Filing Vietnam Company Taxes: Accounting and Withholding Tax

Introduction

As Vietnam has become one of Southeast Asia’s most attractive emerging markets, foreign companies have clearly been entering faster, spanning manufacturing, retail, IT outsourcing, education services and more. In Ho Chi Minh City and Hanoi especially, many entrepreneurs from Hong Kong, Taiwan, Japan, Korea, Europe and the United States are choosing to set up companies there, to capture the first wave of dividends in regional production or consumer markets.

But entering the market is only the first step. According to a number of KPMG and Deloitte reports on Vietnamese tax, the problem foreign entrepreneurs most often run into isn’t operating strategy — it’s being unfamiliar with the local tax filing process and accounting standards. Common questions include: When are quarterly and annual filing deadlines? What language and currency does the reporting need to use? Does the withholding tax on foreign contractors need to be paid? Will filing late or not filing affect the company’s business license?

Key point: Although Vietnam’s tax filing system is stable and mature, it still differs noticeably from the internationally common IFRS standard. Understanding the accounting framework and the tax timeline not only helps you avoid penalties and back payments, it also helps your company operate more smoothly and lawfully in the local market.

Determining Whether This Applies to You

If you have completed company registration in Vietnam and are preparing to formally operate, hire local staff, or start issuing invoices, this article provides essential financial and tax information. The following three types of operators in particular should understand Vietnam’s tax filing process and accounting system in depth:

This applies to you if you are:

• A foreign individual or corporate entity setting up a Limited Liability Company (LLC) or a Joint Venture in Vietnam
• A founder who has built your own brand offering consulting, design, education, technology or trade services
• A small or medium-sized business operator with local staff, real operations and sales

But if your company is only a registered shell company (with no real income or personnel activity), some of the tax steps in this article may still apply, but most of the details will have little relevance to actual operations.
Even so, it is still advisable to submit an annual report and a basic tax filing every year as required, to avoid a potential fine or the risk of having your registration revoked.

Process Steps

Whether you have just finished setting up your company or are already operating, understanding Vietnam’s tax filing process can help you avoid a lot of potential risk and compliance mistakes. Below is the complete process, from bookkeeping to paying tax, for a company legally operating in Vietnam:

Step 1: Complete the Annual Accounting Books

A company must keep its books according to the Vietnamese Accounting Standards (VAS), covering day-to-day income, expenses, payroll, fixed assets and depreciation. Depending on the company’s size and operating type, tax filings can be submitted either monthly or quarterly.

Step 2: Submit Monthly/Quarterly Returns (VAT, PIT, FCT)

Filing items typically include:

• Value Added Tax (VAT): levied on goods and services, with a standard rate of 10%
• Personal Income Tax (PIT): paid on the portion of wages paid to employees
• Foreign Contractor Tax (FCT): if the company has payment arrangements with an overseas supplier — such as for technical services, consulting fees or equipment leasing — the relevant tax must be proactively withheld and remitted

Deadline reminders:

• Monthly returns must be submitted by the 20th of each month
• Quarterly returns must be submitted within 30 days of the quarter’s end

Step 3: Annual Financial Statement and CIT Corporate Income Tax Filing

After each accounting year ends (usually December 31), a company must submit its annual financial statement and Corporate Income Tax (CIT) return by March 31 of the following year. The standard rate is 20%, though some high-tech or social enterprises may apply for a reduction.

If a loss is recorded for the year, the company can carry the loss forward for up to five years, reducing its future tax burden.

Step 4: Audit Report and Company Annual Report

If you are a foreign-invested company, or your annual revenue reaches the threshold set by the Vietnamese government, you must engage an accredited accounting firm to complete an annual audit report and submit it together with the annual report.

Language and currency requirements: All financial statements must be prepared in Vietnamese, denominated in Vietnamese dong (VND); any foreign currency or foreign-language material must be accompanied by a lawful conversion and explanatory document.

Step 5: Bank Tax Payment and Tracking the Risk of Fines

Vietnam has fully rolled out electronic tax filing and online payment, and a company should make sure it has set up a proper tax account and logs in promptly to complete payment. A late payment will automatically generate late fees and interest, and may further affect the business license or cash-flow management.

FAQ

1. I only have very small revenue — do I still need to file regularly?

Yes. As long as the company is registered and operating in Vietnam, even with no actual income, it must still submit tax returns on schedule (a zero return), to avoid a fine or being classified as an inactive company.

