Corporate Income Tax (CIT)

Overview of Corporate Income Tax in Vietnam

Corporate income tax (CIT) is one of the main taxes that companies operating in Vietnam must pay. Vietnam’s corporate income tax policy has a standard tax rate and a variety of preferential tax rates to support the development of specific industries and attract foreign investment. The following are the main tax rates and their applicable conditions for corporate income tax in Vietnam:

Standard rate: 20%

Scope of application: Applicable to most industries and enterprises, including enterprises carrying out production and business activities in Vietnam.

Preferential tax rates:

10% Tax Rate:

Scope of application: Applicable to investment projects in specific industries or regions, such as high-tech industries, education, training, health, culture, etc. The tax rate can be applied for up to 15 years, depending on the nature and region of the project.

Additional benefits: Under certain special circumstances, companies may also receive additional tax benefits, such as tax exemptions or tax deferrals.

17% Tax Rate:

Scope of application: Applicable to certain encouraged investment projects, usually projects of strategic significance to Vietnam’s economic development or investments in underdeveloped areas. The preferential tax rate is usually valid for 10 years.

Special industry tax rates:

Oil and gas industry: 32%-50%

Scope of application: Mainly applicable to Vietnamese oil and gas exploration, mining and production enterprises. Due to the high risk and high profit of this industry, the tax rate is relatively high, and the specific tax rate depends on the complexity of the project and the investment agreement.

Mining industry: 40%-50%

Scope of application: Applies to companies involved in the exploration, mining and processing of mineral resources. Similar to the oil and gas industry, the tax rate for this industry is also higher to reflect its high profit potential and resource protection requirements.

Overview of China’s Corporate Income Tax

China’s corporate income tax (CIT) is one of the main taxes that all companies producing and operating in China must pay. China’s corporate income tax system not only has a unified standard tax rate, but also provides preferential tax rates for specific types of companies and industries to support the development of key national development areas and small and medium-sized enterprises. The following are the main tax rates and their applicable conditions for China’s corporate income tax:

Standard rate: 25%

Scope of application: Applicable to most enterprises registered and operating in China. The standard tax rate is 25%, which is the main tax rate for corporate income tax in China at present, and is applicable to general production and non-production enterprises.

Preferential tax rates:

High-tech enterprises: 15%

Scope of application: High-tech enterprises include enterprises engaged in research, development, production and sales in the field of high-tech that is supported by the state. Such enterprises can enjoy a preferential tax rate of 15% after being recognized by the state. This policy aims to encourage scientific and technological innovation and promote the development of high-tech industries.

Application conditions: Enterprises must meet certain indicators such as the proportion of R&D investment, the proportion of high-tech product revenue, the number of intellectual property rights, etc., and must be recognized by relevant national departments.

Small and micro-profit enterprises:

Tax rate: 20% (taxable income does not exceed RMB 1 million) or 10% (taxable income does not exceed RMB 3 million)

Scope of application: For small and micro-profit enterprises, the government provides them with more preferential tax policies to reduce their tax burden and support their survival and development.

For small and micro-profit enterprises with annual taxable income not exceeding RMB 1 million, the actual tax rate is 20%.

For small and micro-profit enterprises with annual taxable income between RMB 1 million and RMB 3 million, the actual tax rate is 10%. This tiered preferential policy encourages small and medium-sized enterprises to accumulate capital faster and expand their scale.

Overview of Corporate Income Tax in Singapore

Singapore has attracted many global companies to invest and set up headquarters with its competitive tax system. Singapore’s corporate income tax (CIT) features a low standard tax rate and a series of tax exemption programs, designed to encourage corporate growth and enhance Singapore’s attractiveness as a global business hub. The following are the main corporate income tax rates in Singapore and their applicable policies:

Standard rate: 17%

Applicable to: Applicable to all companies registered and operating in Singapore. The standard tax rate of 17% is among the lowest in the world, making Singapore an important destination for global companies.

Partial Income Exemption Program:

To support the development of start-ups and small businesses, the Singapore government provides a partial income exemption program to reduce their tax burden. The program is divided into two stages, giving different degrees of exemption to the company’s first S$200,000 of taxable income:

75% exemption on first S$100,000:

Scope of application: A company will be exempted from 75% of its first S$100,000 of taxable income in a tax year. This means that the company only needs to pay corporate income tax on 25% of the first S$100,000 of income.

50% exemption for the first S$100,000:

Applicability: A company will be exempted from 50% tax on the first S$100,000 of its taxable income in a tax year. This means that the company only needs to pay corporate income tax on 50% of this income.

