This guide is for Spanish companies that sell services or licences to Vietnamese customers, or that already have or are setting up a company in Vietnam. By the end you will know which taxes apply in each case, at what rates (with 2025 and 2026 figures), when they are filed and what changes thanks to the tax treaty between Spain and Vietnam.
Two different tax situations
Before looking at rates, it helps to separate two scenarios, which Vietnam treats very differently:
- You invoice from Spain with no presence in Vietnam. If your Spanish company provides a service, grants a licence or lends money to a Vietnamese company, Vietnam treats you as a "foreign contractor". You normally do not register there: the Vietnamese customer withholds the tax when paying you. This is the foreign contractor tax (FCT).
- You operate through a Vietnamese company. If you have set up a subsidiary (explained in our guide on how to set up a company in Vietnam as a foreigner), that company is a Vietnamese taxpayer like any other: it pays corporate income tax, handles VAT, withholds its employees' personal income tax and files audited accounts.
There is an in-between case: the representative office. As it cannot generate revenue, it does not file an annual corporate income tax return, although it must withhold income tax on its staff. The differences between the options are covered in our guide on representative office, branch or company.
Corporate income tax (CIT)
The 2025 law and current rates
Vietnam passed a new Law on Corporate Income Tax (Law 67/2025/QH15), in force since 1 October 2025 and already applicable to the 2025 tax year. The rates are as follows:
| Rate | Who it applies to |
|---|---|
| 20% | Standard rate |
| 17% | Companies with annual revenue above VND 3 billion and up to VND 50 billion |
| 15% | Companies with annual revenue up to VND 3 billion |
| 25%–50% | Oil and gas, depending on each contract |
| 40%–50% | Certain mining and scarce-resource activities |
Eligibility for the 15% or 17% rate is based on the previous year's revenue. Be careful with subsidiaries: according to the official summary of the law, the reduced rate does not apply to a subsidiary or related company when the related company does not itself meet the requirements. If your subsidiary is part of a larger group, do not assume the reduced rate.
There are also preferential rates (10%, 15% or 17% for a set period) and temporary exemptions for projects in incentivised sectors or locations. For the most favourable cases, the official summary describes up to 4 years of exemption followed by a 50% reduction for up to 9 more years. They are granted per project, not for being foreign, and should be confirmed before you invest.
Scope: worldwide income and digital platforms
Vietnam has no concept of tax residence for companies: a Vietnamese company is taxed on its worldwide income, and income earned outside Vietnam is taxed at 20% with no incentives. The 2025 law also expressly covers foreign suppliers selling goods or services in Vietnam through digital or e-commerce platforms.
Deductible expenses: what gets scrutinised most
Some rules worth knowing from the first year, according to PwC's summary (reviewed in September 2026):
- Losses can be carried forward against profits for the following 5 years. There is no carry-back.
- If you have related-party transactions, deductible interest is capped at 30% of EBITDA.
- Payments to the parent company or other group companies (management services, licences, interest) must be at market value and documented under transfer pricing rules.
- Fines, penalties and taxes themselves are not deductible.
- Salaries are only deductible if they have actually been paid and are set out in the employment contract, the collective labour agreement or the company's internal regulations.
Global minimum tax
If your subsidiary belongs to a multinational group with consolidated revenue of at least €750 million in 2 of the previous 4 years, it is subject to the top-up tax under Resolution 107/2023/QH15, in effect since the 2024 tax year. Its aim is for the group to pay at least 15% tax in Vietnam, which can reduce the real value of tax incentives. It does not apply to most SMEs.
VAT (thuế giá trị gia tăng)
Rates in 2026
VAT is governed by Law 48/2024/QH15, in force since 1 July 2025 and amended with effect from 1 January 2026. There are three rates:
- 10%, the standard rate.
- 5%, for certain essential goods and services (for example, clean water).
- 0%, for exports of goods and services, international transport and a few other cases.
