and make payment accordingly.
Vietnamese entities are obligated to prepare and file tax returns each time such tax derives. The taxes applied include: Capital gain tax return; Real estate income tax; Foreign Contractor [Withholding] Tax, Import and Export duties, Environment Tax, and a lot other taxes depending on your nature of business.
For Foreign Contractor Tax, however, the local party (which makes payment to the foreign contractor or supplier) assume ultimate responsibility for calculating the tax dues, filing the tax returns and paying the dues accordingly.
Vietnamese entities are required to submit an Annual Tax Return for Corporate Income Tax and Personal Income Tax to the local tax authorities within three months of the year end, i.e. 31 March, even if no income was realized. These annual tax returns are to be filed alongside with the annual Financial Statements (audited, if you are a foreign-owned enterprise).