Taxes Affecting Foreign Investors in Vietnam

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By Joyce Roque

Mar. 11 – A foreign investor looking to enter the Vietnamese market must be aware of the taxes that will affect them in the long-term since taxes are implemented on a national level and no state or provincial taxes are in place.

These taxes include:

Corporate Income Tax

Withholding Taxes

Capital Assignment Profits Tax

Value Added Tax

Import Duties

Personal Income Tax

Social Security, Unemployment and Health Insurance for Local Hires

Sales Tax

Natural Resources Tax

Property Taxes

Export Duties

Foreign Contractor Withholding Tax

Double Taxation Agreements

The government also has special tax incentives available for priority areas, industries and specific forms of investment. Foreign investment into the region’s new Asian tiger has been steady despite setbacks from the financial crisis that severely depressed exports that contribute 70 percent to Vietnam’s gross domestic product. Investors usually gravitate towards Vietnam as a hedge on their operations in China, a China plus one strategy that follows the advice of not putting all your eggs in one basket.

During the first two months of this year, US$1.7 billion worth of foreign direct investment came in or only about 27.3 percent during the previous period. There were 88 newly licensed projects worth US$1.6 billion and  realized foreign direct investment was measured at US$1.1 billion.

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