Vietnam has revised its temporary exit suspension rules for taxpayers with outstanding tax liabilities under Decree No. 252/2026/ND-CP, effective 1 July 2026. The new provisions introduce faster procedures for lifting travel restrictions and greater flexibility for taxpayers resolving tax debts.
Effective 1 July 2026, Vietnam’s Decree 252/2026/ND-CP (“Decree 252”) accelerates the removal of exit suspensions and permits restrictions to be lifted when remaining tax debts fall below VND 50 million for individuals and household businesses or VND 500 million for eligible organizations. The decree also allows taxpayers to submit payment evidence electronically and introduces a 120-day grace period for certain compliance violations.
The changes form part of the Government’s broader efforts to modernise tax administration while ensuring taxpayers have sufficient opportunity to rectify compliance issues before more restrictive enforcement measures are applied.
Manage Tax Compliance
Get tax support resolving liabilities, registration issues, and exit suspensions before travelling out of Vietnam.
Under the new rules, tax authorities must issue a notice lifting an exit suspension immediately once a taxpayer satisfies the prescribed conditions. The notice is transmitted electronically through the tax administration system to the immigration authority, which then removes the travel restriction in accordance with the regulations.
Previously, tax authorities had up to 24 working hours after a taxpayer fulfilled their tax obligations to issue the cancellation notice.
The shorter processing time is expected to reduce disruptions for business travellers and individuals requiring urgent international travel after settling outstanding tax liabilities.
Updated exit suspension thresholds for tax debtors
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One of the most notable changes is the introduction of clear monetary thresholds and overdue periods for applying temporary exit suspension measures against taxpayers with outstanding tax debts.
The decree also strengthens procedural safeguards by requiring tax authorities to issue an electronic notification at least 30 days before imposing an exit suspension.
Taxpayer
Conditions for exit suspension
Individuals and household businesses
Tax debts of VND 50 million or more that remain overdue for 120 days or longer after a tax enforcement decision.
Legal representatives and beneficial owners of enterprises
The enterprise is under tax enforcement with tax debts of VND 500 million or more, overdue for 120 days or longer.
Businesses and household businesses no longer operating at their registered address
More than 120 days have elapsed since the tax authority confirmed the taxpayer was no longer operating, without resuming operations or terminating its tax identification number (TIN).
Foreign individuals
Outstanding tax liabilities remain unpaid before departing Vietnam.
Vietnamese citizens emigrating overseas
Outstanding tax liabilities remain unpaid before departure.
New mechanism addresses payment data delays
The decree also introduces a safeguard for taxpayers whose tax payments have been made but have not yet been reflected in the tax authority’s electronic system:
The tax authority that directly manages the taxpayer is responsible for issuing, extending, and revoking exit suspension notices.
Where payment information has not been updated, taxpayers may submit electronic evidence of payment through the tax administration system. The tax authority will then verify the information, update its records and, where the relevant conditions have been met, issue the notice lifting the exit suspension.
Where a taxpayer is transferred to another tax authority, the new managing tax authority will assume such authority.
The new procedure is intended to reduce the impact of delays caused by data synchronisation between government systems, particularly where taxpayers have already fulfilled their tax obligations.
Exit suspension may be lifted before all tax debts are settled
Another notable change is the introduction of more flexible conditions for lifting exit suspension measures.
Under Decree 252, tax authorities may lift an exit suspension where the remaining tax debt falls below the statutory thresholds:
VND 50 million for individuals and household businesses; and
VND 500 million for enterprises, cooperatives, and cooperative unions.
Taxpayers may also submit electronic proof of payment where the tax payment has not yet been updated in the tax authority’s system.
For taxpayers no longer operating at their registered address, exit restrictions may also be lifted once they restore their tax identification number (TIN), complete the required tax filings, reduce outstanding tax debt below the applicable threshold, or complete procedures to terminate the TIN in accordance with regulations.
The revised approach provides taxpayers with greater flexibility to resolve compliance issues while reducing unnecessary restrictions once the majority of outstanding obligations have been addressed.
Review Tax Exposure
Identify outstanding liabilities, registration issues, and potential exit-suspension risks affecting legal representatives or beneficial owners.
Expanding the scope of affected persons to include beneficial owners of enterprises, consistent with the Enterprise Law;
Requiring 120 days after a taxpayer is declared inactive at its registered address before exit suspension measures may be imposed; and
Limiting the measure to specified individuals, including household business owners, individual business operators, beneficial owners and legal representatives of enterprises, cooperatives and cooperative unions.
The introduction of the 120-day grace period gives taxpayers additional time to restore their TIN, complete deregistration procedures or otherwise rectify their compliance status before travel restrictions are imposed.
Business implications
The amendments reflect a shift towards a more balanced enforcement approach by combining stricter tax administration with greater procedural safeguards for compliant taxpayers.
Businesses should consider:
Monitoring outstanding tax liabilities to avoid triggering exit suspension thresholds;
Ensuring tax payments are made sufficiently in advance of international travel by company representatives;
Retaining proof of tax payments in case of delays in system updates; and
Promptly addressing inactive tax registration status or outstanding TIN procedures to avoid enforcement measures.
For foreign-invested enterprises, the revised rules also reinforce the importance of maintaining accurate tax registration records and monitoring the tax compliance status of legal representatives and beneficial owners, particularly where cross-border travel forms part of normal business operations.
Managing tax in Vietnam is critical for FDI companies to stay compliant with local regulations, GST requirements, and global standards such as IFRS, navigate complex filings, and apply correct tax treatments. A well-structured tax process helps to avoid penalties and stay 100% compliant.
Vietnam’s tax reforms entered a new phase on 1 July 2026 with the simultaneous entry into force of four implementing decrees covering tax administration, personal income tax (PIT), electronic invoicing, and transfer pricing.
