- Most cross-border digital and service transactions in Vietnam are subject to a 10% VAT, impacting pricing and profitability for foreign businesses.
- VAT liability is based on where services are consumed, not where the supplier is located, exposing offshore models to Vietnamese tax.
- Foreign suppliers must choose between registering for VAT to control tax handling or letting Vietnamese customers deduct VAT, affecting cash flow and revenue recognition.
- VAT compliance is required from the first transaction, so businesses must have registration and reporting systems in place before generating revenue.
- Failure to address VAT upfront can lead to reduced competitiveness, lower profits, payment delays, and contract issues.
Source: aseanbriefing.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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