Vietnam Tax Compliance in 2025: What Newcomers Should Do?

Navigating the complex tax landscape in Vietnam is crucial for newcomers looking to invest or operate in the country. With evolving regulations and local laws that can significantly impact business finances, understanding the intricacies of taxation, accounting, and auditing is essential.

When entering a new market, it is essential for investors to understand the local legal landscape. Among these various legislations, regulations on taxation, accounting, and auditing are some of the most crucial frameworks that shape business financial planning and management. Without a clear understanding of these regulatory requirements, companies often encounter major compliance issues.

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In Vietnam, companies usually face legal consequences for not complying with tax laws and accounting standards within three to five years of their initial investment, which can lead to heavy penalties. These issues often stem from poor preparation, weak internal control systems, and a lack of deep knowledge of tax laws and related regulations, possibly causing tax risks and financial inaccuracies.

To prevent these problems, businesses should implement strategic measures to comply with local accounting and audit standards, as well as other local regulations, thereby reducing the risk of tax violations and financial misconduct.

Establishing the foundation early with internal control

A robust internal control (IC) system should be established at the earliest stage of investment. This is not only to ensure compliance but also to align the subsidiary’s control structure with the group’s overall internal audit and governance framework. To achieve this balance, investors should consider the following steps:

Study local regulations

Investors should understand that each country has its own set of tax, accounting, and legal frameworks. For example, in Vietnam, the current accounting system follows the Vietnamese Accounting Standards (VAS), which are rule-based. The government has announced plans to adopt IFRS starting in 2026; however, detailed implementation guidance has not yet been issued.

This upcoming change requires investors to thoroughly understand the regulatory environment and develop appropriate action plans. In particular, creating an accounting and internal control system capable of adapting to Vietnam’s changing financial reporting standards will be crucial to ensure compliance and readiness during this period of regulatory transition.

Adjust policies with local rules

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Enhancing internal audit and risk management

When group or internal policies already align with local laws, these policies can be maintained to ensure consistency. However, if any internal policies conflict with local regulations, companies must modify them to ensure financial statements remain accurate, relevant, and compliant.

Additionally, companies should always seek to optimize their tax position by deepening their understanding of local tax laws and their practical application.

Challenges in Vietnam’s rapidly changing tax environment

Vietnam published new tax policies in 2025, presenting both challenges and opportunities for businesses. Tax law is fundamentally complicated. To qualify for tax incentives or exemptions, companies must fully understand the eligibility criteria and the required documentation.

Since tax laws are designed to address a broad spectrum of business types and circumstances, companies often face the challenge of identifying which provisions are relevant to their specific operations. In practice, not all business operations exactly match the law’s language, creating a “grey zone” that depends on each company’s compliance practices.

To tackle this problem, firms are recommended to:

• Stay proactive in updating and interpreting new regulations.
• Consult professional advisors to assess how changes may impact their specific business model; and
• Continuously strengthen internal controls to minimize compliance and tax risks.

Case Study: Maintaining compliance with Vietnam’s VAT regulation update

Decree No. 181/2025/ND-CP is a recent example of how regulatory shifts in Vietnam’s tax environment are driving stronger corporate governance standards.

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The decree reflects Vietnam’s efforts to tighten control over input VAT deductions and improve fiscal transparency. It mandates that purchases of goods or services valued at VND 5 million or more must be paid through non-cash methods to qualify for VAT deduction. If, by the contractual due date, a company fails to provide valid proof of non-cash payment, it must adjust and reduce the deductible VAT for that tax period.

In practice, this provision has prompted many enterprises to review their internal financial controls. Companies are strengthening their payment and accounts payable processes, ensuring timely invoice settlements, and formalizing contingency procedures to handle cases where payments cannot be completed on time. These changes not only protect VAT rights but also enhance overall compliance readiness.

As fiscal oversight grows more rigorous, enterprises that maintain disciplined control systems and proactive tax compliance strategies will be better positioned to operate efficiently and sustainably in the long term.

Key tax updates in Vietnam for 2025

In 2025, there are three key tax updates that businesses operating in Vietnam should pay attention to, including:

Corporate income tax

Under a new regime, Vietnam’s corporate income tax (CIT) rate is reduced and the incentives for small and medium-sized enterprises are expanded to 15 or 17 percent, subject to specific conditions. Industrial park CIT incentives are no longer available. Investment, expansion, and high-tech projects remain eligible for tax incentives; however, the qualifying conditions have become more stringent.

Global minimum tax

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Under a newly introduced directive on the implementation of the global minimum tax (GMT) in Vietnam, large multinational enterprises (MNEs) are required to pay a minimum of 15 percent CIT on profits in each jurisdiction in which they operate.

The directive also includes provisions to implement international standards on the Global Minimum Tax (QDMTT). MNEs should begin preparing data and assessing potential impacts early.

Value-added tax

The 2024 Value-Added Law strengthens the non-cash payment requirement for purchases of VND 5 million or more. As a result, companies must adjust their input VAT deductions if payment proof is not available by the deadline.

Takeaway

A solid grasp of local regulations, coupled with the early development of an effective internal control system, is crucial for sustainable investment. Compliance should be regarded not as an expense but as an investment in long-term stability, credibility, and growth.

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