Rather than introducing standalone obligations, the four new decrees form an integrated compliance framework under the Law on Tax Administration 2025 and related tax laws. Businesses should therefore assess their tax governance holistically, as changes in one area, such as tax registration or invoice management, may directly affect compliance in others.
The government issued four decrees on 30 June 2026, all taking effect the following day:
Multinational groups and enterprises with related-party transactions
Although each decree governs a distinct area, they are designed to operate together. Businesses should therefore avoid implementing them in isolation, particularly where finance, payroll, tax and legal functions operate independently.
Decree 252 provides the overarching framework for tax administration by standardising tax registration procedures, taxpayer obligations and enforcement mechanisms.
Among the key changes are:
Harmonised deadlines for tax registration and notification procedures;
Revised rules governing temporary exit suspension for tax debtors;
Enhanced taxpayer protections during electronic system failures;
A new mechanism allowing businesses under invoice enforcement to continue issuing invoices in certain circumstances; and
Consolidation of five previous tax administration decrees into a single implementing regulation.
For businesses, Decree 252 establishes the administrative framework upon which the other decrees operate. Tax registration records, taxpayer status and compliance history all influence subsequent obligations relating to invoicing, payroll reporting and tax administration.
Decree 253 updates PIT compliance and payroll administration
Decree 253 provides detailed guidance on implementing the revised Personal Income Tax Law.
The decree clarifies several areas affecting employers, including:
Taxable and non-taxable employment benefits;
Residency determination;
Deductible expenses and allowances;
PIT withholding obligations;
Tax finalisation procedures; and
Documentation supporting tax exemptions and deductions.
For employers, payroll compliance cannot be viewed separately from tax administration. Employee registration information, taxpayer identification numbers and withholding declarations all depend on accurate tax registration under Decree 252.
Companies with expatriate employees should also reassess residency determinations and payroll policies to ensure continued compliance under the revised PIT framework.
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Decree 254 modernises Vietnam’s electronic invoicing framework by introducing more detailed rules governing electronic invoices and electronic documents.
The decree expands requirements relating to:
Electronic invoice issuance and authentication;
Invoice correction and replacement procedures;
Electronic records and supporting documents;
Responsibilities of taxpayers and service providers; and
Data transmission between taxpayers and the tax authority.
The decree also supports the Government’s continued digitalisation of tax administration by strengthening the role of electronic records in tax compliance.
Businesses should review ERP systems, invoicing software and internal controls to ensure electronic invoice workflows remain aligned with the new requirements. Changes to invoice administration may also affect VAT reporting and broader tax compliance processes.
Decree 255 introduces a new transfer pricing framework
Decree 255 replaces Vietnam’s previous transfer pricing regulations with a new framework governing tax administration for related-party transactions.
The decree updates rules on:
Identifying related-party relationships;
Transfer pricing documentation;
Comparability analysis;
Disclosure requirements;
Exemptions and documentation thresholds; and
Tax authority administration of related-party transactions.
For multinational enterprises, transfer pricing compliance increasingly extends beyond preparing annual documentation. Tax authorities now have access to a broader range of taxpayer information collected through tax registration, electronic invoicing and tax administration systems, reinforcing the need for consistency across all tax filings.
Why businesses should implement all four decrees together
Although each decree regulates a different aspect of taxation, they collectively reshape how businesses manage tax compliance in Vietnam.
The interaction between the four regulations means that:
Tax registration under Decree 252 supports PIT reporting, invoice administration and transfer pricing filings;
Electronic invoices under Decree 254 generate transactional data that tax authorities may use when reviewing VAT, CIT and transfer pricing positions;
PIT compliance under Decree 253 relies on accurate taxpayer registration and payroll reporting; and
Transfer pricing compliance under Decree 255 increasingly depends on consistent financial, invoicing and tax administration records.
Rather than treating the reforms as four separate compliance exercises, businesses should adopt a coordinated implementation plan involving finance, tax, payroll, HR, legal and IT teams.
Key takeaways
Vietnam’s four new tax decrees came into force on 1 July 2026, completing the implementation of the country’s revised tax framework.
The reforms cover tax administration, PIT, electronic invoicing, and transfer pricing, with interconnected compliance obligations.
Businesses should align tax, payroll, invoicing, and transfer pricing processes to ensure consistent reporting and reduce compliance risks.
Managing tax in Vietnam is critical for FDI companies to stay compliant with local regulations, GST requirements, and global standards such as IFRS, navigate complex filings, and apply correct tax treatments. A well-structured tax process helps to avoid penalties and stay 100% compliant.
Effective 1 July 2026, Decree No. 260/2026/ND-CP (“Decree 260”), provides further clarifications and implementation measures to several provisions of Vietnam’s Law on High Technology. It places greater emphasis on research and development (R&D), strategic technologies, advanced manufacturing, and workforce development.
Rather than offering incentives based primarily on investment size, Vietnam is increasingly rewarding projects that demonstrate innovation, technology transfer, and long-term value creation.
For foreign investors, the changes create new opportunities but also require more careful planning to ensure projects meet the revised qualification criteria and remain compliant throughout their investment lifecycle.
Investors in Vietnam’s high-tech parks continue to enjoy preferential incentives
As per Article 22 of Decree 260, projects located in high-tech parks will continue to receive investment incentives equivalent to those available in areas with especially difficult socio-economic conditions under Vietnam’s Investment Law.
While the incentive framework itself remains familiar, the decree expands the range of support available to investors. Accordingly, businesses operating within Vietnam’s high-tech parks can benefit from:
Investment incentives and tax preferences available under existing investment regulations;
One-stop administrative support for investment, enterprise registration, land, construction, environmental, labour, taxation and customs procedures;
Government support for workforce recruitment and related employment matters; and
Priority access to national programmes supporting high technology, strategic technologies, innovation, skills development and enterprise support.
The decree also authorises provincial governments to introduce additional support measures based on local development priorities and available budgets. This could create differences in investment packages across provinces, making location selection an increasingly strategic consideration for investors.
