Tax policy amendments have improved the conditions facing foreign businesses operating in Vietnam.

This view was shared by participants at a January 17 dialogue between the HCM City Tax Department and the European Chamber of Commerce in Vietnam (EuroCham).

Representatives from the city’s tax department answered questions regarding tax payments and deductions for agricultural businesses and enterprises expanding operations over 2009–2014.

They also explained payment methods for the value added tax levied on international cargo transport services. 

Chairman of the EuroCham Taxation Committee, Thomas McClelland, said corporate tax rates have been cut from 25% to 22% and will drop further to 20% in 2016.

Small and medium-sized enterprises will enjoy a 20% tax rate reduction at present but can expect a 17% drop by 2016.

McClelland underscored these positive moves will encourage foreign businesses to expand their Vietnamese market operations.

He warned foreign businesses still face a number of difficulties keeping abreast of the latest developments in Vietnamese tax policy. Taxation officials should provide a greater degree of practical assistance and guidance.

Deputy Head of the HCM City Tax Department Tran Thi Le Nga summarised taxation policy updates regarding value added tax and corporate tax amendments in the Government’s Decrees.

She also affirmed HCM City’s commitment to providing the conditions most conducive to both local and foreign businesses honouring their tax obligations.