Vietnam - Corporate Summary

Vietnam - Corporate Summary 27/06/2023, 23:20
https://taxsummaries.pwc.com/vietnam/Corporate
Worldwide Tax Summaries
Vietnam
Last reviewed - 03 April 2023
Corporate - Signiﬁcant developments

Vietnam witnessed significant recent developments related to transfer pricing, e-commerce activities, and the application of e-invoices.
On 5 November 2020, the Government issued Decree 132/2020/ND-CP, setting out new rules on transfer pricing in Vietnam applicable for the
financial year 2020 onward.
On 9 February 2022, Vietnam signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit
Shifting (“the Convention” or “the MLI”), becoming the 99th jurisdiction to join the Convention. As a result, potentially 75 of Vietnam’s double tax
agreements (”DTAs”) would be amended once the MLI comes into effect. Taxpayers should be aware of these potential changes to DTAs and the
impact this may have on their plans for structuring their investments and transactions to claim treaty benefits in Vietnam.
Taxing e-commerce activities
In September 2021, the MoF officially issued Circular 80/2021/TT-BTC (Circular 80) providing detailed guidance on the Law on Tax
Administration on various matters, which also have a chapter focus on the tax filing mechanism for foreign companies doing e-commerce, digital
business and other business in Vietnam without a permanent establishment. The General Department of Taxation officially launched the portal
(link: https://etaxvn.gdt.gov.vn/nccnn/Request) for direct tax registration, declaration and payments by e-commerce companies in Vietnam on 21
March 2022. The GDT published the names of the foreign companies registering up to November 2022.
The Government also issued Decree 85/2021 setting out new rules on e-commerce detailing obligations of foreign traders that have e-commerce
activities in Vietnam and related parties.
Various guidance for the new Law on tax administration
E-invoices
See section E-invoices.
Penalty
The Government also released Decree 125/2020/ND-CP setting out new rules on penalties for breaches of tax and invoicing regulations, which
came into force on 5 December 2020. The decree consolidates guidance from various decrees and circulars on tax and invoicing penalties, while
taking into account changes in the new law on tax administration.
General guidance
The New Tax Admin Law was approved in June 2019 and took effect from 1 July 2020, except for provisions relating to e-invoices and electronic
documents, which will be effective from 1 July 2022. New Decree 126/2020 implementing the Tax Admin Law was issued and took effect from 5
December 2020, subject to some transitional rules. As mentioned, Circular 80 guides the implementation of the new Tax Admin Law and Decree
126/2020 has been issued in 2021.
Other key laws
The National Assembly ratified Law No. 45/2019/QH14 amending the Labour Code on 20 November 2019. The amended Code took effect from 1
January 2021.
In addition, the National Assembly ratified the amended Law on Enterprises and the amended Law on Investment in June 2020. The new laws
took effect from 1 January 2021 and replaced the existing laws.
Corporate - Taxes on corporate income

Standard rates
All taxes are imposed at the national level. The standard corporate income tax (CIT) rate is 20%. Enterprises operating in the oil and gas industry
are subject to CIT rates ranging from 32% to 50%, depending on the location and specific project conditions. Enterprises engaging in
prospecting, exploration, and exploitation of mineral resources (e.g. silver, gold, gemstones) are subject to CIT rates of 40% or 50%, depending
on the project’s location.
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Similar to previous years, in order to support enterprises being affected by COVID-19, the government has issued Decree 34/2022 on extension
of deadlines for tax and land rental payments in 2022, which took effect from the signing date of 28 May 2022 to 31 Dec 2022.
There is no concept of tax residency for CIT. Business organisations established under the laws of Vietnam are subject to CIT and taxed on
worldwide income. 20% CIT shall be applicable to foreign income. There are no provisions for tax incentives for such income.
Foreign organisations carrying out business in Vietnam without setting up a legal entity in Vietnam and/or having Vietnam-sourced income are
considered foreign contractors, irrespective of whether the services are performed inside or outside Vietnam. Payments to foreign contractors
are subject to Foreign Contractor Tax (FCT), which consists of value-added tax (VAT) and CIT elements. See the Withholding taxes section
for more information.
Preferential rates
Preferential CIT rates of 10%, 15%, and 17% are available where certain criteria are met.
Special investment incentives are available for research and development (R&D) and large investment projects specified in the Law on
Investment.
See the Tax credits and incentives section for more information.
Calculation of taxable profit

Taxable profit is the difference between total revenue, whether domestic or foreign sourced, and deductible expenses (see the Deductions
section), plus other assessable income.
Taxpayers are required to prepare an annual CIT return, which includes a section for making adjustments to accounting profit to arrive at taxable
profit.
Local income taxes

There are no local, state, or provincial income taxes in Vietnam.
Corporate - Corporate residence

There is no concept of tax residency for CIT. Enterprises established under the law of Vietnam are subject to CIT in Vietnam. In addition, Vietnam
has a broadly worded ‘permanent establishment’ definition.
Permanent establishment (PE)

In Vietnam, a PE is defined as “a fixed place of business through which a foreign enterprise carries out part or the whole of its business or
production activities in Vietnam”. The PE of a foreign enterprise shall include:
A branch, an operating office, a factory, a workshop, means of transportation, a mine, an oil and gas field, or any place relating to the
exploitation of natural resources in Vietnam.
A building site; a construction, installation, or assembly project.
An establishment providing services, including consultancy services, through its employees or other persons.
An agent for a foreign enterprise.
A representative in Vietnam where one has authority to sign contracts under the name of the foreign enterprise, or where one does not have
authority to sign contracts under the name of the foreign enterprise but regularly delivers goods or provides services in Vietnam.
Foreign enterprises with their PEs in Vietnam shall pay tax on the taxable income earned in Vietnam (irrespective of whether it relates to the PE)
and on the taxable income generated out of Vietnam and related to operations of the PEs.
Where a treaty on avoidance of double taxation to which Vietnam is a signatory contains different provisions relating to PE, such treaty shall
apply (see the Withholding taxes section for a list of countries with which such treaties exist).
Corporate - Other taxes

