2. Profit tax
1. The tax rate of 10 per cent shall be applied to cooperative and wholly foreign-owned enterprises engaging in the following types of projects: (1) exploitative forest plantations; (2) construction of national infrastructure, including transportation facilities, electric power production and supply facilities, construction of communication facilities in export-processing zones, centralized industrial zones, mountainous areas and underdeveloped areas; (3) construction of telecommunications facilities in the country's industrial estates; and (4) construction of a new industrial estate in the region, which is to be built on the land of the People's Republic of China (PRC). (3) Construction of communication facilities in export processing zones, centralized industrial zones, mountainous areas and underdeveloped regions; (3) Special projects that are periodically announced by the State Committee for Cooperation and Investment. 2. Various types of investments subject to 15% tax rate: (1) Natural resources development; (2) Investments in underdeveloped areas; (3) Long-term forest plantation for commercial purposes; (4) Investment projects in which the foreign party transfers the equipment to the Vietnamese party at no cost at the termination of the contract; (5) Investments in heavy industry projects, including fertilizer production, metal smelting, machinery manufacturing, cement production, electrical machinery, and so on. Manufacturing, cement production, electrical machinery manufacturing, medical equipment production, basic chemical varieties; (6) Infrastructure investment in areas where the 10% tax rate does not apply. 3. The 20% tax rate applies to investment projects that meet the following two conditions: (1) at least 80% of the products are exported; (2) the agreed or actual capital utilized is at least US$10 million; (3) at least 500 Vietnamese employees are employed; (4) projects that meet the advanced technologies listed in the fourth paragraph of the Law on Technology Transfer. 4. Items subject to the 25% tax rate: Finance, insurance, consulting, accounting, auditing, commerce, hotels and other service industries. 5. Projects subject to a tax rate of 25% or more: Oil and gas exploration, development, smelting, and the development of rare natural resources. The State Committee for Cooperation and Investment, when approving investment licenses, will determine the specific tax rate applicable to each project, depending on the conditions of exploitation of the project and the abundance of natural resources. 6. Deductible expenses: cost of goods sold, salaries, depreciation, operating expenses, administrative expenses, all types of taxes (except income tax), insurance premiums, interest expense, other expenses (totaling no more than 5% of total expenses), and losses (carried forward for up to five years).Third, import and export tariffs
Vietnam's Law on Import and Export stipulates that foreign-invested enterprises and cooperative projects are exempted from import and export tariffs, but import tariffs and business taxes must be levied on imported goods if they are sold in Vietnam. Foreigners can apply for export tariff concessions when applying for business or investment licenses.4. Withholding tax
Foreign investors are required to pay withholding tax when they remit profits abroad. 1. If the registered capital of the investment is less than 5 million dollars, the applicable tax rate is 10%; 2. If the registered capital of the investment is between 5 million and 10 million dollars, the applicable tax rate is 7%; 3. If the registered capital of the investment is more than 10 million dollars, the applicable tax rate is 5%.V. Business Tax and Special Consumption Tax
All enterprises and foreign partners engaged in the operation or sale of goods in Vietnam must pay business tax or special consumption tax. Business tax is levied in the areas of resource extraction, manufacturing and sales of products, construction, transportation, commerce, and services. The rate of business tax is 0-35%, but the rate for shipping agency is as high as 40%, and the tax is not applicable to export products and agricultural production. Special consumption tax is levied on tobacco, wine, beer and firecrackers at a rate of 25% to 100%, based on the manufacturer's sales price ÷ (1 + tax rate), and no sales tax is levied on the production of products subject to special consumption tax. For oil, natural gas and some rare resources, in addition to the profit tax of more than 25%, there is a resource tax of 1% to 40%. However, if you cooperate with foreigners as an investment on the Vietnamese side, you are exempted from resource tax. The contract tax is imposed on companies or individuals who make profits from operations through contracts with Vietnam-based organizations. A tax rate of 4% or 8% on the total contract cost is applied to companies, and a personal income tax rate is applied to individuals.VI. Export Processing Zones (EPZs)
Vietnam decided to set up EPZs at the beginning of 1988, and in October 1991, the regulations on EPZs were promulgated. So far, the Council of Ministers of Vietnam has officially approved the establishment of EPZs in Ho Chi Minh City, Da Nang City and Hai Phong City. 1. The income tax rate for production enterprises in EPZs is 10% and they are exempted from income tax for 4 years from the date of profitability of the enterprises; 2. For service enterprises, the income tax rate is 15% and they are exempted from income tax for 2 years from the date of profitability of the enterprises; 3. Business tax for enterprises that have started operation is exempted from business tax for 2-3 years; 4. Equipment, materials, raw materials and commodities that are imported by enterprises in EPZs from foreign countries are exempted from business tax. Equipment, materials, raw materials and commodities imported from foreign countries are exempted from import tax; 5. Export of goods and products to foreign countries are exempted from export tax.