Core Service

Foreign contractor tax in Vietnam for foreign companies

FCT compliance, treaty relief, direct-filer registration, and digital-service tax for foreign suppliers without a Vietnamese PE.

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Overview

Foreign contractor tax (FCT) is the deemed-tax regime that applies when a foreign company provides services, transfers technology, or supplies goods with installation in Vietnam, and does not have a Vietnamese permanent establishment. The Vietnamese customer must withhold FCT and remit to the GDT. Our FCT service covers the full cycle: registration, withholding, treaty relief, and direct-filer support.

Who needs this service

  • Vietnamese companies paying foreign suppliers for services or royalties
  • Foreign suppliers without a Vietnamese PE that want to register as a direct filer
  • Foreign digital-service providers selling to Vietnamese customers
  • Holding companies receiving royalties or service fees from Vietnam

Legal requirements

FCT withholding

The Vietnamese customer must withhold FCT (deemed VAT and PIT) on each payment to a foreign contractor without a PE.

Treaty relief

Treaty relief is available for residents of countries with a DTA. Requires a Certificate of Residence from the home-country tax authority.

Direct filer registration

A foreign contractor with a Vietnamese PE may register as a direct filer and pay CIT/VAT on actuals.

Pricing

Indicative fees

ItemFee
FCT registration and monthly compliancefrom USD 300 / month
Treaty relief applicationfrom USD 500 per contractor
Direct filer registrationfrom USD 3,000

Fees are indicative and depend on transaction volume, complexity, and reporting requirements. Request a tailored proposal.

Timeline

Typical engagement timeline

Phase 1 · Week 1

Assessment

Determine whether FCT applies, the rate, and treaty relief availability.

Phase 2 · Week 2

Setup

Treaty documentation, withholding system, declaration calendar.

Phase 3 · Monthly

Ongoing

Monthly withholding, declaration, and remittance to the GDT.

Watch out

Common mistakes we help you avoid

  • 01Treating an offshore service as outside FCT scope without the supporting documentation
  • 02Not applying treaty relief because the CoR was not obtained in time
  • 03Using the wrong deemed rate for the activity type
  • 04Failing to withhold when the foreign contractor is non-resident
Why us

What you get

Treaty relief maximised

We obtain the CoR, prepare the application, and apply treaty relief to reduce the PIT rate.

Direct filer option

For high-volume contractors, direct filer registration often reduces the total tax burden.

Digital-service ready

We act as tax representative for foreign digital-service providers, with quarterly FCT filings via the GDT portal.

FAQ

Frequently asked questions

When does FCT not apply to offshore services?
FCT does not apply where services are performed entirely outside Vietnam and consumed outside Vietnam. The exemption requires documented evidence: a contract identifying the place of performance, beneficiary location, and beneficiary-bank evidence. We help assemble the file.
Can a foreign contractor register as a direct filer?
Yes. A foreign contractor with a Vietnamese permanent establishment can register as a direct filer and pay CIT/VAT on actuals, avoiding the deemed regime. We assist with the registration and the ongoing compliance.
How is digital-service FCT paid?
Foreign providers of digital services to Vietnamese consumers use the GDT's e-portal to register, declare quarterly, and pay FCT. We act as tax representative and handle the filings.
What is the FCT rate on royalties?
Royalties are typically subject to VAT 5% + PIT 10% (treaty rates commonly reduce PIT to 5–10%). The Vietnamese payer withholds and remits.
Get Started

Ready to discuss foreign contractor tax?

Free 30-minute consultation. We'll review your situation and outline a fixed-fee engagement.

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