Value-added tax (VAT)
VAT applies to goods and services used for production, trading, and consumption in Vietnam (including goods and services purchased from non-
residents), with certain exemptions. Depending on the category of goods or services, the VAT rates are as follows:
A 0% rate applies to exported goods/services, including goods/services sold to overseas/non-tariff areas and consumed outside
Vietnam/in the non-tariff areas, goods processed for export or in-country export (subject to conditions), goods sold to duty free shops,
certain exported services, construction and installation carried out for export processing enterprises, aviation, marine, and international
transportation services.
A 5% rate applies generally to areas of the economy concerned with the provision of essential goods and services. These include clean
water, teaching aids, books, unprocessed foodstuffs, medicine and medical equipment, husbandry feed, various agricultural products and
services, technical/scientific services, rubber latex, sugar and its by-products, social housing, and certain cultural, artistic, and sport
services/products.
The 10% 'standard' rate applies to activities not specified as not subject to VAT, exempt, or subject to the 0% or 5% rate.
On 28 January 2022, the government released Decree 15/2022, providing a 2% VAT reduction for goods and services that are currently subject
to 10% VAT (with certain exceptions) for the period from 1 February 2022 to 31 December 2022. No extension of the VAT reduction has been
announced for 2023.
Goods or services where VAT declaration and payment are not required
A separate category includes supplies not subject to output VAT, but where related input VAT can, nevertheless, be credited. This category
includes the following:
Compensation, bonus, subsidies, except those provided in exchange for certain services.
Transfers of emission rights and various financial revenues.
Certain services rendered by a foreign organisation, which does not have a PE in Vietnam where the services are rendered outside of
Vietnam, including repairs to means of transport, machinery, or equipment, advertising, marketing, promotion of overseas investment and
trade, brokerage activities for the sale of overseas goods and services, training, and certain international telecommunication services.
Transfer of investment projects with certain conditions.
Sale of agricultural products that have not been processed into other products or have only been through preliminary processing.
Capital contributions in kind.
Collections of compensation/indemnities by insurance companies from third parties.

Collections on behalf of other parties that are not related to the provision of goods/services (e.g. if company A purchases goods/services
from company B but pays to company C, and, subsequently, company C pays to company B, then the payment from company C to
company B is not subject to VAT).
Commissions earned by (i) agents selling services, including postal, telecommunications, lottery, airlines/bus/ship/train tickets, at prices
determined by principals; and (ii) agents for international transportation, airlines, and shipping services entitled to 0% VAT; or (iii) insurance
agents.
Commissions from the sale of exempt goods/services.
Goods exported and then re-imported back to Vietnam due to sales returns by overseas customers.
Exempt goods and services

There are stipulated categories of VAT exemptions, including certain agricultural products; goods/services provided by individuals having annual
revenue of 100 million Vietnamese dong (VND) or below; imported or leased drilling rigs, airplanes and ships of a type that cannot be produced in
Vietnam; transfer of land use rights (LUR) (detailed guidance is provided to specific cases); various financial services; various securities activities
including fund management; capital assignments; foreign currency trading; debt factoring; certain types of insurance; medical services and
elderly/disabled people care service; education, printing/publishing, public transportation, export of unprocessed natural resources, etc.
When a supply cannot be readily classified based on the tax tariff, VAT must be calculated based on the highest rate applicable for the particular
range of goods that the business supplies.
Taxpayers must file VAT returns on a monthly basis by the 20th day of the subsequent month or on a quarterly basis by the last day of the first
month of the following quarter (for companies with prior year annual revenue of VND 50 billion or less).
E-invoices
From 1 July 2022 onwards, all businesses, economic organisations, business households, and individuals paying tax under the declaration
method must use e-invoices (except for certain cases).
Customs duties
Customs duties generally comprise import duty and import VAT. Most goods imported into Vietnam are subject to import duty and import VAT,
except they qualify the conditions for exemption, such as goods imported for the production of subsequently exported goods under toll
manufacturing or contract manufacturing arrangements, goods imported to form fixed assets of incentivised investment projects (in this case
import VAT is not exempted), etc.
In addition to import duty and import VAT, there are also export duty, import special sales tax (SST), environment protection tax (EPT), anti-
dumping tax, anti-subsidy tax, and safeguard tax, which are applied to only a limited number of goods. Anti-dumping tax, anti-subsidy tax, and
safeguard tax are all considered as supplemental import duties applicable to the imported goods under certain scenarios.
Import duty is computed on an ad valorem basis (i.e. multiplying the imported good’s dutiable value by the corresponding import duty rate).
Import duty rates are classified into three categories: ordinary rates, preferential rates, and special preferential rates.
Preferential rates are applicable to imported goods from countries that have most-favoured-nation (MFN, also known as normal trade relations)
status with Vietnam. The MFN rates are in line with Vietnam’s World Trade Organization (WTO) commitments and are applicable to goods
imported from other WTO member countries.
Special preferential rates are applicable to imported goods from countries that have a special preferential trade agreement (or free trade
agreement [FTA]) with Vietnam. Currently, effective FTAs to which Vietnam is a party include:
The FTA between ASEAN member states.
The FTA between ASEAN member states and Japan.
The FTA between ASEAN member states and China.

The FTA between ASEAN member states and Hong Kong.
The FTA between ASEAN member states and India.
The FTA between ASEAN member states and Korea.
The FTA between ASEAN member states and Australia and New Zealand.
The FTA between ASEAN member states and Australia, China, Japan, Korea, and New Zealand (i.e. the RCEP).
The FTA between Vietnam and Japan.
The FTA between Vietnam and Korea.
The FTA between Vietnam and Chile.
The FTA between Vietnam and the Eurasian Economic Union (Vietnam and the Customs Union of Russia, Armenia, Belarus, Kazakhstan,
and Kyrgyzstan).
The CPTPP pact or TPP-11 (i.e. the Comprehensive and Progressive Trans-Pacific Partnership agreement among Australia, Brunei,
Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).
The FTA between Vietnam and the European Union (EU) (i.e. the EVFTA).
The FTA between Vietnam and the United Kingdom (UK) (i.e. the UKVFTA).
The FTAs with the European Free Trade Association (Vietnam and Iceland, Liechtenstein, Norway, and Switzerland).
The FTA between Vietnam and Asia-Pacific nations (i.e. Regional Comprehensive Economic Partnership - RCEP) of Australia, Brunei,
Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, and Thailand).
In addition, negotiations on the FTA with the European Free Trade Association (Vietnam and Iceland, Liechtenstein, Norway, and Switzerland)
and with Israel are in progress.
To be eligible for preferential rates or special preferential rates, the imported goods must be accompanied by an appropriate Certificate of Origin.
When goods are sourced from non-preferential treatment/non-favoured countries, the ordinary rate (being the MFN rate with a 50% surcharge) is
imposed.
Import VAT is applied to imported goods at a rate most commonly of 10%.
Export duties are charged only on a few items, basically certain natural resources. Rates range from 0% to 40%.
Special sales tax (SST)

