Foreign Direct Investment (FDI) enterprises operating in Vietnam must navigate a complex tax reporting landscape. This comprehensive guide outlines the essential requirements, procedures, and deadlines for tax declarations in 2025
FDI enterprises in Vietnam are subject to various tax reporting obligations that require regular submissions to local tax authorities. Understanding these requirements is crucial for maintaining compliance and avoiding penalties.
Key Tax Reports Required:
Value Added Tax (VAT) declarations
Corporate Income Tax (CIT) returns
Foreign Contractor Tax reports
Personal Income Tax declarations for employees
2. Types of Mandatory Tax Reports
2.1 Value Added Tax (VAT) Reports
VAT reporting is a fundamental obligation for FDI enterprises in Vietnam. The reporting frequency depends on the company's declaration method: (Article 3 of the VAT Law; Clause 1, Article 8; Article 9 of Decree No. 126/2020/ND-CP, as amended)
Monthly VAT Declaration: Required for businesses with annual revenue exceeding VND 50 billion
Quarterly VAT Declaration: Applicable for enterprises with annual revenue below VND 50 billion
2.2 Corporate Income Tax Reports
CIT reporting includes both provisional and final declarations: (Article 3 of the Corporate Income Tax Law; Clause 6, Article 8 of Decree No. 126/2020/ND-CP, as amended; Article 7 of Circular 78/2014/TT-BTC, as amended; Clause 3, Article 17 of Circular 80/2021/TT-BTC, as amended)
Quarterly provisional CIT payment: No later than the last day of the first month of the following quarter.
Annual CIT finalization: No later than the last day of the third month after the end of the calendar or fiscal year.
2.3 Foreign Contractor Tax Reporting
(Articles 4 and 5 of Circular 103/2014/TT-BTC)
Foreign contractors and foreign subcontractors that are business entities are subject to value-added tax (VAT) and corporate income tax (CIT) obligations.
Foreign contractors and foreign subcontractors that are individuals engaged in business activities are subject to VAT and personal income tax (PIT) obligations in accordance with PIT regulations.
For other taxes, fees, and charges, foreign contractors and foreign subcontractors must comply with the applicable legal provisions on taxes, fees, and charges in effect.
2.4 Personal Income Tax for Employees
(Articles 8 and 9 of Decree 126/2020/NĐ-CP)
For monthly PIT declarations: The enterprise must declare PIT based on the tax liabilities incurred in that specific month.
If an enterprise meets the conditions to declare VAT on a quarterly basis, it is also allowed to choose to declare PIT quarterly.
3. Tax Declaration Deadlines
Meeting submission deadlines is crucial for maintaining tax compliance:
3.1 Tax Return Submission Deadlines
(Clause 1, Article 44 of the Law on Tax Administration)
For monthly declarations: No later than the 20th of the following month.
For quarterly declarations: No later than the last day of the first month of the following quarter.
3.2 Tax Payment Deadlines
(Clause 1, Article 55 of the Law on Tax Administration)
The tax payment deadline is the same as the tax return submission deadline.
In cases of amended tax returns, the tax payment deadline follows the original return period in which the error occurred.
4. Documentation Requirements
Accurate and complete documentation is essential to support tax declarations.
4.1 Corporate Income Tax Finalization Documents
CIT finalization return (Form No. 03/TNDN issued with Circular 80/2021/TT-BTC)
Annual financial statements, including:
Balance sheet (Form No. B01-DN in Appendix 02 issued with Circular 200/2014/TT-BTC)
Income statement (Form No. B02-DNN in Appendix 02 issued with Circular 200/2014/TT-BTC)
Cash flow statement (both direct and indirect methods) (Form No. B03-DN in Appendix 02 issued with Circular 200/2014/TT-BTC)
Financial statement notes (Form No. B09-DN in Appendix 02 issued with Circular 200/2014/TT-BTC)
Power of attorney if the person submitting the report is not the legal representative of the company.
Additional supporting documents based on the company's actual business operations.
4.2 Value-Added Tax (VAT) Reporting Documents
The required VAT declaration documents depend on the VAT calculation method:
1. VAT declaration under the direct method on revenue:
Regardless of whether the company declares VAT monthly, quarterly, or per occurrence, it must submit a VAT return (Form No. 04/GTGT issued with Circular 80/2021/TT-BTC).
2. VAT declaration under the direct method on value-added:
Companies engaged in trading, processing, or manufacturing gold, silver, and precious stones must declare VAT under this method and submit a VAT return (Form No. 03/GTGT issued with Circular 80/2021/TT-BTC).
3. VAT declaration under the credit method:
For businesses engaged in production and trade:
Monthly/quarterly VAT return (Form No. 01/GTGT in Appendix II issued with Circular 80/2021/TT-BTC).
VAT allocation appendix for tax payable to localities for hydropower activities (Form No. 01-2/GTGT in Appendix II issued with Circular 80/2021/TT-BTC).
VAT allocation appendix for tax payable to localities for online lottery business activities (Form No. 01-3/GTGT in Appendix II issued with Circular 80/2021/TT-BTC).
VAT allocation appendix for tax payable to localities (Form No. 01-6/GTGT in Appendix II issued with Circular 80/2021/TT-BTC) (excluding hydropower and online lottery).
Provisional VAT declaration on revenue (Form No. 05/GTGT in Appendix II issued with Circular 80/2021/TT-BTC) for businesses engaged in real estate transfers in a different province than their registered headquarters.