Investment projects face stricter qualification criteria
The new framework raises the bar for projects seeking approval in high-tech parks by introducing clearer eligibility requirements across multiple project categories.
According to Article 26 of Decree 260, all investment projects must demonstrate that they:
Align with the development objectives of the relevant high-tech park;
Apply environmentally friendly and energy-efficient technologies;
Match the park’s infrastructure planning and capacity;
Demonstrate sufficient financial resources and technological capability to implement projects on schedule; and
Deliver relatively high investment intensity compared with other projects within the same functional zone.
These baseline requirements are supplemented by sector-specific criteria depending on whether the project involves R&D, advanced manufacturing, incubation services, technology services or education and training.
R&D and strategic technology projects receive priority
The decree places particular emphasis on attracting research-intensive investments and strategic technology development.
Projects establishing high-tech or strategic technology R&D centres must demonstrate clear commercialisation pathways rather than focusing solely on research, and their operational requirements are considerably more demanding.
These requirements indicate Vietnam’s intention to attract substantive research activities rather than projects established primarily to access investment incentives.
Advanced manufacturing projects must demonstrate technology leadership
Manufacturing projects applying high technologies are also subject to enhanced qualification standards. In addition to using technologies included on Vietnam’s priority technology lists, projects are expected to demonstrate advanced production capabilities through:
International quality management standards;
Environmental compliance and energy-efficient production; and
Advanced automation and modern production lines.
Some requirements vary by project scale. Large projects meeting specified investment or revenue thresholds benefit from lower R&D expenditure and staffing ratios, recognising economies of scale while maintaining innovation requirements.
For manufacturers considering Vietnam as a regional production base, investment planning should incorporate:
Workforce development and skills training;
Technology deployment and automation; and
Long-term R&D investment to maintain compliance and qualify for incentives.
Streamlined certification process with greater investor accountability
Decree 260 also introduces a clearer certification mechanism for projects that are not otherwise required to obtain investment policy approval or an Investment Registration Certificate (IRC).
Under the new procedure, investors must submit a project dossier explaining how the proposed investment satisfies the applicable eligibility criteria. The application includes commitments regarding:
Project implementation;
Technology standards;
Labour requirements; and
Environmental considerations.
The management board of the relevant high-tech park must coordinate consultation with provincial authorities before completing its assessment within prescribed timelines.
Importantly, investor commitments will become part of the regulatory basis for future supervision and inspections. Therefore, if projects fail to fulfil the commitments made during certification, investors may face compliance actions under Vietnam’s investment legislation.
Businesses should ensure that technical, operational and financial assumptions included in project applications are realistic and fully supported by implementation plans.
Effectiveness and transitional provisions
Effective 1 July 2026, Decree 260 replaces Decree No. 10/2024/ND-CP, which governed high-tech parks in Vietnam. The new directive introduces transitional provisions that protect existing investments while aligning future project changes with the new regulatory framework.
Existing investment licences, investment registration certificates and high-tech enterprise certifications generally remain valid until their expiry. However, businesses should note that:
Modifications involving high-tech or strategic technology activities must comply with the new eligibility criteria;
Existing land lease arrangements remain valid in certain circumstances; and
Annual land rental incentives may transition to the new framework after the decree takes effect.
These transitional measures provide regulatory continuity while encouraging existing investors to gradually align their operations with Vietnam’s updated high-tech and innovation strategy.
What businesses should do next?
The new high-tech park framework reflects Vietnam’s shift from attracting investment based primarily on capital commitments towards rewarding projects that generate technological capability, innovation and skilled employment.
For multinational manufacturers, technology companies and innovation-focused investors, the revised framework presents an opportunity to secure preferential treatment while supporting Vietnam’s ambition to move further up the global value chain. However, accessing these benefits will increasingly depend on demonstrating genuine technological capability and maintaining compliance throughout the life of the investment.
Under Decree No. 260/2026/ND-CP, qualified projects continue to receive preferential investment incentives and one-stop administrative support, while new eligibility criteria place greater emphasis on R&D, strategic technologies, environmental performance and workforce quality.
Manufacturing and R&D projects in high-tech parks face stricter operational and innovation requirements.
Investors should review project plans early to ensure compliance and maximise available incentives.
Setting up a business in Vietnam requires navigating company registration, local approvals, and work permit processes. We help FDI companies by preparing and submitting documentation, coordinating with authorities, and ensuring compliance, so they can start operations smoothly and focus on growth.
Explore Vietnam’s economic performance in H1 2026, covering GDP growth, trade, foreign investment, manufacturing output, and labour market trends shaping the country’s business outlook for foreign investors.
Vietnam entered 2026 with strong economic momentum despite continued uncertainty in global trade and supply chains. During the first six months, growth extended across production, investment, and employment, supported by manufacturing, services, public investment, and domestic demand.
The country’s gross domestic product (GDP) grew 8.18 percent year on year, while second quarter growth reached 8.39 percent, the highest second quarter rate since 2011, according to the National Statistics Office.
The halfyear results also present a more varied picture beneath the headline growth rate. Foreign investment increased sharply, manufacturing output and new orders strengthened, and the labour market continued to add workers. At the same time, faster import growth moved the goods balance into deficit, while higher input costs, supply disruptions, and cautious factory hiring remained areas to monitor.
Vietnam H1 2026 Recap
Indicator
H1 2026 result
GDP growth
8.18%
Registered FDI
US$34.65 billion
Realized FDI
US$13.03 billion
Manufacturing value added
10.23% growth
June manufacturing PMI
51.8
Employment
52.6 million people
Working age unemployment
2.22%
GDP growth accelerates across major economic sectors
Economic growth remained broad-based in H1 2026, with all three major sectors recording positive growth. However, their contributions to overall GDP expansion varied significantly:
Agriculture, forestry, and fisheries: Expanded 3.87 percent, contributing 5.66 percent of overall GDP growth. Agriculture grew 3.57 percent, forestry 3.98 percent, and fisheries 4.88 percent, providing a stable foundation for the economy.
