The value added tax, simply known as the VAT, is one of the most important indirect levies in Vietnam. In order to collect it, a company must first go through VAT registration in Vietnam. This requirement applies to both local and foreign companies.
Below, our lawyers explain how to apply for a VAT number in Vietnam. We are at your disposal with various legal services, among which tax and VAT registration which is part of the business incorporation package we provide to foreign investors.
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VAT registration in Vietnam for foreign companies
Foreign companies have two ways of expanding their companies in Vietnam – through subsidiaries and branch offices. Both business forms are required to register for VAT in Vietnam as soon as they are incorporated, as the country does not provide for a voluntary procedure.
The Vietnamese VAT number can be obtained within 10 days of the business registration certificate’s issuing. Here are the documents to draft in order obtain a VAT certificate in Vietnam in 2024:
- the standard application form;
- information about the company (the tax identification code and business license);
- details about the parent company.
There is no need for foreign companies to appoint local representatives when or after completing VAT registration in Vietnam in 2024.
Our immigration lawyers in Vietnam can come to the aid of foreign investors who want to establish companies and settle here in order to run their businesses.
We can also offer support in immigration to Vietnam. Our lawyers are at your disposal with various services, among which securing temporary and permanent residence permits. These can be acquired under completely different conditions, which is why it is best to use specialized support for each case.
There are several ways to obtain Vietnamese residency. Employment is one of the safest ways to move here, as the labor contract will ensure an income, as well as the chance to decide if the country suits the desire of the foreigner to remain here. For legal support in moving here, please contact us.
How to register for VAT in Vietnam as a local company
The VAT number in Vietnam is the same as the company’s tax identification number and it must be registered within 10 days just like in the case of foreign companies. In order words, the tax authorities here do not make any differences between the obligations of domestic and overseas enterprises to register for this tax. Furthermore, there is no voluntary procedure or minimum taxable amount that requires VAT registration.
Our law firm in Vietnam can offer assistance in registering for VAT. We are also at your disposal with support in immigration to Vietnam if you want to establish yourself here.
Apart from our legal services, we also have Vietnamese accountants in our team. They are here to complete our solutions dedicated to companies and foreign investors who need to understand how the taxation system of this country works. So, contact us if you need accounting support for your local or foreign firm.
VAT rates in Vietnam in 2024
Prior to this, in 2022, the government enacted Decree 15/2022/ND-CP mandating a reduction in value added tax (VAT) for a select number of goods and services that are subject to a 10% VAT rate. The Government has not yet declared a further extension of the decrease of the value-added tax rate, therefore as of January 1, 2023, the value-added tax rate has changed back to the standard tax rate.
Generally speaking, monthly VAT filings must be made by the 20th of the month following the reporting period. Another need might be annual reports. Tax bills must be sent, although electronic bills are not yet accepted. The Ministry of Finance is in charge of invoices through the Tax Department.
Here are the rates of the VAT in Vietnam for 2024, as applied by the General Tax Department:
- the standard rate for most taxable products and services is 10%;
- a 15% rate applies to luxury products;
- a 5% reduced rate is levied on foodstuff, transportation, medical supplies, agricultural services and products;
- a 0% rate applies to exports and related services, agricultural machinery, fertilizers, and animal feed.
Feel free to address our lawyers in Vietnam for information on how to open a company and register for taxation and VAT in this country.
VAT compliance in Vietnam
After completing the procedure for VAT registration in Vietnam, a company must comply with certain requirements.
Monthly VAT returns in Vietnam must be filed and paid by the 20th of the following month. Quarterly reporting is also permitted for taxpayers with an annual revenue of less than VND 50 billion in the previous year, as well as for new companies. In their case, the income must be declared and paid by the 30th of the following month at the end of each quarter. The monthly or quarterly VAT rate must be consistently applied throughout the whole fiscal year.
According to the Law on Tax Administration, VAT taxpayers who have a place of business in a municipality or province with a suitable IT infrastructure must submit their tax returns and/or report their VAT online.
Special VAT reduction for 2024
A Government Decree 94/2023, which outlines the procedures for implementing the 2% VAT rate cut from the 1st of January to 30th June 2024, was released on December 28, 2023. This comes after the 2% VAT rate cut was approved by the Vietnam National Assembly on November 29, 2023, and extended for an additional six months starting on January 1st, 2024.
The extended 2% VAT reduction for the first half of 2024 covers the same goods and services as the 2% VAT reduction already in effect in 2023, with the exception of a few industries like real estate trading, banking, securities, insurance, telecommunications, financial services, and products made from metal, mining products (save for coal mining), coke mining, refined petroleum, chemical products, commodities and services subject to special consumption tax, and information and technology services.
If you need legal or tax-related support, do not hesitate to contact our lawyers in Vietnam. We are at your disposal with tailored solutions for tax and VAT registration in Vietnam in 2024.