SST is a form of excise tax that applies to selected goods and services. Goods that are manufactured and/or imported into Vietnam and subject
to SST include cigars/cigarettes, spirits, wine and beer, automobiles, motorcycles, air conditioners, airplanes, petrol, etc. For goods, SST is
charged at the production or importation stage. Imported goods (except for various types of petrol) are subject to SST at both the import and
selling stages. The SST paid at importation will be creditable against SST paid at the selling stage.
The SST rates range from 7% for petrol to 75% for cigars/cigarettes.
The National Assembly ratified a new law amending and supplementing a number of provisions under certain laws, including the Law on SST.
Accordingly, SST rates applicable to electric cars will be significantly reduced over the next five years, effective from 1 March 2022.
In February 2023, the Ministry of Finance released a proposal to revise the SST law for public comments. The SST law amendment is proposed
to be discussed and approved in the National Assembly meeting in May 2024. The draft SST law proposes certain changes, include, inter alia,
extend the scope of application, revise SST rates for certain items, align with specialized regulations to reduce confusion during implementation
of SST law, revisit the current guidance on SST refunds in certain cases.
Property taxes
Foreign investors generally pay rental fees for land use rights. The range of rates is wide depending upon the location, infrastructure, and the
industrial sector in which the business is operating.
In addition, owners of houses and apartments have to pay land tax under the law on non-agricultural land use. The tax is charged on the specific
land area used based on the prescribed price per square meter at progressive tax rates ranging from 0.03% to 0.15%.
Stamp taxes
Certain assets, including houses, land, automobiles and motorcycles, etc., that are subject to registration of ownership are subject to stamp
duty. The stamp duty rates vary depending on the asset transferred.
Payroll taxes
Please see the Other taxes section in the Individual tax summary.
Corporate - Green Taxes and Green Incentives Landscape

Green Taxes
On 17 November 2020, the National Assembly issued the new Law on Environment 72/2020/QH14, which took effect from 1 January 2022,
setting out a comprehensive guidance on environmental protection matters.
Environmental or green taxes include taxes on energy, transport, pollution and resources. Energy taxes are taxes on energy products and
electricity used for transport, such as petrol and diesel, and for other purposes, such as fuel oils, natural gas, coal and electricity used in heating.
While Vietnam does not have green taxes, Vietnam also developed different types of taxes to tackle environmental matters.
Below are some common types of green taxes.
Natural Resource Taxes (NRT)

NRT is payable by industries exploiting Vietnam’s natural resources, including petroleum, minerals, natural gas, forest products, natural seafood,
natural bird’s nests, and natural water. Natural water used for agriculture, forestry, fisheries, salt industries, and sea water for cooling purposes
may be exempt from NRT, provided that certain conditions are satisfied. The tax rates vary depending on the natural resource being exploited,
ranging from 1% to 40%, and are applied to the production output at a specified taxable value per unit. Various methods are available for the
calculation of the taxable value of the resources, including cases where the commercial value of the resources cannot be determined. Crude oil,
natural gas, and coal gas are taxed at progressive tax rates depending on the daily average production output.
Environment Protection Taxes (EPT)

EPT is an indirect tax that is applicable to the production and importation of certain goods deemed detrimental to the environment, the most
significant of which are petroleum and coal. The tax is calculated as an absolute amount on the quantity of the goods.
Since 1 January 2019, the tax rates vary among the goods applied from VND500/kg for restricted use chemicals to VND50,000/kg for plastic
bags while the tax rate applicable for petroleum was VND4,000/litre.
Carbon Emission Quota

In the new Law on Environment, the Government introduced the concept of carbon trading plan and an intention to impose a cap on carbon
emission, i.e. carbon emission quota to all manufacturing companies which emit carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3). Enterprises that are in the list of
sectors producing greenhouse gas need to be inspected. Accordingly, these enterprises must build a plan to reduce their greenhouse gas
emissions based on the quota provided, and they can also exchange, trade quota and carbon offsets.
Green Incentives
Green incentives are financial benefits to encourage projects and investments that reduce environmental harm. They include environmental cash
grants for such projects and tax incentives that reduce tax liabilities to stimulate investments that mitigate environmental impact.
Apart from the tax incentives, in-scope projects shall be granted with other incentive schemes, such as: land related benefits, e.g. priority in the
allocation of land, reduction of land rental; preferential financial schemes; exemption and reduction of environmental protection taxes and fees;
subsidies to environmental-friendly products and services.
Corporate - Branch income

Branches of foreign entities are subject to the same CIT regime as entities incorporated in Vietnam.
Corporate - Income determination

Inventory valuation
At present, there are no provisions for valuing inventories or determining inventory flows. There is a separate tax guidance for making provision
for inventories and certain other provisions.
Asset revaluation
Gains from the revaluation of assets for the purposes of capital contribution or transfer upon division, de-merger, consolidation, merger, or
conversion of business are subject to the standard CIT rate.
Capital gains
Gains derived from the sale of interest in a Vietnam company are in many cases subject to 20% CIT. This is generally referred to as capital gains
tax (CGT) although it is not a separate tax as such. The taxable gain is determined as the excess of the sale proceeds less historical cost (or the
initial value of contributed charter capital for the first transfer) less transfer expenses.
Recently there has been a move to tax not only the transfer of interest in a Vietnamese entity, but also the transfer of interest in overseas parents
(direct or indirect) of a Vietnamese company.
Transfers of securities (bonds, shares of public joint stock companies, etc.) by a foreign entity are subject to CIT on a deemed basis at 0.1% of
the total sales proceeds. Gains derived by a resident entity from the transfer of securities, however, are taxed at 20%.
Dividend income
Dividends received from investments in other companies in Vietnam are not subject to CIT if they have been subject to CIT at the investee
companies.
Interest income
Interest income is taxed at the standard CIT rate.
Certain types of interest income are entitled to tax incentives granted to the investment project, depending on the conditions on which tax
incentives are granted.
Royalty income
Currently, royalty income is subject to tax at the standard CIT rate.
Other significant items