For example:

Assuming a company’s taxable income in Singapore is S$200,000, under the exemption scheme:

For the first S$100,000: 75% or S$75,000 is exempted, and only S$25,000 is taxed.

For the next S$100,000: 50% or S$50,000 is exempted and only S$50,000 is taxed.

In this case, the company’s actual taxable amount is S$25,000 + S$50,000 = S$75,000. Calculated at a tax rate of 17%, the final corporate income tax burden is S$12,750.

Overview of Japanese Corporate Income Tax

Japan’s corporate income tax system is relatively complex, consisting of national and local taxes. The tax rate varies according to the size of the company and the amount of taxable income. The standard tax rate is high, but the Japanese government also provides relatively favorable tax policies for small and medium-sized enterprises to support their development and innovation. The following are the main tax rates and applicable conditions for corporate income tax in Japan:

Standard tax rate: about 30.62% (including national tax and local tax)

Scope of application: Applicable to most companies in Japan. The standard tax rate consists of two parts:

National tax (corporate tax): 23.2%

Local taxes (corporate and resident taxes): Approximately 7.42%

Total: 30.62%

Characteristics: Japan’s standard tax rate is relatively high, reflecting its complex tax structure and the need for fiscal revenue by local governments.

Preferential tax rate for small and medium-sized enterprises: about 25.9%

Scope of application: The Japanese government provides preferential tax policies for qualified small and medium-sized enterprises:

National tax (corporate tax): 19%

Local tax: Same as standard tax rate, but slightly lower than standard tax rate due to lower corporate tax rate.

Total: Approximately 25.9%

Features: By reducing taxes on small and medium-sized enterprises, the Japanese government hopes to promote the growth and development of these enterprises, especially to encourage innovation and improve competitiveness.

Additional details:

Tax rate changes: Japan’s corporate income tax rate may change with local government policy adjustments. Local governments have a certain degree of freedom to adjust the tax rate of local taxes.

Additional taxes: In addition to the main corporate income tax, Japanese companies may also need to pay other taxes, such as consumption tax, capital gains tax, etc. The existence of these taxes may further affect the company’s overall tax burden.

Overview of Korean Corporate Income Tax

South Korea’s corporate income tax (CIT) adopts a progressive tax rate system, which is levied in stages according to the taxable income of the enterprise. In addition, South Korea also imposes local income tax as a supplement to national taxation. The following are the main tax rates and applicable conditions of South Korea’s corporate income tax:

Progressive tax rate: 10%-25% (based on taxable income)

South Korea’s corporate income tax rate increases with the increase of taxable income, reflecting the characteristics of a progressive tax system. The specific tax rates are as follows:

10% tax rate: Applicable to the portion of annual taxable income not exceeding 200 million KRW.

20% tax rate: Applicable to the portion of annual taxable income exceeding KRW 200 million but not exceeding KRW 20 billion.

22% tax rate: Applicable to the portion of annual taxable income exceeding KRW 20 billion but not exceeding KRW 300 billion.

25% tax rate: Applicable to the portion of annual taxable income exceeding KRW 300 billion.

This progressive tax rate system is designed to achieve tax fairness, ensuring that large companies bear more tax responsibilities as they earn more profits.

Local income tax: 10% of corporate income tax

Scope of application: Local income tax is a local tax levied on top of the national corporate income tax paid by enterprises.

Tax rate: 10% of the corporate income tax payable by the enterprise.

Features: The collection method of local income tax is relatively simple, directly calculated at 10% of corporate income tax. The income from local income tax is used to support local government public services and infrastructure construction.

For example:

Assume that a company’s annual taxable income in Korea is 30 billion won:

For the first 200 million won: 10% tax rate applies, pay 20 million won.

For the amount exceeding 200 million to 20 billion won: a 20% tax rate applies, with a payment of 3.96 billion won.

For the amount exceeding 20 billion to 30 billion won: 22% tax rate applies and 2.2 billion won is payable.

The final national corporate income tax was 6.18 billion won.

Adding local income tax (10% of corporate income tax), local income tax is 618 million won. Therefore, the total tax burden of the company is 6.18 billion + 618 million = 6.798 billion won.