In addition, there is a temporary reduction to 8% for most goods and services taxed at 10%, under Resolution 204/2025/QH15 and Decree 174/2025/NĐ-CP. It applies from 1 July 2025 to 31 December 2026. Excluded sectors include telecommunications, finance, banking, securities, insurance, real estate, metal products, mining (except coal) and goods subject to special consumption tax (except petrol). If your business is close to any of these sectors, check the decree's annex. From 2027 the reduction ends unless it is extended.
Exporting services from Vietnam
If your subsidiary provides services to foreign companies (for example, software development for the Spanish parent), it can apply 0% provided the service is supplied directly to a foreign organisation and consumed outside Vietnam. The costs of this model are covered in our guide on the cost of software development in Vietnam. Applying 0% requires consistent contracts and payment records, and it is one of the items the tax authority checks most closely.
Input VAT credit and refunds
To claim input VAT, the law generally requires the purchase to have been paid by non-cash means, with exceptions set by the Government; the 2024 law removed the old exemption for low-value purchases. VAT refunds are subject to specific conditions depending on the type of activity, so do not build them into your cash-flow plan without confirming them first. E-invoicing has been mandatory since July 2022.
Foreign contractor tax (FCT): when you invoice from Spain
How it works
FCT is not a separate tax but the way Vietnam collects VAT and corporate income tax from foreign companies with no registered presence in the country. Under the usual method (known as the direct method), the Vietnamese customer applies fixed rates to the contract value, withholds the tax and pays it to the tax authority. You receive the net amount, unless the contract states that the price is net of tax and the customer bears the cost.
Rates by activity
These are the rates listed by PwC in its summary reviewed in September 2026. The implementing regulations were updated in 2025 and 2026, so confirm the exact rate for your contract before agreeing the price:
| Activity | VAT (%) | Corporate income tax (%) |
|---|---|---|
| Services in general (consulting, management, digital services) | 5 | 5 |
| Supply of goods with delivery or risk in Vietnam | Exempt or 1 | 1 |
| Construction and installation | 3 or 5 | 2 |
| Transport | 3 (0% international) | 2 |
| Royalties (software licences, technology, trademarks) | Exempt or 5 | 10 |
| Loan interest | Exempt | 5 |
| Other activities | 2 | 2 |
Software licences, technology transfer and intellectual property rights are exempt from VAT; other royalties may be taxable. A Spanish company charging a Vietnamese customer for consulting services therefore bears total withholding of around 10% of the amount; the exact calculation depends on whether the agreed price includes tax or not.
Practical steps for the Spanish company
- Before signing, state in the contract whether the price is gross (you bear the FCT) or net (the customer bears it). This is the point that eats into margins most.
- Classify the payment correctly. A service (5% + 5%) is not the same as a royalty (10% corporate income tax). If a contract mixes licence, implementation and support, it is worth splitting it out.
- Ask the customer for proof of the tax paid. You will need it in Spain to apply the treaty and avoid paying twice.
- Watch how long your people are physically present. If your staff spend a lot of time in Vietnam, you may create a permanent establishment (see the next section), and the treatment changes.
The Spain–Vietnam tax treaty
Spain and Vietnam have a double taxation treaty, signed in Hanoi in 2005 (published in the Spanish Official Gazette, BOE, on 10 January 2006) and modified by the OECD multilateral instrument (MLI), effective in Vietnam from 2024 for withholding taxes and from 2025 for other taxes. The most useful points:
| Item | Treaty limit in Vietnam | What applies in practice |
|---|---|---|
| Dividends to a company holding at least 50% | 7% | 0%: Vietnam does not withhold on corporate shareholders |
| Dividends to a company holding 25%–50% | 10% | 0% |
| Other dividends | 15% | 0% for companies; 5% for individuals |
| Interest | 10% | 5% (the domestic rate is lower) |
| Royalties | 10% | 10% |
As PwC points out, treaty limits are usually equal to or higher than Vietnam's domestic rates, so the domestic rate generally applies. The treaty's value lies instead in two other points:
- Permanent establishment. A building site or installation project creates a permanent establishment if it lasts more than six months. Providing services, including consulting, also creates one if your staff work in Vietnam on the same project for more than six months in any twelve-month period. With a permanent establishment, Vietnam can tax the attributable profit rather than just applying withholding.