Tax incentives that are available for investment in encouraged sectors do not apply to other income (except for income that directly relates to the
incentivised activities, such as disposal of scrap), which is broadly defined.
The following income items are subject to the standard CIT rate and are not entitled to tax incentives (including preferential tax rate and
exemption/reduction):
Income from transfer of the right to make capital contribution; income from transfer of immovable property (except for income from
investment in social houses); income from transfer of investment projects, transfer of the right to take part in investment projects, and
transfer of the right to exploration and exploitation of minerals.
Income from activities of prospecting for, exploration of, and exploitation of oil, gas, and other rare and precious resources; income from
activities of exploiting minerals.
Income from providing services subject to SST in accordance with the provisions of the law on SST.
Foreign income
Foreign income, under the domestic tax law, is subject to the standard CIT rate with tax credits available (see Foreign tax credit in the Tax credits
and incentives section).
Foreign income shall be taxed when earned. There are no provisions for tax deferral or preferential tax rates for foreign income.
Corporate - Deductions
Depreciation and amortisation
Tax depreciation may differ from accounting depreciation. Depreciation in excess of the rates specified in the regulations on tax depreciation is
not deductible. These regulations specify maximum and minimum permissible effective lives for various classes of assets, including intangibles.
Current straight-line tax depreciation rates ranges from 2% to 33.33%.
The depreciation period of assets of the Build Operate Transfer (BOT) and Business Cooperation Contract (BCC) projects is the remaining life of
the Contract.
Start-up expenses
Pre-establishment expenses (i.e. expenses for setting up a company) and certain expenses (i.e. training, advertising before establishment, costs
for the research stage, relocation cost) can be amortised over a period of up to three years from the commencement of operations. In order for
pre-establishment and pre-operating expenses to be deductible for CIT purposes, supporting documents to substantiate the fact that these pre-
operating expenses were necessarily and legitimately incurred for the establishment of the company should be available.
Interest expenses
Interest expenses are generally deductible except for certain cases, such as:
Interest on loans corresponding to the portion of charter capital not yet contributed as scheduled is not deductible.
Interest on loans from non-economic and non-credit organisations exceeding 1.5 times the interest rate set by the State Bank of Vietnam is not
deductible.
Interest on loans that has been capitalised is not deductible.
Tax deductibility of interest on loans is capped at 30% of earnings before interest, taxes, depreciation, and amortisation (EBITDA) when a
taxpayer has related-party transactions (see Transfer pricing in the Group taxation section).
Bad debt
Provisions for bad debts are deductible if the provision is made in accordance with the guidance by the Ministry of Finance (MoF). Certain
conditions must be satisfied in order to set up a provision for bad debts (e.g. the debts must be supported by original documentation, the debts
must be overdue under the terms of an economic contract, etc). In the absence of satisfying the necessary conditions, the provision for bad
debts will generally not be deductible.
Fines and penalties

Administrative penalties and fines are specifically considered non-deductible.
Taxes
Creditable input VAT, CIT, and other fees/charges are not deductible for CIT purposes.
Other significant items

The following other expenditures are specifically stated to be non-deductible:
Employee remuneration expenses that are not actually paid or are not stated in a labour contract, collective labour agreement, or the
financial regulations of the company.
Staff welfare (including certain benefits provided to family members of staff) exceeding a cap of one month’s average salary.
Provisions for severance allowance (except for companies not subject to mandatory unemployment insurance contributions) and payments
of severance allowance in excess of the prescribed amount per the Labour Code.
Contributions to voluntary pension funds and the purchase of voluntary pension for employees exceeding VND 3 million per month per
person.
Reserves for R&D that are not in accordance with the prevailing regulations.
Provisions for stock devaluation, bad debts, financial investment losses, product and services warranties,
government/corporate/government-guaranteed bonds, or construction work that are not in accordance with the prevailing regulations.
Unrealised foreign exchange gain/losses due to the revaluation of foreign currency items other than account payables at the end of a
financial year.
Management expenses allocated to PEs in Vietnam by the foreign company’s head office that are not in accordance with the regulations.
Certain expenses directly related to the issuance, purchase, or sale of shares.
Services fees paid to related parties that do not meet certain conditions.
For certain businesses (e.g. insurance companies, securities trading, lotteries), the MoF provides specific guidance on deductible expenses for
CIT purposes.
Net operating losses

Losses may be carried forward fully and consecutively for a maximum of five years. Carryback of losses is not permitted.
Payments to foreign affiliates

There are no special restrictions on the deductibility of royalties, loan interest, and service fees paid to foreign affiliates (except for those paid by
branches). However, the payment must be defendable on an arm’s-length basis as required by transfer pricing regulations and substantiated by
sufficient supporting documents for CIT deduction purposes (see Transfer pricing in the Group taxation section). Certain contracts for the
transfer of technology and foreign loans must be registered with the competent authorities.
Corporate - Group taxation

There is no provision for any form of consolidated filing or group loss relief in Vietnam.
Transfer pricing
On 5 November 2020, the government issued Decree 132/2020/ND-CP, setting out new rules on transfer pricing in Vietnam. Decree 132 takes
effect from 20 December 2020, applies for the financial year 2020 onwards.
Related party definition

The ownership threshold required to be a ‘related party’ under Decree 132 is still 25%. Under Decree 132, a new related party definition (Item l
Point 2, Article 5 of Decree 132) is introduced. An enterprise and an individual are considered related parties if they have the following
transactions in a tax period:
Transferring, receiving contributed capital equivalent to at least 25% of the capital contributed by the owner of the enterprise.
Borrowing, lending at least 10% of the capital contributed by the owner of the enterprise at the time of conducting the transaction.
Transfer pricing methodologies

The acceptable methodologies for determining arm’s-length pricing are analogous to those espoused by the OECD in the Transfer Pricing
Guidelines for Multinational Enterprises and Tax Administrations (i.e. comparable uncontrolled price, resale price, cost plus, profit split, and
comparable profits methods).
Tightening of the acceptable arm’s-length range

Under Decree 132, the acceptable arm’s-length range is raised to span the 35th percentile to the 75th percentile (tightened from the 25th to the
75th percentile range under Decree 20). As such, the minimum threshold is raised by 10%.
Therefore, taxpayers will need to re-assess their transfer pricing positions for financial year 2020 onwards to ensure that their margins fall within
this tighter range.
Selection of comparables
Taxpayers must first look for comparables in the same local market or region and then broaden to other countries in the region that have similar
industry circumstances and economic development level.
Transfer pricing declaration forms

