Navigating Indirect Taxes In Vietnam

Beyond corporate income tax, businesses in Vietnam are subject to indirect taxes on goods and services throughout production and trade processes. Although taxes are administered at the national level, liabilities are generally paid in the locality where an enterprise is registered, creating practical compliance considerations for both domestic and foreign investors.

Value-added tax (VAT)

Value-added tax in Vietnam applies at multiple stages of production, distribution, and consumption, with standard rates of 0%, 5%, and 10%. The framework is governed by the updated VAT Law No. 48/2024/QH15 and its implementing regulations. The 0% rate mainly applies to exported goods and services, while the 5% rate covers essential goods and priority sectors defined by law. The standard 10% rate applies to most other goods and services. To support post-pandemic recovery, a temporary reduction to 8% remains in place for selected categories until the end of 2026.

VAT generally applies to all entities supplying taxable goods or services, including foreign companies without a physical presence. Most businesses adopt the credit method, allowing input VAT to be offset against output VAT, which helps manage cash flow, and avoids cascading taxation.

Special consumption tax (SCT)

Special consumption tax (SCT), or excise tax, applies to selected goods and services considered non-essential, such as alcohol and tobacco. It is imposed at both import and sale stages, with credits available to prevent double taxation.

The revised Special Consumption Tax Law 2025, effective from 2026, reflects broader policy objectives. These include discouraging harmful consumption, strengthening controls on smuggling and counterfeit goods, and promoting environmentally sustainable industries. Under the SCT Law, the payable tax is calculated using either the ad valorem method based on taxable price and rate, or the specific method based on the quantity of goods and a fixed tax rate.

Import and export duties

Import tax

Most goods imported into Vietnam are subject to import duty, unless they qualify for an exemption under applicable regulations.

Import duty is generally calculated on an ad valorem basis by applying the relevant import duty rate to the customs value of imported goods. Rates are categorised into three tiers:

• Preferential rates for goods from countries granted most-favoured-nation (MFN) status by Vietnam;
• Special preferential rates apply to goods from countries that have entered into preferential trade agreements with Vietnam, including free trade agreements (FTAs);
• Ordinary rates apply for goods from countries without MFN status or other special preferential status.

There are various cases where a refund of import duties is possible if certain conditions are met.

Export tax

Export duties in Vietnam are imposed on a limited range of goods, primarily natural resources, including sand, chalk, marble, granite, ores, crude oil, forest products, and scrap metal. Applicable export duty rates generally range from 0% to 40%, depending on the product category.