The general rate of VAT in Vietnam which applies to goods and services is 10%. A reduced rate of 5% also applies to certain goods and services.
Other than Value Added Tax, Vietnam also levies a Special Sales Tax (SCT) which is applicable to goods and services classified as luxury. The rates are from 10% to 70% for SCT (refer to 'Special Sales Tax' section above).
The VAT rate is calculated based on the selling price (exclusive of tax).
Taxable transactions – VAT and Special Consumption Tax (SCT) are levied on the sale of goods and the provision of services.
Registration – All organisations and individuals carrying on the production or trading of taxable goods and services in Vietnam must register for VAT. Each branch or outlet of an enterprise must register separately and declare tax on its own activities. Transfers of goods between branches may be subject to VAT. Registration for tax payment is required within 10 days of a corporation's establishment date. VAT payable by a corporation is calculated by the tax credit method or calculated directly on the basis of added value.
Filing and payment – Monthly filing and payment of outstanding VAT must be made on or before the 20th of the following month.
Global Business Service (GBS) Co., Ltd is a leading commercial law firm in Vietnam providing business legal services, investment consulting, and other business support service (company formation, license arrangement, commercial agreements, mergers and acquisitions, shareholder arrangements and disputes, work permit, employment contracts, tax, consulting and financial advisory and executive search services).
The GBS organization is focused on helping senior management and owners of mid-market organizations to reach their goals by providing practical, customized solutions and identifying and pursuing business opportunities in Vietnam.
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