Compliance requirements include an annual declaration of related-party transactions and transfer pricing methodologies used, and a taxpayer
confirmation of the arm’s-length value of their transactions (or otherwise the making of voluntary adjustments).
Taxpayers engaged in related-party transactions solely with domestic related parties could be exempt from the requirements to disclose
information on such transactions in the transfer pricing declaration forms, where both parties have the same tax rate and neither party enjoys tax
incentives.
Transfer pricing documentation

Companies that have related-party transactions must also prepare and maintain contemporaneous transfer pricing documentation. Decree 132
introduces a three-tiered transfer pricing documentation approach to collect more tax-related information on multinational companies’ business
operations, specifically a master file, local file, and country-by-country report (CbCR). The three-tiered transfer pricing documentation has to be
prepared and maintained in house before the submission date of the annual tax return.
If the taxpayer’s ultimate parent resides in Vietnam and has worldwide consolidated revenues in the fiscal year of at least VND 18,000 billion, the
ultimate parent company in Vietnam is responsible for preparing and submitting the CbCR. Under Decree 123, the CbCR is required to be filed
with the tax authorities within 12 months from the fiscal year-end. However, if the ultimate parent is outside Vietnam, the CbCR is not required to
be filed locally, instead such CbCR would be made available to the Vietnamese tax authorities through the automatic exchange of information
(AEOI) procedure. A company is, however, required to submit the CbCR and relevant notification locally within 12 months from the year-end in
certain circumstances.
Under Decree 132, a taxpayer is exempt from preparing transfer pricing documentation (but not all other aspects of the Decree) if one of the
following conditions is met:
has revenue below VND 50 billion and total value of related-party transactions below VND 30 billion in a tax period
concludes an advance pricing agreement (APA) and submits annual APA report(s)
has revenue below VND 200 billion, performs simple functions, and achieves at least the following ratios of earnings before interest and tax
to revenue from the following business: distribution (5%), manufacturing (10%), processing (15%), or
taxpayers only have domestic related party transactions, taxpayers and their related parties have the same tax rate, and none of the parties
enjoy tax incentives.
Transfer pricing audits

There has been a marked increase in the number of transfer pricing audits performed in recent years, with these adopting an increasingly
sophisticated approach. Common challenges by the tax authorities include questions on the validity of comparables selected in transfer pricing
documentation, deductibility of intra-group service charges, and fluctuations in segmented and/or whole company profit margins over years.
Companies in loss-making positions also draw attention from the tax authorities and are expected to be in the position to explain their business
circumstances. Most general tax audits will now include a review of the taxpayer’s transfer pricing position.
30% EBITDA cap on total interest expense

Under Decree 132, which amended Article 8 point 3 of Decree 20, the cap on tax deductibility of interest increases from 20% to 30% of EBITDA.
The cap applies to net interest expense (i.e. after offsetting with interest income from loan and deposit).
Non-deductible interest expenses can be carried forward to the subsequent five years. Certain types of financing are excluded from the cap,
including interest on official development assistance (ODA) loans, various preferential loans made by the government, and loans made for
implementing national programs and state social benefit policies.
Advance Pricing Agreements (APAs)

Taxpayers have the option to enter into unilateral, bilateral, or multilateral APAs with the tax authorities. The GDT has been in negotiations with
the competent authorities of various overseas jurisdictions, but no APA has been concluded.
On 18 June 2021, the Ministry of Finance issued Circular 45/2021/TT-BTC, setting out new rules on APAs in Vietnam. Circular 45 takes effect
from 3 August 2021 and replaces the existing APA Circular 201 issued in 2013.
Thin capitalisation
There are no thin capitalisation requirements in the tax legislation. However, the level of permitted debt funding will be limited by virtue of
licensing requirements. The maximum amount of debt funding is the difference between the licensed investment capital and charter capital.
Decree 123, however, provides that deductible interest on loans shall be subject to the cap of 30% of EBITDA (as above).
Controlled foreign companies (CFCs)

Vietnam does not have any CFC legislation.
Corporate - Tax credits and incentives

Foreign tax credit
In respect of Vietnamese enterprises earning income from overseas investment, CIT (or a kind of tax with a nature similar to CIT) paid in a foreign
country or paid on behalf by its partner in the country receiving the investment (including tax levied on the dividend) is allowed to be creditable.
The credit shall not exceed the CIT amount payable in Vietnam.
The foreign income tax that is entitled to exemption or reduction in accordance with the foreign law shall also be credited.
Inbound investment incentives

Tax incentives are granted based on regulated encouraged sectors, encouraged locations, and size of the projects. Business expansion projects
which meet certain conditions, are also entitled to CIT incentives. New investment projects and business expansion projects do not include
projects established as a result of certain acquisitions or reorganisations.
The sectors that are encouraged by the Vietnamese government include education, health care, sport/culture, high technology, environmental
protection, scientific research and technology development, infrastructural development, processing of agricultural and aquatic products,
software production, and renewable energy.
New investment or expansion projects engaged in manufacturing industrial products prioritized for development are entitled to CIT incentives if
they meet one of the following conditions:
the products support the high technology sector; or
the products support the garment, textile, footwear, electronic spare parts, automobile assembly, or mechanical sectors.
Locations which are encouraged include qualifying economic and high-tech zones, certain industrial zones and designated difficult socio-
economic areas.
Large manufacturing projects (excluding those related to the manufacture of products subject to special sales tax or those exploiting mineral
resources) are entitled to CIT incentives as follows:
Projects with total capital of VND6,000 billion or more, disbursed within 3 years of being licensed, meeting either of the following criteria:
i. minimum revenue of VND10,000 billion/annum by the 4 th year of operation; or
ii. head count of more than 3,000 by the 4th year of operation.
Projects with total capital of VND12,000 billion or more, disbursed within 5 years of being licensed and using technologies appraised in
accordance with relevant laws.
The preferential rates of 10% and 17% are available for 15 years and 10 years respectively, starting from the commencement of generating
revenue from the incentivised activities. The duration of application of the preferential tax rates can be extended in certain cases. When the
preferential rates expire, the CIT rate reverts to the standard rate. The preferential rate of 15% applies for the entire project life in certain cases.
Certain social sectors (e.g. education, health) enjoy the 10% rate for the entire life of the project.
Decision 29/2021, which took effect from 6 October 2021, provides guidance on special investment incentives applicable for the qualified R&D
and large investment projects specified in the Law on Investment. The CIT incentives vary depending on a number of criteria. The most
favourable package comprises a preferential tax rate of 5% for a period of 37 years, 6 years of tax exemption, plus a 50% CIT reduction for a
subsequent 13 years. In addition, there is also exemption/reduction from land rental fee and water rental fee for a period of time.
Tax holidays
Investors may be considered for tax holidays and reductions. The holidays take the form of a complete exemption from CIT for a certain period
beginning immediately after the enterprise first makes profits, followed by a further period where tax is charged at 50% of the applicable rate.
However, where the enterprise has not derived profits within three years of the commencement of operations, the tax holidays/tax reduction will
start from the fourth year of operation.
Criteria for eligibility to these holidays and reductions are set out in the CIT regulations.
As noted above, under Decision 21, R&D and investment projects that are entitled to special investment incentives would enjoy longer tax
exemption and reduction periods.
From 1 January 2018, certain incentives, including a lower CIT rate, will be granted to small and medium enterprises (SMEs) (various criteria
applied to be considered as SMEs).
Employment incentives
Additional tax reductions may be available for engaging in manufacturing, construction, and transportation activities that employ several female
staff and/or ethnic minorities. CIT reduction must correspond with the actual payment for those employees.
Research and Development (R&D) Fund