2. What is the withholding tax rate?

Under what circumstances does it need to be withheld? When a company makes a payment abroad for technical service fees, consulting fees, rent, interest or a licensing fee, it needs to withhold and pay the Foreign Contractor Tax (FCT). The actual rate varies by the type of transaction and the applicable bilateral treaty, generally ranging from 5% to 10%.

How should the withholding tax be handled to stay compliant? Ask Zagdim if you’re not sure whether this applies to your situation.

3. Can Vietnamese accounting reports be prepared in English or in US dollars?

No. Under the regulations, all statutory accounting reports must be prepared in Vietnamese and denominated in Vietnamese dong. An English-language report can only serve as a supporting reference — it cannot substitute for the formal statement.

4. What happens if I miss the tax filing deadline?

Vietnam’s tax system automatically calculates daily late fees and interest, and may also result in an administrative fine. If the delay is severe, the company could even be flagged as non-compliant, with its tax code suspended or its business license restricted.

5. Do I definitely need a local Vietnamese accounting firm to help?

It is strongly advisable to engage an accountant or tax advisor familiar with the local system, particularly for international transactions, withholding tax or related-party transaction reporting, where handling things yourself can easily run afoul of foreign-exchange and tax regulations.

6. Can I use IFRS to prepare financial statements?

A company may use IFRS (International Financial Reporting Standards) for internal management purposes, but external filings must still be fully prepared under VAS (Vietnamese Accounting Standards) for reporting and tax payment.

7. Do all companies need an audit? Are there any exceptions?

If a company is foreign-invested, or its annual revenue or total assets reach the threshold set by the Vietnamese government, it must engage an accredited local auditor to issue a formal audit report. Small local companies are assessed case by case, depending on their size and nature.

Everyone’s situation is different, so it’s worth getting a clear answer for your own case.

Points to Watch

Even once you understand Vietnam’s tax filing process and the types of tax involved, plenty of companies still overlook details in practice, leading to unnecessary fines and trouble. Below are the three most common tax mistakes and potential risks:

1. Late Filing: Even One Day Counts as a Violation

Vietnam’s tax system runs strictly and transparently. Whether it’s a monthly, quarterly or annual return, going even one day past the deadline triggers an automatic calculation of late fees and interest. There is no grace period, and subjective reasons aren’t accepted, so it’s essential to set up a clear internal tax calendar.

2. Failing to Withhold Tax: The Company Must Pay It Back Itself

When you make a payment to an overseas supplier (such as a consulting fee, technical support or software licensing), if the Foreign Contractor Tax (FCT) isn’t withheld in advance, the company will be treated as having to bear that tax itself. This not only increases the real cost, it can also trigger a foreign-exchange compliance review.

3. Bank Account Data Is Now Tightly Linked to Tax Records

The Vietnamese government continues to push digitalization and transparency, and a company’s bank transfer data is now already connected with the tax filing system. Every payment record can be cross-checked against the reported figures, and any inconsistency automatically triggers a review notice. So the timing of bookkeeping and tax payment must stay aligned — it can’t be handled in a rush.

Haven’t yet found a clear direction on any of these points? It’s worth checking with a professional before you proceed.

Summary

Whether you have just completed company registration or have already been operating for months, Vietnam’s accounting system and tax filing process are not something you can handle by simply “copying international standards.” Getting a handle on the local timeline, clarifying your tax responsibilities, and building a financial structure that matches your business scale are the foundations for operating steadily and lawfully in Vietnam. If you want to clarify your own filing requirements, or need a professional accounting team to help handle FCT, tax returns or an audit report, ask Zagdim and someone can help you clarify your direction and plan your next steps.

Have a question about this guide? Leave a comment below, or ask Zagdim directly.

Sources

• PwC – *Vietnam Corporate Tax Summary*
• KPMG – *Vietnam Tax and Legal Brochure 2023*
• Vietnam Briefing – *Filing Corporate Income Tax in Vietnam*
• ASEAN Briefing – *Vietnam Taxation and Accounting Guide*
• LTS Group – *Tax Obligations for Foreign-Owned Companies in Vietnam*
• Incorp Vietnam – *Corporate Tax in Vietnam*
• Griffin Associates – *Key Dates for Tax Returns in Vietnam*
• PCA Vietnam – *VAS vs IFRS: 20 Key Differences*
• WTS Global – *Withholding Taxes on Cross-Border Transactions*

*This article is compiled from reports on Vietnamese tax and accounting published between 2023 and 2024. All information comes from authoritative English-language sources such as PwC, KPMG and Vietnam Briefing, and has been cross-checked and translated into summary form. Readers are advised to verify against the latest local regulations and a qualified accountant’s advice before acting.*