Industry and construction: Recorded the strongest sectoral growth at 9.86 percent, accounting for 40.35 percent of overall GDP growth. Manufacturing remained the primary growth driver, supported by continued public investment in infrastructure and construction.
Services: Increased 8.09 percent and made the largest contribution to GDP growth (47.14 percent). Growth was driven by retail trade, domestic consumption, and tourism, with 12.3 million international visitor arrivals in H1, up 14.9 percent year on year.
The sector data point to broad economic expansion, with manufacturing and services providing most of the increase. Their performance will remain central to Vietnam’s full year growth objective. Stronger industrial activity also supported high trade volumes and demand for production inputs during the period.
Merchandise trade maintains strong momentum
Strong industrial activity continued to support Vietnam’s merchandise trade in H1 2026, although faster import growth shifted the country into a trade deficit.
Estimated trade deficit: US$16.65 billion, compared with a US$7.6 billion surplus in H1 2025. Final figures remain subject to reconciliation by Vietnam Customs.
Despite the shift in the trade balance, export performance remained broad-based. Five product groups each generated more than US$10 billion, together accounting for 62.6 percent of total exports:
Computers and electronic products;
Phones and components;
Machinery and equipment;
Textiles and garments; and
Footwear.
Foreign-invested enterprises (FIEs) continued to dominate exports of electronics and machinery, underscoring the close relationship between FDI, manufacturing, and export growth.
Major trading partners
Largest export market: United States;
Largest import source: China;
Other key markets: EU, South Korea, Japan, and ASEAN.
Higher fuel prices and robust demand for machinery, components, and production inputs drove import growth. While the resulting deficit does not necessarily indicate weaker industrial activity, as many imports support manufacturing and future exports, it highlights the need to monitor input costs and external demand in the second half of 2026.
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Newly registered capital: US$17.39 billion across 2,013 projects (+87.2 percent YoY), while project numbers rose just 1.3 percent, indicating larger average project sizes;
Additional capital to existing projects: US$11.04 billion (+23.5 percent YoY);
Capital contributions and share purchases: US$6.22 billion (+89.5 percent YoY), including:
US$2.15 billion in charter capital increases; and
US$4.07 billion in share acquisitions.
Top investment destinations
Manufacturing and processing: US$17.91 billion (63.0 percent of total registered FDI), including US$10.76 billion in newly registered capital (61.9 percent);
Real estate: US$5.1 billion.
Leading source economies
Singapore: US$7.31 billion;
South Korea: US$5.45 billion;
Japan: US$1.2 billion; and
China: US$977 million.
Meanwhile, realized FDI reached US$13.03 billion, up 11.2 percent year on year and the highest first-half level in five years. Manufacturing and processing accounted for US$10.76 billion, or 82.6 percent, of disbursed capital.
While FDI commitments accelerated sharply, the more moderate growth in realized investment underscores the importance of monitoring project implementation alongside announced investment.
Manufacturing remained Vietnam’s key industrial growth driver in H1 2026, supported by stronger production and continued investment.
Key manufacturing indicators:
Industrial production index (IIP): +10.8 percent YoY, the strongest first-half growth since 2019;
Manufacturing value added: +10.23 percent YoY;
Contribution to GDP growth: 33.07 percent.
The figures underscore the sector’s central role in Vietnam’s economic expansion. Electronics, machinery, textiles, footwear, and other export-oriented industries continued to benefit from improving demand and sustained investment.
Labor force (aged 15+): 53.7 million, up 690,700 YoY;
Employment: 52.6 million, up 672,500 YoY;
Unemployment rate: 2.22 percent:
Urban: 2.47 percent; and
Rural: 2.05 percent;
Underemployment rate: 1.65 percent, down 0.07 percentage points.
Average monthly income increased by VND 717,000 to VND 9 million, while the share of workers with formal qualifications or certificates rose to 29.7 percent, indicating gradual improvements in workforce quality.
Employment by sector
Services: 21.6 million workers (40.9 percent of total employment), up 400,900 YoY;
Industry and construction: 17.7 million (33.9 percent), up 474,100;
Agriculture, forestry, and fisheries: Employment fell by 202,600, with the sector’s share declining to 25.2 percent.
Core digital economy activities employed approximately 1.5 million people, or 3 percent of the workforce. However, informal employment still accounted for around 62 percent of total employment, while youth unemployment and skills development remained ongoing challenges.
Economic outlook for the second half of 2026
Vietnam enters the second half of 2026 from a position of strength, supported by broad-based economic growth and resilient domestic activity. Its key growth drivers for H2 2026 include:
Continued public investment and infrastructure development;
Stronger domestic consumption and private investment;
Credit expansion; and
Higher FDI disbursement.
At the same time, external risks remain. While robust import growth reflects healthy demand for production inputs, it has also widened the trade deficit.
Although Vietnam will need stronger growth in the second half to achieve its full-year target, the H1 2026 results provide a solid foundation, underpinned by robust GDP growth, rising FDI, resilient manufacturing, and continued employment gains.
Setting up a business in Vietnam requires navigating company registration, local approvals, and work permit processes. We help FDI companies by preparing and submitting documentation, coordinating with authorities, and ensuring compliance, so they can start operations smoothly and focus on growth.
Businesses operating in Vietnam should understand the country’s evolving personal data protection framework and implement appropriate governance measures to meet regulatory requirements while supporting global data management practices.
Q1. Who must comply with Vietnam’s personal data protection regime?
Vietnam’s Personal Data Protection Law (PDP Law) has broad application. It applies to Vietnamese organisations and individuals, foreign entities operating in Vietnam, and foreign entities directly involved in processing personal data of Vietnamese citizens or eligible persons of Vietnamese origin residing in Vietnam.