Business entities in Vietnam are allowed to set up a tax-deductible R&D Fund. Enterprises can appropriate up to 10% of annual profits before tax
to the fund. Various conditions apply.
Corporate - Withholding taxes

Foreign Contractor Tax (FCT) is withheld on payments to foreign contractors.
Payments to foreign contractors
FCT on payments to foreign contractors applies where a Vietnamese contracting party (including a foreign-invested enterprise incorporated in
Vietnam) contracts with a foreign party that does not have a licensed presence in Vietnam, irrespective of whether the services are provided in
Vietnam or overseas.
This FCT generally applies to payments derived from Vietnam, except for the pure supply of goods (i.e. where the responsibility, cost, and risk
relating to the goods passes at or before the border gate of Vietnam and there are no associated services performed in Vietnam), services
performed and consumed outside Vietnam, and various other services performed wholly outside Vietnam (e.g. certain repairs, training,
advertising, promotion).
In addition, certain distribution arrangements where foreign entities are directly or indirectly involved in the distribution of goods or provision of
services in Vietnam are subject to FCT (e.g. where the foreign entity retains ownership of the goods; bears distribution, advertising, or marketing
costs; is responsible for the quality of goods or services; makes pricing decisions; or authorises/hires other Vietnamese entities to carry out part
of the distribution of goods/provision of services in Vietnam).
Foreign contractors can apply to be deduction-method VAT payers if they adopt the Vietnamese accounting system. If accounting records are
adequate, the foreign contractor will pay CIT on actual profits, but otherwise on a deemed-profit basis.
For direct (non-deduction-method) foreign contractors, VAT and CIT will be withheld by the contracting party at deemed rates. Various rates are
specified according to the nature of the contract performed. For CIT, the FCT rate varies from 0.1% to 10%. For VAT, the FCT rate can also range
from 2% to 5%. The VAT withheld by the contracting party is an allowable input credit in its VAT return.
Foreign contractors can pay FCT using a hybrid method. The hybrid method allows foreign contractors to register for VAT and accordingly pay
VAT based on the deduction method but with CIT being paid under the direct method rates on gross turnover. To apply this method, the foreign
contractors need to satisfy certain conditions.
A summary of VAT and CIT FCT rates for certain activities follows:
Types of payment Deemed VAT rate (%) (2) Deemed CIT rate (%)
Supply of goods in Vietnam or associated with services rendered in Vietnam (including in-country import-
export and imports, distribution of goods in Vietnam or delivery of goods under Incoterms where the seller Exempt (1) 1
bears risk relating to goods in Vietnam)
Services 5 5
Restaurant, hotel, and casino management services 5 10
Construction, installation without supply of materials, machinery, or equipment 5 2
Construction, installation with supply of materials, machinery, or equipment 3 2
Transportation 3 (3) 2
Interest Exempt 5
Royalties Exempt/5 (4) 10
Transfer of securities Exempt 0.1
Financial derivatives Exempt 2
Other activities 2 2
Notes
1. VAT will not be payable where goods are exempt from VAT or where import VAT is paid upon importation.
2. The supply of goods and/or services to the oil and gas industry is subject to the standard 10% VAT rate. Certain goods or services may be
VAT exempt or subject to 5% VAT.
3. International transportation is subject to 0% VAT.
4. Computer software, transfer of technology, and transfer of intellectual property (IP) rights (including copyrights and industrial properties) are
VAT exempt. Other royalties may attract VAT.
Interest
The FCT applied to interest payments to an overseas lender is 5%. Offshore loans provided by certain government or semi-governmental
institutions may obtain an exemption from the interest FCT where a relevant double tax agreement (DTA) or inter-government agreement (IGA)
applies.
Interest earned from bonds (except for tax-exempt bonds) and certificates of deposit are subject to 5% FCT. The sale of bonds and certificates
of deposits are subject to deemed tax of 0.1% of the gross sales proceeds.
Royalties, licence fees, etc.

A 10% royalty FCT applies in the case of payments made to a foreign party for transfers of technology or software licence. Transfers of
technology are defined very broadly. Certain contracts for the transfer of technology must be registered with the competent authorities.
Recently, the MoF has sought to impose a 5% VAT on the payments for the right to use a trademark.
Foreign companies engaged in or selling goods/services via e-commerce, digital platform, and other business in Vietnam without a PE now have
to directly register and file tax returns in Vietnam for their income from selling goods/services to Vietnamese corporates and individuals. Foreign
companies will be awarded with a tax code, declare tax online at the portal of the GDT on a quarterly basis, and pay tax online.
The tax payable will be determined based on the revenue derived in Vietnam at the deemed rates in accordance with the current VAT and CIT
regulations (refer to the withholding tax [WHT] rates set out above). The tax rates would depend on the nature of goods or services provided by
foreign suppliers.
If foreign companies do not directly register, declare, and pay tax in Vietnam, Vietnamese organisations and parties have the following
responsibilities:
If the Vietnamese purchasers or distributors have business registration, they are responsible to withhold and declare tax on behalf of the
foreign suppliers.
If the Vietnamese purchasers are individuals, banks, or payment intermediary companies, they are required to withhold and declare tax on a
monthly basis.
If the individuals use cards or other payment methods from which the banks or payment intermediary companies cannot withhold, the
banks or payment intermediary companies are required to track and report payments made to foreign companies to the GDT on a monthly
basis.
Management fees and head office charges/services