Overview of Corporate Income Tax in Thailand

Thailand’s corporate income tax (CIT) system is relatively simple and straightforward, with a uniform standard tax rate and tiered preferential tax rates for small and medium-sized enterprises. This structure helps support the healthy development of all types of enterprises in the Thai economy, especially providing strong tax support for the development of small and medium-sized enterprises. The following are the main tax rates and their applicable conditions for corporate income tax in Thailand:

Standard rate: 20%

Scope of application: Applicable to most companies registered and operating in Thailand. The 20% standard tax rate is at a relatively reasonable level in Southeast Asia, which not only ensures the government’s tax revenue but also maintains its attractiveness to investors.

Preferential tax rates for small and medium-sized enterprises:

To support the development of small and medium-sized enterprises, the Thai government provides tiered preferential tax rates for enterprises with lower net profits, as follows:

Net profit not exceeding THB 300,000: 0%

Scope of application: Small and medium-sized enterprises with a net profit of no more than 300,000 baht can enjoy full tax exemption. This policy aims to reduce the tax burden on start-ups and micro-enterprises and help them accumulate capital and achieve growth in the early stages.

Net profit of 300,000 to 3 million baht: 15%

Scope of application: For the portion of net profit between 300,000 and 3 million baht, SMEs are required to pay a 15% corporate income tax. This preferential tax rate encourages SMEs to continue to invest and expand their business scale while making a certain profit.

Net profit exceeding 3 million baht: 20%

Scope of application: The portion of net profit exceeding 3 million baht is subject to the same 20% corporate income tax rate as the standard tax rate. This means that when the profits of SMEs reach a certain scale, their tax burden will gradually approach the level of large enterprises, ensuring the fairness of taxation.

For example:

Assuming that the annual net profit of a small and medium-sized enterprise in Thailand is 5 million baht, its corporate income tax calculation is as follows:

For the first 300,000 THB: 0% tax rate applies, no tax is payable.

For the portion between THB 300,000 and THB 3,000,000: a 15% tax rate applies, resulting in a tax of THB 405,000.

For the amount exceeding THB 3 million to THB 5 million: a 20% tax rate applies and the tax payable is THB 400,000.

The final total corporate income tax is 405,000 baht + 400,000 baht = 805,000 baht.

Overview of Corporate Income Tax in the Philippines

The corporate income tax system in the Philippines was adjusted in 2020, lowering the standard tax rate to improve the country’s competitiveness and attract more foreign investment. At the same time, the Philippine government provides a lower tax rate for small and medium-sized enterprises to support their development.

Standard rate: 25% (starting from 2020)

Scope of application: Applicable to all companies operating in the Philippines. Starting from 2020, the Philippines will reduce the standard corporate income tax rate from 30% to 25% to enhance the country’s investment attractiveness and regional competitiveness.

Preferential tax rate for small and medium-sized enterprises: 20%

Applicable to: Small and medium-sized enterprises with annual taxable income not exceeding 5 million Philippine pesos and total assets not exceeding 100 million Philippine pesos. Such enterprises can enjoy a preferential tax rate of 20%. This policy aims to reduce the tax burden of small and medium-sized enterprises and help them grow and expand their business faster.

Overview of Corporate Income Tax in Indonesia

Indonesia has also adjusted its corporate income tax in recent years to adapt to changes in the global economic environment. Indonesia’s standard tax rate will be 22% from 2022, but listed companies can enjoy additional tax rate reductions to encourage more companies to enter the capital market.

Standard rate: 22% (from 2022)

Scope of application: Applicable to all companies in Indonesia. Starting from 2022, Indonesia will set the standard corporate income tax rate at 22% to maintain fiscal stability and attract foreign investment.

Preferential policies for listed companies: 3% tax reduction

Scope of application: For qualified listed companies, an additional 3% tax reduction can be enjoyed. This means that the effective tax rate of listed companies can be reduced to 19%. This preferential policy is aimed at encouraging companies to list on the Indonesian Stock Exchange, increase market liquidity and promote the development of the capital market.

Personal Income Tax (PIT)

Overview of Personal Income Tax in Vietnam

Vietnam’s personal income tax (PIT) adopts different tax rate systems for residents and non-residents. Residents’ personal income tax is levied at a progressive tax rate, divided into 7 tax brackets, while non-residents are levied at a uniform fixed rate. The following are the main tax rates of Vietnam’s personal income tax and their application:

Progressive personal income tax rate for residents: 5%-35% (7 tax brackets)

Applicable scope: Applicable to individuals who reside in Vietnam for more than 183 days, or individuals who have a residence and intend to reside in Vietnam for a long time in a fiscal year. The progressive tax rate of resident individual income tax is divided into the following 7 tax brackets:

Tier 1: 5% (applicable to monthly income below VND 5 million)

Second level: 10% (applicable to monthly income between VND5 million and VND10 million)

Tier 3: 15% (applicable to monthly income between VND10 million and VND18 million)

Tier 4: 20% (applicable to monthly income between VND 18 million and VND 32 million)

Tier 5: 25% (applicable to monthly income between VND32 million and VND52 million)

Level 6: 30% (applicable to monthly income between VND52 million and VND80 million)

Level 7: 35% (applicable to the portion of monthly income exceeding VND 80 million)

This progressive tax rate system ensures that individuals with higher incomes bear a higher proportion of taxes, which is in line with the principle of income redistribution.