As a result, compliance obligations may extend beyond Vietnam-based operations to overseas headquarters, regional shared-service centres, cloud service providers, software vendors, and other entities that access, store, transfer, or process Vietnam-related personal data.
Q2. What are the key filing and reporting obligations?
Under the PDP Law, Decree 356, and Decision 778, organisations may need to submit notifications, assessments, and regulatory filings to the Cybersecurity and High-Tech Crime Prevention Department (A05).
Personal Data Processing Impact Assessment (DPIA) dossier: Required for personal data processing activities.
Cross-Border Personal Data Transfer Impact Assessment (TIA) dossier: Required for cross-border transfers of personal data.
Dossier updates: Required when there are material changes to processing activities, cross-border transfers, organisational structure, or previously reported information.
DPIA and TIA dossiers are generally due within 60 days from the start of the relevant processing or cross-border transfer activity. Businesses should also maintain supporting documentation, including data processing agreements, internal policies, records of processing activities, and evidence relating to designated data protection personnel.
Q3. What obligations apply to vendors and service providers?
Vendors that process personal data on behalf of another organisation are generally classified as Data Processors under the PDP Law. They may process personal data only under a valid agreement with the Data Controller and must implement appropriate technical and organisational safeguards.
Key obligations include:
Entering into a compliant personal data processing agreement with the client;
Processing personal data only for authorised purposes;
Implementing adequate security and data protection measures;
Cooperating with regulatory inspections and investigations; and
Maintaining records demonstrating compliance with applicable requirements.
In addition, organisations that provide personal data processing services as a business activity may be required to obtain a Certificate of Eligibility for Personal Data Processing Service Business from the MPS.
To qualify, service providers must generally:
Be legally established in Vietnam;
Appoint qualified PDP personnel;
Maintain appropriate infrastructure and security systems;
Employ personnel with relevant data protection expertise; and
Complete required impact assessment filings, including DPIA and, where applicable, cross-border transfer assessments.
Businesses engaging third-party service providers should conduct due diligence to verify that vendors can meet Vietnam’s personal data protection requirements and, where applicable, hold the necessary certifications.
Q4. What are the penalties for noncompliance?
The PDP Law introduces significantly stronger enforcement mechanisms and financial penalties than those available under Vietnam’s previous regulatory framework.
Depending on the nature of the violation, organisations may face:
Administrative fines;
Suspension of processing activities;
Remedial orders;
Confiscation of unlawful gains; and
Other corrective measures imposed by competent authorities.
Notably:
Violations involving the purchase or sale of personal data may be subject to fines of up to 10 times the unlawful revenue generated from the violation.
Unlawful cross-border transfers may be subject to fines of up to 5 percent of the enterprise’s preceding year’s revenue.
Other personal data protection violations may be subject to fines of up to VND 3 billion.
Additional enforcement guidance is expected through a forthcoming decree on administrative penalties for personal data protection violations.
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Q5. How should businesses prepare for inspections or audits?
Although certain small businesses may benefit from limited exemptions or deferred implementation periods, organisations should not assume that they are exempt from compliance obligations.
Under the current framework:
Small enterprises and startups may postpone certain obligations, including DPIA, TIA, and DPO requirements, for up to five years from the effective date of the PDP Law.
Household businesses and micro-enterprises may be exempt from certain obligations.
However, these exemptions generally do not apply to organisations that:
Provide personal data processing services;
Directly process sensitive personal data; or
Process personal data relating to 100,000 data subjects or more.
Furthermore, exempt entities must still comply with core obligations, such as obtaining valid consent, implementing security measures, and protecting data subject rights.
To prepare for potential inspections, businesses should maintain updated documentation, internal policies, records of processing activities, incident response procedures, employee training records, and evidence supporting DPIA and TIA filings.
Q6. What practical steps should companies prioritise in 2026?
For many organisations, 2026 will be a transition year focused on operationalising compliance.
Priority actions should include the following:
Establish a governance framework: Assign data protection responsibilities, define accountability structures, and implement internal policies.
Review consent and privacy notices: Update consent mechanisms, privacy notices, and record-keeping practices to meet PDP requirements.
Q7. Can an overseas parent company access the personal data of its Vietnam subsidiary without a personal data processing agreement?
No. The PDP Law does not provide a blanket exemption for transfers within a corporate group. An overseas parent company and its Vietnam subsidiary are treated as separate legal entities and must establish a lawful basis for any access to or transfer of personal data.
Where the overseas parent receives, accesses, stores, or otherwise processes personal data from the Vietnam subsidiary, the arrangement may constitute:
Personal data processing by a third party;
A controller-processor relationship; and/or
A cross-border personal data transfer.
Accordingly, businesses should generally ensure that:
Appropriate intra-group data processing agreements are executed;
Data subjects have been properly informed of the transfer;
Any required consent has been obtained where applicable;
Cross-border transfer requirements are satisfied; and
The TIA dossier has been prepared and submitted where required.
Multinational groups should therefore review internal data sharing arrangements carefully. Routine access by regional headquarters, global HR systems, centralised customer relationship management platforms, cloud infrastructure providers, or shared service centres may trigger compliance obligations under Vietnam’s new PDP framework.
Key takeaways
Vietnam’s Personal Data Protection Law has broad extraterritorial scope, requiring compliance from many foreign companies that process personal data connected to Vietnam.
Businesses should assess whether they must complete DPIA and TIA filings, implement compliant data processing agreements, and meet cross-border data transfer requirements.
The new regime significantly strengthens enforcement, making proactive compliance and robust data governance essential to avoid substantial penalties.
Setting up a business in Vietnam requires navigating company registration, local approvals, and work permit processes. We help FDI companies by preparing and submitting documentation, coordinating with authorities, and ensuring compliance, so they can start operations smoothly and focus on growth.