FCT applies on management fees and head office charges/services at the rates applicable to services (see above).
Cross-border leases
A Vietnam-based lessee is required to withhold tax from payments to an offshore lessor. 5% VAT and 5% CIT is applicable to the rental charge if
it is an operating lease. If it is a finance lease, the rental payment will be exempt from VAT and subject to 5% CIT.
Tax treaties
The above FCT rates may be reduced by a relevant DTA.
Circular 80/2021 provides new guidance on claiming tax treaty benefits, including the procedures and documents required for the submission.
Notably, a formal review and approval process is now introduced.
A deadline for the tax authorities’ review and assessment of treaty claims is 30 days upon receipt of sufficient documents. The tax authority is
required to issue a decision that approves the amount of tax eligible for exemption/reduction or notifies in writing to taxpayers the reasons for
any rejection of the claim. This timeline can be extended for 10 days where the tax authority needs to conduct further examination to confirm the
position. This could remove the current uncertainty in applying tax treaty benefits of foreign companies.
FCT (%)
Recipient
Interest Royalties
Non-treaty 5 10
Treaty:
Algeria (1, 2) 15 15
Australia 10 10
Austria (2) 10 7.5/10
Azerbaijan (2) 10 10
Bangladesh (2) 15 15
Belarus (2) 10 15
Belgium (2) 10 5/10/15
Brunei Darussalam (2) 10 10
Bulgaria (2) 10 15
Cambodia (2) 10 10
Canada (2) 10 7.5/10
China (2) 10 10
Croatia 10 10
Cuba 10 10
Czech Republic (2) 10 10
Denmark (2) 10 5/15
Egypt (1) 15 15
Estonia 10 7.5/10
Finland (2) 10 10
France 0 10
Germany (2) 10 7.5/10
Hong Kong (2) 10 7/10
Hungary 10 10
Iceland (2) 10 10
India (2) 10 10
Indonesia (2) 15 15
Iran (2) 10 10
Ireland (2) 10 5/10/15
Israel (2) 10 5/7.5/15
Italy (2) 10 7.5/10
Japan (2) 10 10
Kazakhstan (2) 10 10
Korea (North) (2) 10 10
Korea (South) (2) 10 5/15
Kuwait (2) 15 20
Laos 10 10
Latvia (2) 10 7.5/10
Luxembourg 10 10
Macau (2) 10 10
Macedonia (1) 10 10
Malaysia (2) 10 10
Malta (2) 10 5/10/15
Mongolia (2) 10 10
Morocco (2) 10 10
Mozambique 10 10
Myanmar (2) 10 10
Netherlands (2) 10 5/10/15
New Zealand 10 10
Norway (2) 10 10
Oman (2) 10 10
Pakistan (2) 15 15
Palestine 10 10
Panama 10 10
Philippines (2) 15 15
Poland 10 10/15
Portugal (2) 10 7.5/10
Qatar (2) 10 5/10
Romania (2) 10 15
Russia 10 15
San Marino 10/15 10/15
Saudi Arabia (2) 10 7.5/10
Serbia (2) 10 10
Seychelles 10 10
Singapore (2) 10 5/10
Slovakia (2) 10 5/10/15
Spain (2) 10 10
Sri Lanka (2) 10 15
Sweden (2) 10 5/15
Switzerland 10 10
Taiwan 10 15
Thailand (2) 10/15 15
Tunisia (2) 10 10
Turkey (2) 10 10
Ukraine (2) 10 10
United Arab Emirates (2) 10 10
United Kingdom (2) 10 10
United States (1, 2) 10 5/10
Uruguay 10 10
Uzbekistan (2) 10 15
Venezuela (2) 10 10
Notes
1. The treaty is not yet in force.
2. Interest earned by certain government bodies is exempt from WHT. In most cases, the limits set by the DTA are higher than the present
withholding rates under domestic law; consequently, the domestic rates will apply.
Corporate - Tax administration

Taxable period
The standard tax year is the calendar year. However, different accounting year-ends can be used if approval is obtained from the authorities.
Tax returns
The annual final CIT return and the audited financial statements must be filed no later than the last day of the third month as of the ending date of
a calendar year or a financial year.
Payment of tax
Enterprises are required to make quarterly provisional CIT payments (no later than the 30th day of the next quarter) based on the quarterly
business results. The total provisional CIT payment of 4 quarters of a tax year must not be less than 80% (“80% rule”) of the total CIT liability for
the year. Any shortfall will be subject to late payment interest, counting from the deadline for payment of the quarter 4 provisional CIT liability.
Final payment of CIT is due with the final CIT return (i.e. the last day of the third month as of the ending date of a calendar year or a financial
year).
Penalties
There are detailed regulations setting out penalties for various tax offences. These range from relatively minor administrative penalties to tax
penalties amounting to various multiples of the additional tax assessed.
In practice, imposition of penalties has been arbitrary and inconsistent. However, in recent periods there has been a much tougher stance
adopted by the tax authorities. Hence, where tax is paid late (e.g. as a result of a tax audit investigation), there is a significant likelihood of
penalties being imposed.
Tax audit process

Tax audits are carried out regularly and often cover a number of tax years. Prior to an audit, the tax authorities send the taxpayer a written notice
specifying the timing and scope of the audit inspection.
Statute of limitations
The general statute of limitations for imposing tax is ten years and for penalties is five years. Where the taxpayer does not register for tax or
commits evasion liable to criminal prosecution, the tax authorities can collect unpaid tax and penalties at any time.
Topics of focus for tax authorities

