Vietnam Tax Updates August 2026: Key VAT, CIT, PIT, Foreign Contractor Tax, Tax Administration Changes
Vietnam’s tax landscape continues to evolve, with several important changes and clarifications taking effect or being introduced in August 2026. This month’s updates cover key developments in Value Added Tax (VAT), Corporate Income Tax (CIT), Personal Income Tax (PIT), Foreign Contractor Tax (FCT), and tax administration.
Businesses and foreign-invested enterprises operating in Vietnam should pay close attention to these changes to stay compliant, avoid potential tax risks, and ensure timely adjustments to their tax and accounting practices.
Outstanding new points in Circular 89/2026/TT-BTC updated and amended in Official Letter No. 5746/CT-CS dated August 10, 2026
1. Tax calculation period for newly operating taxpayers
– According to Circular 89/2026/TT-BTC, updated and amended in Official Letter No. 5746/CT-CS dated August 10, 2026, newly established enterprises are allowed to default to quarterly VAT declarations. However, if the enterprise’s revenue in its first calendar year exceeds VND 50 billion (even if the enterprise has operated for less than 12 months in that financial year), it must mandatorily switch to monthly VAT declarations starting from the immediate next calendar year.
2. VAT Refund Dossier for Goods and Services subject to the 5% VAT rate
– New regulations govern the components of the input VAT refund application dossier for manufacturing goods and supplying services subject to the preferential 5% VAT rate. Accordingly, starting from the July 2026 tax period, taxpayers are required to declare the VAT refund claim directly on the VAT Return (Form No. 01/GTGT) and submit together with the Appendix on VAT Refund Claim Information (Form No. 01-8/GTGT) as the basis for the tax authority to review and process the refund request.
According to the Resolution of the National Assembly on CIT reductions voted and approved on the afternoon of August 24, 2026, at the First Extraordinary Session of the 16th National Assembly
30% CIT Reduction for Tax Periods 2026 and 2027
– A 30% reduction of CIT payable is granted to enterprises and organizations legally established under Vietnamese law with an annual total revenue of no more than VND 10 billion for the 2026 and 2027 tax periods. For enterprises currently enjoying other CIT incentives, the reduced tax amount will be calculated based on the actual CIT payable after deducting those existing tax incentives. For enterprises currently enjoying other CIT incentives, the reduced tax amount will be calculated based on the actual CIT payable after deducting those existing tax incentives. This Resolution takes effect from August 24, 2026, and applies directly to the tax periods of 2026 and 2027.
Pursuant to Official Letter No. 7299/CTH-QLDN1 dated August 17, 2026 guiding the implementation of Decree No. 253/2026/NĐ-CP and the new PIT Law
30% reduction of PIT payable for the tax periods of 2026 and 2027 for business individuals
– Implementing a 30% reduction of PIT payable on income arising from production and business activities of resident individuals (including business households and individual businesses) with an annual revenue of no more than VND 10 billion.
According to Circular 89/2026/TT-BTC updated in Official Letter 5746/CT-CS (August 10, 2026) and several new points in Circular 94/2026/TT-BTC
1. Shortening the time limit for tax payment extensions and late payment interest waivers
– The maximum time limit for tax authorities to assess and resolve dossiers requesting tax payment extensions, penalty waivers, or late payment interest waivers for enterprises is shortened from 10 working days to 07 working days.
2. Prioritizing tax refunds for highly compliant enterprises
According to the guidance in Circular No. 94/2026/TT-BTC on tax risk management, applying 3 risk levels: High risk, Medium risk, and Low risk
– High Risk: For taxpayers with high-risk tax refund dossiers, physical inspection at headquarters will be increased, with a mandatory “inspect first, refund later” approach applied to VAT, and post-refund audits conducted within 1 year.
– Medium Risk: For taxpayers with medium-risk tax refund dossiers: Within 03 years from the date of issuance of the refund decision, tax authorities will apply the “refund first, inspect later” method.
– Low Risk: For taxpayers with low-risk tax refund dossiers: Within 05 years from the date of issuance of the refund decision, tax authorities will apply the “refund first, inspect later” method.
3. General regulations on tax filing, calculation, and allocation
– Pending address changes: In case the tax filing deadline is due but the taxpayer has not completed procedures to change the headquarters address with the business registration authority or the tax office of the destination, the taxpayer must submit tax filing to the tax office of the departure location.
– Incorrect allocation: In case audits find that the taxpayer declared or allocated incorrectly, the directly managing tax authority will re-determine the amount to be allocated to the recipient provinces and handle administrative violations as prescribed (if any).
– No late payment interest on incorrect allocation: In case the taxpayer pays fully and on time but to the incorrect allocation area, the taxpayer will not have to pay late payment interest for the underpaid tax amount in the receiving allocation area. The directly managing tax authority will guide the taxpayer on performing a tax review or a refund-cum-offset procedure to adjust the revenue to the correct jurisdiction.
Pursuant to Official Letter No. 5746/CT-CS dated August 10, 2026
VAT and CIT Tax Filing for Foreign Contractors and Foreign Subcontractors
– Amendments to the tax filing regulations for cases where Corporate Income Tax is calculated as a percentage of taxable revenue. Under the revised regulations, taxpayers are only required to submit a final tax declaration upon completion of a foreign contractor contract if there is a change (increase or decrease) in the amount of tax previously declared and paid.
– This completely abolishes the mandatory finalization obligation in all cases as previously required, and eliminates a series of accompanying documents such as Copies of the business registration certificate or professional practice license, a schedule of tax payment vouchers, the contract liquidation report, and appendices detailing the allocation of VAT payable by the foreign contractor to the localities entitled to receive the tax revenue.
Conclusion
The Vietnam Tax Updates August 2026 bring important changes and clarifications across VAT, CIT, PIT, Foreign Contractor Tax, and tax administration, including updates that may affect tax declarations, reporting obligations, and compliance procedures.
Businesses should review these changes carefully to understand how they may affect their tax compliance and reporting obligations, and make timely adjustments where necessary.
If you need assistance in interpreting these regulations or assessing their impact on your business, contact Vina TPT. Our accounting and tax professionals can provide practical guidance and support your business in maintaining compliance with Vietnam’s latest tax requirements.
