Vietnam Tax Codes: An Explainer

In Vietnam, tax codes, also known as tax identification numbers (TINs), are unique numerical identifiers assigned to individuals and firms to define the scope of their tax obligations. The tax codes play a crucial role in enabling businesses to comply with Vietnam’s accounting and financial regulations effectively.

Vietnam’s tax system is a key factor in its investment appeal. Recent reforms have focused on reducing tax burdens, offering strong investment incentives, and enhancing tax compliance efficiency. The cornerstone of Vietnam’s tax regulation is Law No. 38/2019/QH14, dated June 13, 2019 (referred to as the Tax Administration Law), which governs all aspects of tax registration in the country.

Businesses operating in Vietnam must register for a tax code, also known as a tax identification number (TIN). This unique identifier, uniformly administered across the nation, is essential for identifying tax liabilities and adhering to tax regulations.

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Tax identification numbers will be issued to all businesses and individuals who comply with tax laws by filing taxes with customs offices and tax offices, with exceptions for those solely responsible for housing tax, land-use levy, agricultural land-use tax, tax on transferring land ownership, and individuals submitting registration fees.

Beyond identification, tax codes play a crucial role in helping foreign firms ensure compliance with Vietnam’s evolving accounting and financial regulations.

What is a tax code?

The tax code is a series of numbers codified according to a specific structure and used to identify taxpayers and define tax liability.

• The 10-digit codes are for businesses and organizations with legal status, representatives of households, household businesses, and other individuals.
• The 13-digit codes are for dependent units and other subjects. The 13-digit codes also include alphabet characters, following the syntax of N1N2N3N4N5N6N7N8N9N10 – N11N12N13.

Below are the details of each element in the Vietnam tax identification number format:

• N1N2: The first two digits indicate the province that issues TINs in Circular 105/2020/TT-BTC.
• N3N4N5N6N7N8N9: The following seven digits are sequential numbers ranging from 0000001 to 9999999.
• N10: The last digit serves as the control number.
• Independent tax-paying companies, individuals, and principal units are assigned numbers N1 to N10.
• The three numerals N11N12N13 are sequential numbers assigned to dependent branches and units, ranging from 001 to 999.

The following individuals and entities will receive the 13-digit tax identification numbers N1N2-N3N4N5N6N7N8N9-N10-N11N12N13:

• Representative offices and branches of enterprises engaged in business operations and directly filing taxes with tax offices (excluding branches of international corporations based in other countries).
• Member enterprises of corporations that are cost-accounting dependent.
• Contractors involved in oil and gas exploration, prospecting, and exploitation contracts (excluding contract-administering contractors, subcontractors, and those not directly filing taxes with tax authorities).
• Non-profit organizations deriving taxable income from corporations and enterprises.
• Owners of individual businesses, private businesses, and heads of business households with establishments or stores across various districts, cities, and provinces.

Issuance and application process

Taxpayers must apply for taxpayer registration and obtain TINs from tax authorities before beginning their business operations or incurring amounts payable to the state budget. The following entities shall apply for taxpayer registration:

• Enterprises, organizations, and individuals: These entities must apply for taxpayer registration through the interlinked single-window system, in conjunction with enterprise, cooperative, or business registration, as prescribed by the Law on Enterprises and other relevant regulations.
• Other organizations and individuals: Those not covered above must register directly with tax authorities, as regulated by the Ministry of Finance.

The registration process involves submitting an application along with several required documents, which may include:

• Tax registration declaration.
• List of affiliated entities (Form No. BK02-DK-TCT), if applicable.
• List of subsidiary companies or member companies (Form No. BK01-DK-TCT), if applicable.
• List of business locations (Form No. BK03-ĐK-TCT), if applicable.
• List of foreign contractors or subcontractors (Form No. BK04-DK-TCT), if applicable.
• List of contracts with foreign contractors or subcontractors with tax withheld and remitted by the Vietnamese party (Form No. 04.1-DK-TCT-BK), if applicable.
• Notarized copy of the business registration certificate or foreign investment license.
• List of capital contributions from organizations and individuals (Form No. 06-DK-TCT).
• Establishment decision, if applicable.

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Taxpayers are required to submit their tax registration documents directly to the tax authority either in person, by post, or through the tax authority’s electronic transaction portal. Additionally, submissions can be made through the national information system on enterprise registration, cooperative registration, and business registration.

On the other hand, foreign contractors can register for tax codes via the website thuedientu.gdt.gov.vn. Further, the website https://etaxvn.gdt.gov.vn/ facilitates foreign providers in meeting their tax obligations in Vietnam, irrespective of their location. Through this platform, foreign suppliers can register, declare, and settle taxes in Vietnam, while also gaining insights into the country’s tax regulations.