For investment projects eligible for VAT refunds: VAT return (Form No. 02/GTGT in Appendix II issued with Circular 80/2021/TT-BTC).
4.3 Personal Income Tax (PIT) Filing Dossier
(Appendix I - List of tax filing dossiers issued with Decree 126/2020/NĐ-CP)
1. For enterprises withholding tax on salary and wages, the required dossier includes:
PIT withholding declaration form No. 05/KK-TNCN, as prescribed in Appendix I issued with Decree 126/2020/NĐ-CP.
Supplementary table for determining PIT payable to localities entitled to revenue sources, using form 05-1/PBT-KK-TNCN from Appendix I issued with Decree 126/2020/NĐ-CP (applicable to employees working at dependent units or business locations in provinces different from the enterprise's headquarters).
2. For enterprises withholding tax on income from capital investment, royalties, securities transfer, franchising, lottery winnings, etc., the required dossier includes:
PIT withholding declaration form No. 06/TNCN, as prescribed in Appendix I issued with Decree 126/2020/NĐ-CP.
Supplementary table detailing individuals with taxable income in the tax year, using form 06-1/BK-TNCN (to be included in the tax declaration for the final month/quarter of the tax year).
For enterprises withholding tax on income from lottery winnings, form 05-1/PBT-KK-TNCN from Appendix I issued with Decree 126/2020/NĐ-CP applies.
3. For enterprises withholding tax for individuals who directly sign multi-level marketing agent contracts, the required dossier includes:
PIT withholding declaration form No. 01/XSBHĐC, as prescribed in Appendix I issued with Decree 126/2020/NĐ-CP (applicable to multi-level marketing enterprises paying commissions to individuals who directly sign agency contracts at listed prices).
Supplementary table detailing individuals generating revenue from multi-level marketing agency contracts, using form 01-1/BK-XSBHĐC (to be included in the tax declaration for the final month/quarter of the tax year).
5. Electronic Tax Filing System
Vietnam has modernized its tax filing system through the implementation of electronic submissions:
Online Filing Platform: The introduction of an electronic portal allows businesses and individuals to submit tax documents online quickly, conveniently, and time-efficiently. Instead of visiting the tax authority in person, taxpayers can log into the system, upload documents, and track the processing status, creating a transparent and efficient transaction process.
Digital Signature Authentication: The e-tax filing system integrates digital signature authentication to ensure the authenticity and security of submitted documents. Digital signatures verify the taxpayer’s identity and guarantee that documents remain unchanged after signing, fostering trust between businesses and tax authorities.
Real-Time Validity Check: Modern systems are equipped with tools to check the validity of submitted documents in real time. This enables businesses to quickly identify errors, omissions, or non-compliance with required formats, allowing timely corrections before official processing. The automated real-time checking process helps minimize mistakes and improve data accuracy.
Automated Calculation Tools: Advanced e-tax systems can automatically calculate payable tax amounts based on the entered data. This feature saves businesses time, reduces the risk of errors caused by manual calculations, and ensures tax declarations comply accurately with legal regulations.
6. Common Reporting Challenges and Solutions
FDI enterprises often face several challenges in tax reporting:
Language Barriers: FDIs operating in Vietnam must prepare tax reports in Vietnamese using legal terms and formats. This can be challenging for staff unfamiliar with the Vietnamese legal language. To address this, businesses often engage bilingual tax experts or professional translation services to ensure reports are accurately drafted, comply with regulations, and minimize errors.
Complex Regulations: Vietnam’s tax laws are complex and frequently updated. FDIs must stay informed and apply the latest regulations correctly. To manage this, businesses should maintain regular consultations with professional tax advisors to stay up to date with regulatory changes, ensuring smooth tax filing and compliance with legal requirements.
System Technical Issues: E-tax filing relies on information technology systems, which may encounter technical errors, leading to late submissions or data inaccuracies. To mitigate this, businesses should have backup plans, such as storing hard copies of submitted reports or using alternative technological solutions to ensure timely filing in case of system failures.
7. Compliance Tips and Best Practices
To ensure smooth tax reporting:
Maintain Organized Financial Records: Systematically storing financial records makes it easier for businesses to retrieve, verify, and reconcile necessary data for tax filings. This ensures financial information is accurate and up to date, reducing errors in tax reports and facilitating audits by tax authorities.
Set Internal Reminders for Reporting Deadlines: Establishing clear reporting deadlines and using internal reminder systems (via email, task management software, or calendars) helps businesses meet submission deadlines. This is especially important given the varying deadlines for different tax reports (VAT, CIT, PIT, etc.), preventing late or missed submissions and avoiding penalties.
Provide Regular Employee Training on Tax Requirements: Keeping staff informed about tax regulations is essential to ensuring that those responsible for tax reporting understand legal requirements, calculations, and procedures. Regular training enhances expertise and compliance awareness, reducing errors in tax filings.
Engage Tax Experts When Needed: When facing complex tax issues or frequent regulatory changes, working with tax experts helps businesses stay updated on legal changes, resolve concerns, and ensure reports comply with current regulations. Professional tax support optimizes the filing process while reducing the risk of administrative penalties from tax authorities.
8. Conclusion
Successful tax reporting for FDI enterprises in Vietnam requires careful attention to detail, timely submissions, and proper documentation. Stay informed about regulatory changes and seek professional assistance when necessary to ensure full compliance with Vietnamese tax laws.
Important Note: This guide provides general information about tax reporting requirements. For specific advice, consult with qualified tax professionals or the local tax authorities.
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