Transfer pricing
Transfer pricing is commonly discussed in the press, and the enterprises that are attracting the attention of the tax authority are generally
multinational companies that have many inter-company transactions, have reported losses for many years, and/or are expanding businesses.
CIT incentives
The regulations on the conditions to enjoy CIT incentives are complicated. The guidance to classify new investment and investment expansion
(these are subject to different incentive regimes) is not entirely clear. In addition, the ability to apply tax incentives is conditional on compliance to
the strict accounting system requirements. Taxpayers are required to self-assess their eligibility to the tax incentives. The tax authorities therefore
in tax audits focus on reviewing the taxpayers’ fulfilment of the conditions.
Documentation of expenses
The tax authorities are strictly reviewing the documentation of expenses, including contracts, invoices, evidence of work done/benefit received,
etc. Insufficient documentation is resulting in disallowance of input VAT credit/refund and CIT deductibility.
FCT on supply of goods

The customs authority has been requested to provide the tax authority with information of companies engaged in in-country import/export
transactions in an effort to collect under-declared FCT arising from these transactions.
Secondment arrangements
We have seen the tax authority seek to impose FCT on reimbursements of expatriate remuneration costs by Vietnamese entities. Companies
need to ensure that supporting documents are available to show amounts have been reimbursed at cost.
Corporate - Other issues

Foreign investment restrictions
In several fields, foreign investment will not be licensed or will only be licensed under special conditions. In accordance with the 2020 Law on
Investment, a decree was issued that provides the lists of business sectors where market access by foreign investors is not allowed or allowed
with certain conditions.
Exchange controls
All buying, selling, lending, and transfer of foreign currency needs to be made through credit institutions and other financial institutions
authorised by the State Bank of Vietnam (SBV).
Outflow of foreign currency by transfer is authorised for certain transactions, such as payments for imports and services abroad, refund of loans
contracted abroad and payment of interest accrued thereon, transfer of profits and dividends, and revenues from transfer of technology.
All monetary transactions in Vietnam must be undertaken in Vietnamese dong. Exceptions are applicable to payments for exports made between
principals and their agents, and payments for goods and services purchased from institutions authorised to receive foreign currency payments
such as for air tickets, shipping and air freight, insurance, and international communications.
Forms of doing business

According to the Law on Enterprises, a foreign-invested enterprise may be established as either a single member limited liability or a limited
liability with more than one member, a joint-stock company, or a partnership.
Intellectual property (IP)

IP rights are protected by the Civil Code (1995 and 2005), the Law on Intellectual Property (2005, amended 2009), and a host of subordinate
legislation.
Vietnam is signatory to the Paris Convention, the Madrid Agreement on International Trademark Registration, and the Patent Cooperation Treaty,
and is a member of the World Intellectual Property Organisation. Vietnam has entered into an agreement on copyrights with the United States
(US). According to the Vietnam-US Bilateral Trade Agreement, Vietnam is further under the obligation to adhere to the Berne Convention.
Vietnam’s National Assembly ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP) on 12 November
2018. Under the CP-TPP, Vietnam has five years from the effective date of this agreement to update its Law on Intellectual Property to be
consistent with the CP-TPP provisions.
On 14 June 2019, the National Assembly ratified Law No. 42/2019/QH14 amending both the Law on Intellectual Property and the Law on
Insurance Business.
The IP Law was amended to reflect Vietnam’s commitments under CP-TPP regarding different aspects of IP, including inventions, geographical
indications, trademarks, measures against abuse of IP protection procedures, and measures to enforce IP rights. The amended IP Law was
effective from 1 November 2019, except for certain cases, where the new regulations were retroactively effective from 14 January 2019 (i.e. when
the CP-TPP came into effect in Vietnam).
A draft law amending the current IP Law has been in discussion, which aims, inter alia, to improve the efficiency of IP rights protection activities
and to ensure the implementation of Vietnam's international commitments on IP protection.
COVID-19 pandemic
Similar to previous years, the government released a decree providing the extension of deadlines for payment of taxes and land rental fee
applicable for the 2022 tax year for certain industries (with some exceptions).
Vietnam contacts
Dinh Thi Quynh Van
People and Organisation Partner, PwC Vietnam
+84 4 3946 2246
Nguyen Huong Giang

Tax Controversy and Dispute Resolution Partner, PwC Vietnam
+84 4 3946 2246
© 2017 - 2023 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see
www.pwc.com/structure for further details.

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Vietnam - Corporate Summary

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Vietnam - Corporate Summary 27/06/2023, 23:20

Corporate - Signiﬁcant developments

Taxing e-commerce activities

Various guidance for the new Law on tax administration

See section E-invoices.

Other key laws

Corporate - Taxes on corporate income

Calculation of taxable profit

Local income taxes

Corporate - Corporate residence

Permanent establishment (PE)

Corporate - Other taxes

Transfer of investment projects with certain conditions.

Collections of compensation/indemnities by insurance companies from third parties.

Exempt goods and services

The FTA between ASEAN member states.

The FTA between ASEAN member states and Japan.

The FTA between ASEAN member states and China.

The FTA between ASEAN member states and India.

The FTA between ASEAN member states and Korea.

The FTA between Vietnam and Korea.

The FTA between Vietnam and Chile.

Import VAT is applied to imported goods at a rate most commonly of 10%.

Special sales tax (SST)

Corporate - Green Taxes and Green Incentives Landscape

Below are some common types of green taxes.

Natural Resource Taxes (NRT)

Environment Protection Taxes (EPT)

Carbon Emission Quota

Corporate - Branch income

Corporate - Income determination

Other significant items

Interest on loans that has been capitalised is not deductible.

Fines and penalties

Other significant items

Certain expenses directly related to the issuance, purchase, or sale of shares.

Net operating losses

Payments to foreign affiliates

Corporate - Group taxation

Related party definition

Transfer pricing methodologies

Tightening of the acceptable arm’s-length range

Transfer pricing declaration forms

Transfer pricing documentation

Transfer pricing audits

30% EBITDA cap on total interest expense

Advance Pricing Agreements (APAs)

Controlled foreign companies (CFCs)

Corporate - Tax credits and incentives

Inbound investment incentives

the products support the high technology sector; or

Research and Development (R&D) Fund

Corporate - Withholding taxes

Payments to foreign contractors

Restaurant, hotel, and casino management services 5 10

Construction, installation without supply of materials, machinery, or equipment 5 2

Construction, installation with supply of materials, machinery, or equipment 3 2

Royalties Exempt/5 (4) 10

Transfer of securities Exempt 0.1

Financial derivatives Exempt 2

3. International transportation is subject to 0% VAT.

Royalties, licence fees, etc.

Management fees and head office charges/services