Non-resident individual income tax rate: 20%

Applicable to: Applicable to non-resident individuals who have resided in Vietnam for less than 183 days. The global income of such individuals is not subject to Vietnam’s personal income tax, and only their income earned in Vietnam is taxed. The personal income tax rate for non-residents is a uniform 20% and there is no progressive tax rate.

Tax calculation example

Assuming a resident individual’s monthly income is VND100 million, the personal income tax is calculated as follows:

First level: VND 5 million * 5% = VND 250,000

Second level: VND 5 million * 10% = VND 500,000

Third level: VND 8 million * 15% = VND 1.2 million

Level 4: VND 14 million * 20% = VND 2.8 million

Level 5: VND 20 million * 25% = VND 5 million

Level 6: VND 28 million * 30% = VND 8.4 million

Level 7: VND 20 million * 35% = VND 7 million

The final total personal income tax is: 250,000 + 500,000 + 1.2 million + 2.8 million + 5 million + 8.4 million + 7 million = 25.15 million VND.

Overview of China’s Personal Income Tax

China’s personal income tax (PIT) adopts a progressive tax rate system with 7 tax brackets ranging from 3% to 45%. For non-residents, a uniform tax rate of 20% is imposed. This tax system is designed to tax people of different income levels fairly.

Progressive personal income tax rate for residents: 3%-45% (7 tax brackets)

Scope of application: Applicable to resident individuals who have a domicile in China or have lived in China for 183 days or more. The progressive tax rates of individual income tax in China are divided into the following 7 tax brackets:

Tier 1: 3% (applicable to the portion of monthly income not exceeding RMB 3,000)

Second level: 10% (applicable to monthly income between RMB 3,001 and RMB 12,000)

Tier 3: 20% (applicable to monthly income between RMB 12,001 and RMB 25,000)

Level 4: 25% (applicable to monthly income between RMB 25,001 and RMB 35,000)

Level 5: 30% (applicable to monthly income between RMB 35,001 and RMB 55,000)

Level 6: 35% (applicable to monthly income between RMB 55,001 and RMB 80,000)

Level 7: 45% (applicable to the portion of monthly income exceeding RMB 80,000)

This progressive tax rate structure ensures that high-income people bear a higher proportion of the tax burden, promoting social fairness.

Non-resident individual income tax rate: 20%

Scope of application: Applicable to non-resident individuals who have resided in China for less than 183 days. The global income of non-residents is not subject to Chinese individual income tax. Only the income obtained in China is taxed at a uniform rate of 20%.

Overview of Personal Income Tax in Singapore

Singapore’s personal income tax (PIT) adopts a more sophisticated progressive tax rate system, which is divided into 11 tax brackets, ranging from 0% to 22%. Singapore’s tax rate for non-residents is set between 15% and 22%, depending on the type of income.

Progressive personal income tax rate for residents: 0%-22% (11 tax brackets)

Applicable scope: Applicable to resident individuals who have lived in Singapore for 183 days or more. Singapore’s personal income tax adopts a relatively loose tax rate structure. The specific tax levels are as follows:

Tier 1: 0% (applicable to annual income not exceeding S$20,000)

Tier 2: 2% (applicable to annual income between S$20,001 and S$30,000)

Tier 3: 3.5% (applicable to annual income between S$30,001 and S$40,000)

Tier 4: 7% (applicable to annual income between S$40,001 and S$80,000)

Tier 5: 11.5% (applicable to annual income between S$80,001 and S$120,000)

Tier 6: 15% (applicable to annual income between S$120,001 and S$160,000)

Tier 7: 18% (applicable to annual income between S$160,001 and S$200,000)

Tier 8: 19% (applicable to annual income between S$200,001 and S$240,000)

Tier 9: 19.5% (applicable to annual income between S$240,001 and S$280,000)

Tier 10: 20% (applicable to annual income between S$280,001 and S$320,000)

Tier 11: 22% (applicable to the portion of annual income exceeding SGD 320,000)

Singapore’s progressive tax rate design is intended to reduce the tax burden on low-income people while maintaining tax fairness for high-income people.