EuroCham’s Q2 2026 Business Confidence Index (BCI) shows European businesses remain optimistic about Vietnam despite global uncertainty. The report highlights stronger commercial performance while identifying administrative reform, regulatory consistency, and intellectual property protection as key priorities for sustaining investment.
Marking the 15th anniversary of the flagship BCI report, the Q2 2026 report delivers a comprehensive assessment of how European businesses are navigating an increasingly complex global and domestic environment.
Confidence among European businesses in Vietnam strengthened in Q2 2026 despite heightened global uncertainty, as EuroCham’s Business Confidence Index (BCI) rose seven points to 79.7, compared with 72.7 in the previous quarter.
Beyond measuring business sentiment, the report examines the impacts of geopolitical tensions, shifting trade dynamics, administrative reforms, and intellectual property protection on business confidence and investment decisions in Vietnam.
Strong business performance drives confidence
The Q2 2026 BCI shows that European business sentiment in Vietnam has strengthened significantly. 63 percent of respondents reported positive business conditions during the quarter, while 69 percent expect favorable conditions in the next three months, an 11 percentage-point increase from the previous edition.
Despite the positive outlook, regulatory and administrative challenges continue to weigh on investment decisions.
More than half (53 percent) of surveyed businesses identified regulatory delays, policy inconsistencies, and tax administration as their biggest obstacles to long-term expansion. Businesses also highlighted:
Compliance burdens diverting resources from core operations (29 percent);
Regulatory complexity reducing competitiveness (27 percent); and
Growing talent shortages, cited by 38 percent of respondents.
Respondents also pointed to inconsistent regulatory implementation, lengthy licensing procedures, and VAT refund delays as ongoing concerns that affect operational efficiency and investment certainty.
IP protection continues to influence investment decisions
Intellectual property protection remains an important consideration for European investors, particularly companies seeking to localize advanced technologies.
Among businesses with registered intellectual property in Vietnam:
32 percent experienced registration or enforcement challenges;
Weak dispute resolution mechanisms were the most common issue (28 percent); and
Administrative delays affected 18 percent of respondents.
While businesses welcomed the government’s recent IP reforms, many noted that it is still too early to assess their practical impact.
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The BCI findings suggest that geopolitical tensions and global trade disruptions are influencing business strategy without significantly weakening long-term confidence in Vietnam.
While 46 percent of surveyed businesses reported a negative impact on their international operations, another one-third experienced mixed effects depending on their business segment, market, or supply chain. The findings indicate that the impact of external shocks varies considerably by company size, industry, and level of international exposure.
Mid-sized companies were the most affected, reporting the highest levels of operational disruption. In contrast, larger multinational companies saw no significant positive spillover effects from shifting trade dynamics, reflecting their greater exposure to global markets and compliance requirements.
Rising costs and supply chain adjustments
The survey shows that global uncertainty is primarily increasing operating costs rather than reducing business activity. Among affected businesses:
Businesses also reported logistics disruptions, delivery delays, and weaker customer confidence, prompting many to strengthen supply chain resilience. Longer transit buffers were particularly common among companies trading with the US and the EU.
Trade diversification creates new opportunities
Despite these challenges, some companies have benefited from shifting global supply chains. Respondents reported increased production orders and investment as manufacturers diversified operations toward Vietnam, reinforcing the country’s position as a regional manufacturing and sourcing hub.
At the same time, compliance requirements have become more complex. More than half of internationally active businesses said geopolitical developments have made compliance with Rules of Origin (RoO) requirements more difficult, particularly in obtaining supplier documentation, demonstrating manufacturing transformation, and managing fragmented sourcing networks.
Financial impact remains manageable
While two-thirds of surveyed businesses reported a negative financial impact from global uncertainty, the scale of losses remained relatively limited for most respondents.
Around half of affected businesses reported losses of less than 10 percent.
Only 4 percent experienced losses exceeding 30 percent.
Meanwhile, 14 percent of respondents recorded positive financial outcomes, largely driven by supply chain realignment and shifting trade flows.
Companies with stronger integration into EU–Vietnam trade were generally more resilient, highlighting the benefits of diversified export markets and established trade relationships.
Outlook: Vietnam remains a strategic investment destination
The Q2 2026 Business Confidence Index reinforces Vietnam’s position as one of Asia’s most attractive destinations for European investment.
Despite mounting geopolitical tensions and an increasingly complex global trading environment, European businesses continue to view the country as a strategic market for long-term growth, supported by resilient domestic demand, expanding manufacturing capabilities, and ongoing supply chain diversification.
At the same time, the survey highlights that maintaining this momentum will require continued improvements to Vietnam’s business environment. As Vietnam pursues its ambition of becoming a high-value investment destination, addressing its structural challenges will be key to translating strong business sentiment into sustained, high-quality foreign investment.
EuroCham’s Business Confidence Index rose to 79.7 in Q2 2026, up from 72.7 in Q1.
Sixty-three percent of European businesses reported positive business conditions, while 69 percent expect favorable conditions next quarter.
Administrative reform remains the biggest challenge, with regulatory delays and policy inconsistency cited by 53 percent of respondents.
Global uncertainty is increasing logistics costs and prompting supply chain adjustments rather than weakening long-term confidence.
Setting up a business in Vietnam requires navigating company registration, local approvals, and work permit processes. We help FDI companies by preparing and submitting documentation, coordinating with authorities, and ensuring compliance, so they can start operations smoothly and focus on growth.
On June 30, 2026, the Vietnamese government issued Decree No. 255/2026/ND-CP (“Decree 255”), replacing and consolidating Vietnam’s transfer pricing framework for related-party transactions.
Effective July 1, 2026, and applicable from the 2026 corporate income tax (CIT) period, the decree aligns Vietnam’s transfer pricing rules with the Law on Tax Administration No. 108/2025/QH15 and international OECD standards. It was subsequently introduced by the Tax Department through Official Dispatch No. 4697/CT-CS dated July 9, 2026.