Timelines

The application for tax code registration must be submitted within 10 working days from the occurrence of the following events:

• Receipt of the business household registration certificate, establishment and operation license, investment registration certificate, or establishment decision.
• Commencement of business activities for organizations exempt from business registration, business households, or individual businesses subject to business registration but awaiting their business registration certificate.
• Responsibility to withhold and pay taxes on behalf of others.
• Payment on behalf of individuals as per contracts or business cooperation agreements.
• Signing contracts where foreign contractors and subcontractors declare and pay taxes directly to the tax authority.
• Execution of oil and gas contracts and agreements.
• Incurrence of Personal Income Tax (PIT) liability or request for tax refund.
• Fulfilment of other obligations related to the state budget.

The timeline for tax authorities to process tax registration documents depends on certain instances:

• If the dossier is complete, the notification of the dossier’s acceptance and the time limit for processing the tax registration dossier shall be no later than three working days from the date the complete dossier is received.
• If the dossier is incomplete, tax authorities must notify the taxpayer no later than two working days from the date they received the dossier.

Tax code usage

Tax codes determine how foreign contractors, joint-ventures, subsidiaries, and representative offices are treated under the Vietnamese tax system. For instance, foreign contractors, foreign suppliers, Vietnamese firms, and payment intermediaries may use tax codes to deduct, invoice, and pay tax on behalf of parties in accordance with the law. Therefore, Vietnamese tax codes contain vital information when considering how various forms of market entry impact tax incidence.

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When firms shift locations or expand into additional locations, their tax code registration information needs to be amended through an application to the local tax office. This application amends the details of registration while retaining the tax code that had been initially assigned.

When businesses dissolve, enter bankruptcy proceedings, or cease to exist, the tax authorities invalidate their assigned tax codes. The same applies if commercial contracts between foreign contractors and Vietnamese firms expire. The list of invalidated tax codes is then made public.

Vietnam’s tax structure

Vietnam’s tax system is federally controlled. This means that there are no state or local taxes across the country. Based on the tax codes, incidence can be categorized into corporate or personal income tax.

Corporate Income Tax

The Corporate Income Tax (CIT) applies to both domestic firms incorporated in Vietnam and foreign firms, regardless of whether they have a permanent presence in the country. In the context of foreign enterprises, branch offices, agents, construction sites, and service establishments are all regarded as establishing a ‘presence’ in Vietnam.

Under Integrated Document No. 01/VBHN-VPQH dated January 30, 2023, governed by the Law on Corporate Income Tax, the following rules apply to foreign enterprises with taxable income in Vietnam:

• A foreign enterprise with a permanent establishment in Vietnam pays CIT on taxable income earned within and outside Vietnam related to the operations of that establishment.
• A foreign enterprise with a permanent establishment in Vietnam also pays CIT on taxable income earned within Vietnam that is not related to the operations of that establishment.
• A foreign enterprise without a permanent establishment in Vietnam pays CIT only on taxable income earned within Vietnam.

CIT is calculated based on the assessable income of the firm and the applicable tax rate. Assessable income in a tax period is determined as taxable income minus tax-exempt income and losses carried forward from previous years. Taxable income is derived from revenue minus deductible expenses for production and business activities, plus other incomes received, including those outside Vietnam.

In Vietnam, the standard CIT rate for all enterprises is 20 percent. However, there are exceptions:

• CIT rates for petroleum operations can range from 25 to 50 percent depending on the terms of each petroleum contract.
• The exploration and extraction of other rare and precious resources in Vietnam are subject to CIT rates ranging from 32 to 50 percent, varying according to each project and business establishment.

Personal Income Tax (PIT)

PIT is based on the legal definition of tax residency. To be labeled a ‘tax resident’ in Vietnam, the individual must satisfy one or more of the following conditions:

• Residing in Vietnam for more than 183 days;
• Has a registered residence in Vietnam as indicated in temporary or permanent residence cards; and
• Has, within a tax year, rented accommodation for more than 183 days.

The Law on Personal Income Tax recognizes 10 categories of income, based on which deductions, rates, and exceptions are defined. For instance, incomes exempt from tax include overseas remittance, interest earned on bank deposits, and income from insurance compensations.

For foreign workers based in Vietnam, determining PIT liability depends on establishing residency definitions, identifying income categories, and considering any applicable deductions.  

This article was originally published January 25, 2021. It was last updated July 16, 2024.

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