1. Annual Income Tax Returns

Taxable Period:

  • Calendar Year: The Vietnamese tax year generally aligns with the calendar year (January 1 to December 31).
  • First Year of Arrival: If you arrived in Vietnam during the calendar year, your first tax year may be shorter, starting from the date of your arrival.

Tax Codes:

  • Obtaining a Tax Code: Individuals with taxable income must obtain a tax code.
  • Employer Submission: For employment income, your employer will typically submit the tax registration file on your behalf.
  • Self-Submission: If you have other sources of taxable income, you must submit your tax registration file to the district tax office where you reside.

Tax Declarations and Payments:

  • Monthly/Quarterly Payments: For employment income, taxes are typically declared and paid provisionally on a monthly or quarterly basis.
  • Year-End Finalization: An annual final tax return must be submitted, and any additional tax liability must be paid.
  • Expatriate Employees: Expatriate employees must finalize their tax obligations upon departure from Vietnam.
  • Non-Employment Income: For non-employment income, taxes are declared and paid on a receipt basis.

Key Points:

  • Timely Filing: Ensure that you file your tax returns and make payments by the specified deadlines.
  • Accurate Reporting: Provide accurate information and documentation to support your tax returns.
  • Tax Refunds: If you have overpaid taxes, you may be eligible for a refund.

It's recommended to consult with a tax professional for specific guidance on your tax situation.

 

2. Quarterly Income Tax Payments

Deadlines:

  • Quarterly Payments: Individuals and businesses with taxable income are generally required to make quarterly income tax payments.
  • Deadlines: The specific deadlines for quarterly tax payments may vary, but they are typically due on the 20th day of the second, third, fourth, and twelfth months of the year.

Estimated Tax Payments:

  • Advance Payments: Taxpayers may be required to make estimated tax payments throughout the year to avoid underpayment penalties.
  • Calculation: Estimated tax payments are based on the taxpayer's projected annual income and tax liability.

Adjustments:

  • Year-End Reconciliation: At the end of the year, taxpayers must reconcile their estimated tax payments with their final tax liability.
  • Adjustments: If the estimated tax payments are insufficient, additional tax may be due. If the estimated tax payments are excessive, a refund may be available.

Record-Keeping Requirements:

  • Documentation: Taxpayers must maintain records of their income, expenses, and tax calculations to support their tax returns and payments.

It's important to understand the quarterly income tax payment requirements and to make timely payments to avoid penalties.

 

3. VAT Returns and Payments

VAT Return Deadlines:

  • Frequency: The frequency of VAT return filing depends on the business's annual revenue and the type of goods or services it sells.
  • Monthly or Quarterly: Smaller businesses may file VAT returns monthly, while larger businesses may be required to file quarterly or even monthly returns.
  • Deadlines: The specific deadlines for VAT returns vary, but they are typically due within a certain period after the end of each tax period (e.g., month or quarter).

Input and Output VAT:

  • Input VAT: Input VAT is the VAT paid on purchases of goods and services used in a business's operations.
  • Output VAT: Output VAT is the VAT collected from customers on the sale of goods and services.
  • Net VAT Payable: The net VAT payable is the difference between output VAT and input VAT.

VAT Payments:

  • Due Dates: VAT payments are typically due within a specified period after the filing of the VAT return.
  • Electronic Payments: VAT payments are often made electronically through government portals.

Record-Keeping Requirements:

  • Detailed Records: Businesses must maintain detailed records of their VAT transactions, including invoices, purchase orders, and bank statements.
  • Supporting Documentation: Supporting documentation may be required for VAT deductions or refunds.

It's important for businesses operating in Vietnam to understand the VAT return and payment requirements and to file their returns and make payments on time to avoid penalties.

 

4. Withholding Tax

Withholding Tax Rates and Obligations:

  • Income Types: Withholding tax applies to various types of income, including wages, salaries, interest, dividends, royalties, and service fees.
  • Withholding Agents: Employers, payers of interest, dividends, royalties, or service fees are generally responsible for withholding tax.
  • Tax Rates: Withholding tax rates vary depending on the type of income and the recipient's tax residency.

Withholding Tax Payments and Reporting Requirements:

  • Monthly or Quarterly Payments: Withholding tax is typically paid on a monthly or quarterly basis.
  • Tax Returns: Withholding agents must report the amount of withholding tax deducted and remitted on their tax returns.
  • Supporting Documentation: Withholding agents may need to provide supporting documentation to verify the accuracy of their withholding tax calculations.

Taxable Income and Exemptions:

  • Taxable Income: The portion of income subject to withholding tax depends on the specific type of income and the applicable tax rules.
  • Exemptions: Certain types of income may be exempt from withholding tax, such as dividends from certain investments or interest income from specific financial instruments.

