Tax policy
Official Letter No. 3705/CT-CS dated 5 June 2026 issued by the Tax Department on tax policy
Where an enterprise incurs expenses that violate applicable specialised laws and regulations, such expenses are non-deductible for the purpose of determining taxable income for Corporate Income Tax ("CIT") purposes, in accordance with Clause 23, Article 10 of Government Decree No. 320/2025/ND-CP. The declaration and crediting of input Value Added Tax ("VAT") shall be subject to Article 23 of Decree No. 181/2025/ND-CP and Article 14 of the Law on Value Added Tax No. 48/2024/QH15.
Compliance with obligations relating to Country-by-Country Reporting
- Notification of the effective status of the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports ("CbC MCAA") with respect to Vietnam, together with the list of countries and jurisdictions that have established effective CbC exchange relationships with Vietnam, as set out in the Appendix attached to this Official Letter.
- Where a taxpayer in Vietnam has an Ultimate Parent Entity ("UPE") located overseas that is required to file a Country-by-Country Report under the regulations of its jurisdiction of residence and falls within the scope of CbC exchange under the CbC MCAA with the countries and jurisdictions specified in Item 1 of this Official Letter, the tax authority shall receive the Country-by-Country Report through the automatic exchange of information mechanism under international tax agreements to which Vietnam is a party, and shall not accept Country-by-Country Reports submitted by taxpayers in hard copy or through other means.
Summary of the Appendix attached to the Official Letter:
- From Vietnam to the following countries/jurisdictions: Australia, Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Estonia, France, Germany, Greece, Iceland, India, Ireland, Italy, Japan, Korea, Luxembourg, Malaysia, Malta, the Netherlands, Norway, Peru, Poland, Portugal, Singapore, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Thailand and the United Kingdom: the CbC MCAA has been activated.
- From Vietnam to the following countries/jurisdictions: Latvia, China, Croatia, Hong Kong (China) and the Russian Federation: the CbC MCAA has been activated and is effective for tax periods commencing on or after 1 January 2024.
(Official Letter No. 3870/CT-CS dated 10 June 2025 issued by the Tax Department)
VAT and invoicing for labour outsourcing services
Where an enterprise is granted a licence for labour outsourcing activities by the Ministry of Labour, Invalids and Social Affairs (now the Ministry of Home Affairs), enters into contracts directly with employees but does not directly utilise such employees, instead outsourcing the employees to other enterprises, agencies, organisations, cooperatives or individuals and receiving a service fee for the labour outsourcing services; where the employees work at the hiring entity, are subject to the management and direction of the labour-hiring entity, and receive salaries and other benefits in accordance with the policies of the labour-hiring entity; and where, on a monthly basis, the labour-hiring entity transfers money to the labour outsourcing enterprise to pay salaries, bonuses, allowances and subsidies and to calculate and pay social insurance, health insurance, unemployment insurance and trade union fees for the employees, the amounts transferred by the labour-hiring entity to the labour outsourcing enterprise for payment of salaries, bonuses, allowances and subsidies and for the calculation and payment of social insurance, health insurance, unemployment insurance and trade union fees for the employees are in the nature of collections and payments on behalf of others, rather than revenue earned by the labour outsourcing enterprise, and are therefore not subject to declaration and payment of VAT in accordance with Point (d), Clause 7, Article 5 of Circular No. 219/2013/TT-BTC dated 31 December 2013 issued by the Ministry of Finance.
Where the requirements governing labour outsourcing activities under labour regulations are not satisfied, or where the labour outsourcing enterprise does not separately determine each type of service, including amounts collected and paid on behalf of others, in order to apply the corresponding VAT rates, VAT must be calculated and paid at the highest VAT rate applicable to these services in accordance with Article 11 of Circular No. 219/2013/TT-BTC dated 31 December 2013 issued by the Ministry of Finance.
(Official Letter No. 4180/CT-CS dated 23 June 2026)
VAT treatment of remote technical support services
Based on the description provided by iTechwx Co., Ltd., where the Company provides remote technical support services to Microsoft Ireland Operations Limited, if the Company has supporting records and documentation demonstrating that the services are consumed outside Vietnam and satisfies the conditions for application of the 0% VAT rate prescribed in Articles 17 and 18 of Government Decree No. 181/2025/ND-CP dated 1 July 2025, the services shall be subject to the 0% VAT rate.
The Company shall prepare the relevant supporting documentation and complete the procedures for applying the 0% VAT rate in accordance with Article 4 of Circular No. 69/2025/TT-BTC dated 1 July 2025 issued by the Ministry of Finance.
(Official Letter No. 4253/CT-CS dated 24 June 2026 issued by the Tax Department)