The entry into effect of Decree 255 also officially repealed Decree No. 132/2020/ND-CP and Decree No. 20/2025/ND-CP guiding Vietnam’s transfer pricing and related-party regulations, consolidating Vietnam’s transfer pricing rules under a unified directive and simplifying compliance requirements for businesses.
To ensure that the determination of affiliated relationships is comprehensive, accurately reflects the substance of transactions, and enhances tax administration, Decree 255 revises several core definitions and expands the circumstances under which parties are considered related.
Key updates include:
Clarified definitions of Ultimate Parent Entity (UPE) and Tax Treaty to align with Global Minimum Tax (GMT) and OECD concepts;
A related-party relationship is established where:
the transfer or acquisition of at least 25 percent of the owner’s contributed capital (equity interest) during the tax period; or
loans or borrowings from individuals exercising control over the enterprise (or their related persons) amounting to at least 10 percent of the owner’s contributed capital.
Certain 100 percent state-owned organizations acting solely as debt purchasers, debt handlers, creditors, or guarantors, without direct or indirect control over the enterprise, are excluded from the related-party definition.
Practical implication: Businesses should reassess their ownership structures and financing arrangements, as the expanded related-party criteria may bring previously unrelated parties within the scope of Vietnam’s transfer pricing rules.
Higher thresholds for transfer pricing documentation exemptions
One of the most business-friendly changes is the relaxation of documentation requirements.
Compared with previous regulations, Decree 255:
raises the revenue threshold for exemption from transfer pricing documentation from VND 200 billion to VND 500 billion; and
removes the requirement that taxpayers perform only “simple business functions.”
Practical implication: More low- and medium-risk businesses can now qualify for documentation exemptions, reducing annual compliance costs and administrative burdens.
Standardized transfer pricing databases
To improve consistency during audits, Decree 255 establishes a formal hierarchy for comparable data used in transfer pricing analyses.
The decree also formally introduces a National Database, which will serve as an additional source for benchmarking analyses.
Practical implication: The amendment provides greater clarity on the use of databases to reduce inconsistencies in the selection and application of comparable data for transfer pricing analyses. A more standardized approach to the use of comparable data is expected to minimize disputes between taxpayers and tax authorities during transfer pricing audits.
Country-by-country reporting aligned with OECD standards
Article 19 substantially updates Vietnam’s country-by-country reporting (CbCR) requirements to better align with OECD BEPS Action 13.
Major changes include:
Revised reporting threshold: The filing threshold changes from VND 18 trillion to EUR 750 million in consolidated group revenue.
Reference period: The threshold is determined using the preceding financial year’s consolidated revenue rather than the current tax year.
Clarified local filing obligations: Local CbCR filing is required only in specified circumstances where overseas filing or automatic information exchange conditions are not met.
Submission requirements: Reports must be submitted electronically through the Tax Management Information System in XML format.
Notification obligations: Taxpayers must submit the CbCR notification only once using Form 01/TB-BCLN, and updates are required only if information changes, within 90 days of the change.
Filing deadline: CbCR must be submitted within 12 months after the end of the Ultimate Parent Company’s financial year.
Importantly, the decree also clarifies that CbCR information may not be used as the sole basis for transfer pricing adjustments, limiting its use to risk assessment and international information exchange.
Practical implication: Multinational groups should review their reporting processes to ensure compliance with the revised thresholds, filing timelines, and electronic submission requirements.
Shift toward a taxpayer support model
Decree 255 signals a broader change in Vietnam’s transfer pricing administration.
Decree 255 also strengthens Vietnam’s transfer pricing administration by reinforcing its risk-based approach while introducing enhanced taxpayer compliance support measures.
Publication of industry profit margin benchmarks by sector, region, or taxpayer group;
Support for voluntary compliance programs;
Compliance assistance to reduce transfer pricing risks; and
Stronger commitments to taxpayer data confidentiality.
Practical implication: Businesses may benefit from greater transparency and earlier engagement with tax authorities, potentially reducing transfer pricing disputes.
Transitional provisions
To ensure continuity, Decree 255 preserves existing benefits for taxpayers applying the interest expense carry-forward provisions under Decree 20.
Eligible taxpayers may continue utilising remaining deductible interest expenses under the previous rules until their carry-forward period expires.
What businesses should do?
Companies with related-party transactions should review their transfer pricing policies ahead of the 2026 CIT filing season. Priority actions include:
Reassessing whether existing ownership or financing arrangements create related-party relationships under the new rules;
Determining whether the higher documentation exemption threshold applies;
Reviewing CbCR obligations based on the new EUR 750 million threshold;
Updating internal reporting systems to accommodate XML filing requirements; and
Monitoring forthcoming guidance on industry benchmark profit margins published by tax authorities.
Looking ahead
Decree 255 represents one of Vietnam’s most significant transfer pricing reforms since Decree 132. By aligning domestic rules more closely with OECD standards while simplifying compliance requirements, the new framework aims to improve tax transparency, reduce administrative burdens, and encourage greater voluntary compliance.
For multinational enterprises operating in Vietnam, understanding these changes early will be essential to managing transfer pricing risks under the new regime.
As international attention on Vietnam is increasing following its inclusion on the European Union’s list of non-cooperative jurisdictions for tax purposes, taxpayers should expect the Vietnamese tax authorities to continue enhancing transfer pricing enforcement.
The updates are projected to place a greater emphasis on transparency, economic substance, and the quality of transfer pricing documentation supporting cross-border related-party transactions.
Vietnam has consolidated its transfer pricing rules under Decree No. 255/2026/ND-CP, setting a unified framework aligned with the 2025 Law on Tax Administration and OECD standards.