Both employers and individuals need to understand the withholding tax rules and ensure compliance to avoid penalties.

 

5. Social Security Contributions

Mandatory Contributions:

  • Employment: Individuals employed in Vietnam are generally required to contribute to the social security system.
  • Contribution Rates: Contribution rates are determined by the government and may vary based on factors such as income level and type of employment.
  • Employers' Contributions: Employers are also required to contribute to the social security system on behalf of their employees.

Deadlines:

  • Monthly or Quarterly: Social Security contributions are typically due on a monthly or quarterly basis.
  • Specific Deadlines: The exact deadlines for social security contributions may vary, but they are generally announced by the relevant government agency.

Calculation and Reporting:

  • Wage Basis: Contributions are calculated based on the employee's taxable wage.
  • Reporting Requirements: Employers are responsible for deducting Social Security contributions from employees' salaries and reporting the contributions to the Social Security authorities.

Eligibility for Benefits:

  • Retirement Pension: Contributions to social security may entitle individuals to a retirement pension upon reaching retirement age.
  • Healthcare: Social security may provide access to healthcare benefits.
  • Disability Benefits: In case of disability, individuals may be eligible for disability benefits.

Both employers and employees need to understand the Social Security contribution requirements and ensure compliance to avoid penalties and to be eligible for future benefits.

 

6. Property Taxes

Property Tax Assessment:

  • Periodic Assessments: Property taxes are typically assessed periodically, such as annually or every few years.
  • Valuation Methods: The tax authorities may use various valuation methods to determine the taxable value of a property, including market value, rental value, or cost approach.

Payment Deadlines:

  • Specified Periods: Property tax payments are usually due within a specified period after the tax assessment is issued.
  • Late Payment Penalties: Failure to pay property taxes on time may result in penalties and interest charges.

Exemptions and Deductions:

  • Exemptions: Certain types of properties, such as properties used for charitable or religious purposes, may be exempt from property tax.
  • Deductions: Property owners may be eligible for deductions, such as deductions for property taxes paid on rental properties.

Appeals Process:

  • Dissatisfaction with Assessment: If property owners are dissatisfied with the property tax assessment, they may have the right to appeal the assessment to a higher authority.

It's important for property owners in Vietnam to understand the property tax rules and regulations and to ensure timely payment of taxes to avoid penalties.

 

7. Other Taxes

Excise Tax:

  • Specific Goods: Excise tax is levied on specific goods, such as alcohol, tobacco, and fuel.
  • Tax Rates: Excise tax rates vary depending on the type of good and may be adjusted periodically.
  • Taxable Events: Excise tax is typically imposed on the production, import, or sale of the specified goods.

Environmental Tax:

  • Environmental Impact: Environmental tax is imposed on activities that hurt the environment.
  • Tax Rates: Tax rates vary depending on the type of activity and the level of environmental impact.
  • Revenue Generation: Environmental taxes are often used to generate revenue for environmental protection programs.

Other Taxes:

  • Business Registration Tax: Businesses may be subject to a one-time business registration tax upon establishment.
  • Stamp Duty: Stamp duty may apply to certain legal documents, such as contracts and agreements.

It's important to be aware of other taxes that may apply to your specific situation and to ensure compliance with the relevant tax laws and regulations.

 

8. Tax Audits and Investigations

Tax Audits:

  • Random Selection: Tax authorities may conduct random audits to verify the accuracy of tax returns and ensure compliance with tax laws.
  • Risk-Based Assessments: Taxpayers may be selected for audits based on risk factors, such as inconsistencies in tax returns or unusual financial transactions.
  • Audit Procedures: Tax auditors may examine a taxpayer's financial records, interview employees, and request additional documentation.

Rights of Taxpayers:

  • Access to Records: Taxpayers have the right to access their tax records and to be informed of the reasons for an audit.
  • Fair Treatment: Taxpayers have the right to be treated fairly and respectfully during the audit process.

Potential Penalties:

  • Non-Compliance: Failure to cooperate with a tax audit or to provide accurate information can result in penalties.
  • Underpayment or Non-Payment: If an audit reveals underpayment or non-payment of taxes, the taxpayer may be subject to penalties, including fines and interest charges.

It's important for taxpayers to understand their rights and obligations during tax audits and to cooperate with the tax authorities to avoid penalties.

 

9. Conclusion

Understanding the Vietnamese tax calendar and key deadlines is crucial for individuals and businesses operating in the country. By being aware of the various tax return filing requirements, payment deadlines, and other tax obligations, you can ensure compliance with tax laws and avoid penalties. It's recommended to consult with a tax professional for specific guidance and to stay updated on any changes in tax regulations.
If you need further explanation on this subject, please don't hesitate to contact us through email at lienhe@luatminhkhue.vn or phone at: +84986 386 648—lawyer To Thi Phuong Dzung.