- Eliminating double taxation in Spain for the taxes paid in Vietnam on that income.
Dividends and profit repatriation
Vietnam does not withhold tax on dividends paid by a Vietnamese company to corporate shareholders. If the shareholder is an individual, 5% is withheld.
To repatriate profits, the subsidiary normally has to:
- Have closed the financial year with positive retained earnings and no loss for the year.
- Have filed its audited annual financial statements and final corporate income tax return, and be up to date with its taxes.
- Notify the local tax authority of the distribution, which has seven days to object before the bank releases the payment.
- Transfer the money through the company's direct investment capital account.
Filing calendar
For a Vietnamese company with a calendar financial year, which is the norm:
| Obligation | Deadline |
|---|---|
| Provisional corporate income tax payment | Quarterly, by the 30th day of the month after the quarter |
| Minimum provisional payments | 80% of the final tax for the year |
| Annual return and audited accounts | Last day of the third month after year end (31 March) |
| Statute of limitations | 10 years for tax, 5 for penalties |
If the four provisional payments fall short of 80%, the difference accrues late-payment interest from the fourth-quarter deadline. PwC warns that tax audits have become stricter and that delays uncovered during an audit usually end in penalties.
On top of this come personal income tax withholding and employee social contributions, which we explain in our guide to salaries in Vietnam. And if you also sell goods to Vietnam, customs duties are covered in our guide on the EU–Vietnam free trade agreement.
Common mistakes
- Setting the price without factoring in FCT. A services quote agreed "gross" can lose around 10% when it is paid.
- Applying 8% VAT without checking the sector. The reduction has excluded sectors and, unless extended, ends on 31 December 2026.
- Charging the subsidiary for parent company services without documenting them. Transfer pricing rules can make them non-deductible.
- Sending staff "just passing through" for months. Spending more than six months on a project can create a permanent establishment.
Planning your tax position from the outset is part of a sound Vietnam market entry: it shapes your structure, your pricing and your cash-flow timeline.
Frequently asked questions
Do I have to register with the Vietnamese tax authority if I only invoice from Spain?
Usually not. Under the direct method, the Vietnamese customer files and pays the foreign contractor tax on your behalf. If your activity in Vietnam grows or your team spends long periods there, check whether you have created a permanent establishment.
How much corporate income tax does a small subsidiary pay?
Since the 2025 law, 15% if its revenue in the previous year did not exceed VND 3 billion, and 17% if it was between VND 3 billion and VND 50 billion. Above that, 20%. The reduced rate may not apply if the subsidiary is related to companies that do not meet the requirements.
How long does the 8% VAT rate apply?
Until 31 December 2026, under Resolution 204/2025/QH15 and Decree 174/2025/NĐ-CP. It only covers goods and services taxed at 10% that are not in the excluded sectors. Keep an eye on whether an extension into 2027 is approved.
Does Vietnam withhold tax on dividends the subsidiary pays to its Spanish parent?
No, when the shareholder is a company. The subsidiary must, however, first meet a series of requirements (audited accounts, taxes settled, notification to the tax authority) and transfer the money from its direct investment capital account.
How Agilean can help
At Agilean we help Spanish and European companies understand Vietnam's tax framework before they decide how to operate in the country. Our team in Ho Chi Minh City helps you compare scenarios (invoicing from Spain, an office or a subsidiary) and coordinates registration, filings and documentation with local accounting and tax firms. You can see how we work on our Vietnam market entry page.