The decree expands the definition of related parties while easing compliance for eligible businesses, including higher thresholds for transfer pricing documentation exemptions and revised country-by-country reporting (CbCR) requirements.
Companies should review their ownership structures, financing arrangements, transfer pricing documentation, and reporting processes before the 2026 CIT filing season to ensure compliance with the new rules.
Managing tax in Vietnam is critical for FDI companies to stay compliant with local regulations, GST requirements, and global standards such as IFRS, navigate complex filings, and apply correct tax treatments. A well-structured tax process helps to avoid penalties and stay 100% compliant.
Vietnam has strengthened its oversight of capital transfer taxation through a new regulatory framework governing the corporate income tax (CIT) treatment of such transactions.
Issued on December 15, 2025, Decree No. 320/2025/ND-CP (“Decree 320”) introduced key changes, including deemed tax rates, clearer recognition of indirect transfers, and revised exemptions for intra-group restructuring.
To implement these rules, the Ministry of Finance (MoF) issued Circular No. 20/2026/TT-BTC (“Circular 20”) on March 12, 2026, providing guidance on compliance procedures and documentation requirements.
This was followed by Circular No. 21/2026/TT-BTC on March 17, 2026, which updates the tax declaration forms for capital transfer transactions.
To mitigate tax risks and ensure compliance, businesses should familiarise themselves with the new administrative requirements and the key obligations introduced under the comprehensive framework.
Determination of taxable revenue for capital transfers
Under the new regime, the timing for determining taxable revenue in capital transfer transactions involving foreign enterprises. Taxable revenue is recognized when the initial capital transfer agreement takes legal effect in accordance with applicable regulations.
However, the wording in Circular 20 remains unclear. In particular, the term “initial capital transfer agreement” is not defined and could be interpreted to refer to the original agreement executed by the parties, regardless of any subsequent amendments or restatements, provided the agreement has become legally effective under applicable law.
Additionally, where the transfer value stated in a capital transfer agreement is VND 5 million or more but is not supported by valid non-cash payment documentation, the tax authority may reassess the transaction and determine the transfer price for CIT purposes.
Applicable tax rate
Under Point i, Clause 3, Article 12 of Decree 320, income from capital transfers derived by the following foreign enterprises is subject to CIT on a deemed basis at a rate of 2 percent of the capital transfer proceeds:
Foreign enterprises without a permanent establishment (PE) in Vietnam;
Foreign enterprises with a PE in Vietnam where the capital transfer income is not attributable to the PE’s activities; and
Foreign enterprises conducting business in Vietnam through e-commerce or digital platforms.
Exclusion for intra-group ownership restructuring
Circular 20 elaborates on the exclusion for intra-group ownership restructuring, confirming that qualifying transactions are not subject to deemed CIT where they do not result in a change to the group’s ultimate parent company and do not generate taxable income.
The circular specifies that the exemption covers transactions including:
demergers and company divisions;
mergers and consolidations;
share swaps;
capital contributions made using shares;
stock dividend and bonus share distributions within the group; and
other direct or indirect ownership transfers involving Vietnamese enterprises within the same corporate group.
To be regarded as non-income generating, the restructuring must satisfy all of the following conditions:
the ultimate beneficial owner remains unchanged following the restructuring;
the transfer value does not exceed the book value or the original investment value;
the transaction does not create any gain, and the value determined under the approved restructuring documentation does not exceed the recorded value at the time of transfer; and
the transferee assumes all investment values, rights, and obligations associated with the transferred capital.
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Under Circular 21, foreign enterprises carrying out capital transfer transactions are required to use the new Form 05/TNDN, issued as an appendix to the circular, when declaring corporate income tax (CIT) arising from capital transfers.
Compliance deadline
Pursuant to Article 8.4(o) of Decree No. 126/2020/ND-CP, CIT arising from capital transfer transactions is subject to transaction-based declaration, with the tax return required to be filed within 10 calendar days from the date the tax obligation arises.
As the tax administration regulations do not define the date on which the tax obligation arises for capital transfers, taxpayers must instead rely on the applicable CIT regulations.
Transitional provision
For foreign enterprises whose capital transfer agreements were signed before Decree 320 took effect, CIT declarations must continue to be submitted using Form No. 05/TNDN issued under Circular No. 80/2021/TT-BTC.
The transitional rule ensures that transactions initiated before the effective date of Decree 320 remain subject to the previous declaration procedures, while new transactions follow the updated reporting framework introduced under Circular 21.
Practical considerations for businesses
Businesses undertaking capital transfer transactions should review their tax compliance processes to align with the new framework. Key areas of focus include:
Reviewing transaction structures to determine whether a capital transfer falls within the deemed CIT regime or qualifies for an exclusion.
Maintaining comprehensive supporting documentation, including evidence for qualified intra-group restructurings and non-cash payment documentation.
Prepare robust supporting documentation for indirect capital transfer transactions, including sufficient evidence to substantiate the valuation of, and the allocation of the transfer proceeds attributable to, the Vietnamese investment for Vietnamese tax reporting purposes.
Proactive compliance and robust documentation will help businesses mitigate tax risks under Vietnam’s updated capital transfer tax framework.
Vietnam has introduced a new capital transfer tax framework through Decree 320/2025/ND-CP and its implementing circulars, tightening CIT compliance for domestic and cross-border transactions.
The new rules impose a 2 percent deemed CIT on most capital transfer proceeds of foreign enterprises, while providing exemptions for qualifying intra-group ownership restructurings.
Businesses should review transaction structures, maintain robust supporting documentation, and comply with the new declaration procedures and filing deadlines to mitigate tax risks under the updated regime.
This article was first published on December 30, 2025, and was last updated on July 15, 2026.
Managing tax in Vietnam is critical for FDI companies to stay compliant with local regulations, GST requirements, and global standards such as IFRS, navigate complex filings, and apply correct tax treatments. A well-structured tax process helps to avoid penalties and stay 100% compliant.
