Vietnam has introduced new guidance on corporate income tax (CIT) applicable to foreign contractors, effective from 12 March 2026 and applicable from the 2025 tax period. The new rules clarify how taxable revenue is determined and replace relevant provisions under the previous Foreign Contractor Tax framework. In particular, the treatment of VAT in the CIT tax base may affect tax calculations and gross-up arrangements. Transitional provisions also allow certain existing contracts to continue under the previous rules until expiry. Businesses making cross-border payments to foreign contractors should review their agreements and assess whether their tax calculations and compliance procedures need to be updated.

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