Corporate Tax Planning for Businesses in Vietnam in 2024

FromDezanShira&Associates Issue57•March2024|www.vietnam-briefing.com CorporateTaxPlanningforBusinessesinVietnamin2024 CorporateTaxesinVietnam Vietnam’sImplementationoftheGlobalMinimumTax TaxIncentivesforBusinessEnterprisesinVietnam Pg04 Pg09 Pg14 Introduction ALBERTOVETTORETTI Partner DezanShira&Associates V ietnamboastsawell-structuredandtransparenttaxandaccountingcomplianceframework,surpassingmanycomparableemergingmarkets.Thenationregularlyrevisesitspoliciestobolstereconomicandbusinessgrowth.CorporateIncomeTax(CIT)constitutesaprimarylevyoncompanies'profits,calculatedasgrossrevenueminusexpenses.MostbusinessesinVietnamfaceastandardCITrateof20percent.Thisencompassesentitiesacrossalleconomicsectors,professionalbodies,and foreigncorporationsengagedinproductionandtradewithinVietnam. Yet,Vietnamhasenjoyedglobalinvestorfavorbecauseofitsarrayofinvestmentincentives,amidstwhichtaxbreaksareakeyfeature.Theseincentivestargetspecificsectors,regionswithvaryingsocio-economicconditions,aswellashigh-techandeconomiczones.Theiraimistostimulateeconomic,technological,andeducationaladvancementwithintheseareas.Now,tocomplywiththeOECD’sglobalanti-baseerosion(GloBE)ModelRules,Vietnamissettoapplyatop-upcorporatetaxfrom2024,affectingaround122foreigncompaniesperthegovernment’sestimates. ThiseditionoftheVietnamBriefingmagazinediscussesVietnam’scorporatetaxstructurefor2024,keychanges,incentivesavailableforbusinesses,andexplainsthenewtop-uptaxframework. AsthetaxsituationofeachenterpriseisuniqueandVietnam’sregulatoryenvironmentissubjecttochange,itisadvisabletoseekprofessionaltaxadvicespecifictoyourbusiness.Formoreinformationontax,audit,transferpricing,VAT,andtappingkeyincentivesinVietnam,feelfreetocontactourexpertsonthegroundatvietnam@dezshira.com. Withkindregards, AlbertoVettoretti www.dezshira.com www.asiabriefing.com www.aseanbriefing.com www.china-briefing.com www.india-briefing.com www.vietnam-briefing.com www.middleeastbriefing.com Credits Publisher-AsiaBriefingMediaLtd. LeadEditor-MelissaCyrillKeyContributors-MiaPham,DoanThiYenLuy Designers-AparajitaZadoo,MiguelEnricoAnciano VietnamBriefing·Issue57·March20242 CorporateTaxPlanningforBusinessesinVietnamin2024 Contents Reference VietnamBriefingandrelated titlesareproducedbyAsiaBriefingLtd.,awhollyownedsubsidiary ofDezanShiraGroup.ContentisprovidedbyDezanShira&Associates. CorporateTaxesinVietnam Vietnam’sImplementationoftheGlobalMinimumTax TaxIncentivesforBusinessEnterprisesinVietnam Pg04 Pg09 Pg14 Noliabilitymaybeacceptedforanyofthecontentsofthis publication.Readersarestronglyadvisedtoseekprofessionaladvicewhenactivelylookingtoimplementsuggestionsmadewithinthispublication. Forqueriesregardingthecontentofthismagazine,pleasecontact:editor@asiabriefing.com Allmaterialsandcontents ©2024AsiaBriefingLtd. AnnualSubscription VietnamBriefingMagazineispublishedfourtimesayear.Tosubscribe,pleasevisitwww.asiabriefing.com/store.Andpleaseexploretheclickableresourcesbelow. StrategicAdvisoryandCommentary info@dezshira.com ProfessionalServices www.dezshira.com/services Asiapedia www.dezshira.com/library Legal,Tax,AccountingNews www.vietnam-briefing.com/news Magazines,Guides,Reports www.asiabriefing.com/store PodcastandWebinarwww.dezshira.com/library/search?type=podcast&language AsiaBriefingLtd.Unit507,5/F,ChinachemGoldenPlaza,77ModyRoad,TsimShaTsuiEastKowloon,HongKong. Followus Connectwithusforthelatestnews,eventsandinsightsacrossAsia. LikeVietnamBriefing onFacebook FollowVietnamBriefing onTwitter ConnectwithDezanShira&AssociatesonLinkedin ViewDezanShira&AssociatesonYoutube ScantheQRcodetofollowusonWeChatandgainaccesstothelatestinvestornewsandresources VietnamBriefing·Issue57·March2024 3 Chapter1 CorporateTaxesinVietnam EnsuremeticulousdocumentationandadherencetoregulatoryguidelinestonavigatecorporatetaxcomplianceeffectivelyinVietnam'sdynamicbusinesslandscape. MiaPham Manager CorporateAccountingServices Author C orporateincometax(CIT)isadirecttaximposedontheprofitsearnedbycompanies ororganizations.Generally,profitsaredeterminedasgrossrevenueminusexpenses.Vietnam’sCorporateIncomeTaxLawwasendorsedbytheNationalAssemblyonJune3,2008,andtookeffectonJanuary1,2009.Subsequently,onJune19,2013,LawNumber32/2013/QH13,amendingandsupplementingvariousarticlesoftheLaw,wasratifiedandbecameeffectiveonJanuary1,2014. Taxpayersencompassbusinessentitiesacrossalleconomicsectors,professionalorganizations,andforeigncorporationsengagedinproductionandtradingactivitieswithinVietnam. Presently,enterprisesarenolongerobligatedtofileCITquarterly.However,theyarestillrequiredtomakeprovisionalCITpaymentswithin30daysfollowingthequarter,basedonestimatesderivedfrompreviousyears'businessoutcomes.IfthetotalprovisionalquarterlyCITpaymentsdeviatebylessthan20percentormorethanthepayableamount, the20percentdifferencewillincurlatepaymentinterestfromthefinaldayofpaymentofthefourthquarterlyCITliability. TypesofenterprisessubjecttoCIT ThetypesofenterprisessubjecttocorporatetaxinVietnamaredefinedbyDecreeNo.218/2013/ND-CP. •Loca