- Foreign businesses must factor in Vietnam’s 10% VAT on most cross-border digital and service transactions, impacting pricing and margins.
- VAT applies based on where services are consumed, not supplier location; even offshore services benefiting Vietnam users can be taxed.
- Foreign suppliers must register for VAT or risk customers withholding VAT, affecting cash flow and revenue recognition.
- VAT compliance (registration, invoicing, reporting) is required before any revenue is generated to avoid payment delays or rejected invoices.
- B2B VAT is usually recoverable by customers, while B2C VAT is a final cost; zero percent VAT only applies to services consumed outside Vietnam, with strict rules and potential retrospective reclassification.
Source: fiscal-requirements.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.