Non-resident individual income tax rate: 15%-22%

Application: Non-resident individual income tax rates vary according to the type of income:

Salary income: A uniform tax rate of 15% or the progressive tax rate applicable to residents, whichever is higher.

Other income: A uniform tax rate of 22%.

This differentiated tax rate reflects the Singapore government’s approach to tax management for different sources of income.

Overview of Personal Income Tax in Japan

Japan’s personal income tax (PIT) system consists of two parts: national tax and local resident tax. Personal income tax adopts a progressive tax rate with a total of 7 tax brackets. In addition, local governments also levy a unified local resident tax.

Progressive personal income tax rate for residents: 5%-45% (7 tax brackets)

Applicable scope: Applicable to individuals who have a domicile or have lived in Japan for one year. The progressive tax rate for resident individual income tax is divided into the following 7 tax brackets:

Tier 1: 5% (applicable to the portion of annual taxable income below 1.95 million yen)

Second tier: 10% (applicable to annual taxable income between 1.95 million and 3.3 million yen)

Tier 3: 20% (applicable to annual taxable income between 3.3 million and 6.95 million yen)

Tier 4: 23% (applicable to the portion of annual taxable income between 6.95 million yen and 9 million yen)

Tier 5: 33% (applicable to annual taxable income between 9 million yen and 18 million yen)

Tier 6: 40% (applicable to annual taxable income between 18 million and 40 million yen)

Tier 7: 45% (applicable to the portion of annual taxable income exceeding 40 million yen)

This progressive tax rate system ensures that high-income earners bear a greater tax burden, reflecting the fairness of taxation.

Local resident tax: 10%

Applicable scope: Applicable to all individuals who have a domicile or reside in Japan. Local resident tax is a fixed tax rate of 10% of the individual’s income tax payable, which is used for local government fiscal expenditure. This means that the actual tax burden of an individual is the sum of national tax and local resident tax.

Overview of Personal Income Tax in South Korea

South Korea’s personal income tax (PIT) also adopts a progressive tax rate structure with 8 tax brackets. At the same time, local governments in South Korea also levy local income tax, and the tax rate varies according to different incomes.

Progressive personal income tax rate for residents: 6%-45% (8 tax brackets)

Applicable scope: Applicable to individuals who have lived in Korea for 183 days or more. The progressive tax rate for resident individual income tax is divided into the following 8 tax brackets:

Tier 1: 6% (applicable to annual taxable income up to KRW 12 million)

Tier 2: 15% (applicable to the portion of annual taxable income between KRW 12.01 million and KRW 46 million)

Tier 3: 24% (applicable to the portion of annual taxable income between KRW 46.01 million and KRW 88 million)

Tier 4: 35% (applicable to the portion of annual taxable income between KRW 88.01 million and KRW 150 million)

Tier 5: 38% (applicable to annual taxable income between KRW 150 million and KRW 300 million)

Tier 6: 40% (applicable to the portion of annual taxable income between KRW 300 million and KRW 500 million)

Tier 7: 42% (applicable to annual taxable income between KRW 500 million and KRW 1 billion)

Tier 8: 45% (applicable to the portion of annual taxable income exceeding KRW 1 billion)

This tax rate design aims to achieve wealth redistribution and reduce income gap.

Local income tax: 0.6%-4.5%

Scope of application: Local income tax is a local tax levied at a certain rate on the basis of individual income tax. The specific tax rate varies according to the individual’s payable income tax:

Tax rate range: 0.6%-4.5%

Features: As income increases, local income tax rates also increase accordingly, further increasing the tax burden on high-income earners.

Overview of Personal Income Tax in Thailand

Thailand’s Personal Income Tax (PIT) system uses a progressive tax rate with 7 tax brackets. For non-residents, Thailand taxes them based on the type of income.

Progressive personal income tax rate for residents: 0%-35% (7 tax brackets)

Applicable to: Applicable to individuals who have resided in Thailand for 180 days or longer. The progressive tax rate structure is as follows:

Tier 1: 0% (applicable to the portion of annual taxable income not exceeding THB 150,000)

Second Tier: 5% (applicable to the portion of annual taxable income between THB 150,001 and THB 300,000)

Tier 3: 10% (applicable to the portion of annual taxable income between THB 300,001 and THB 500,000)

Tier 4: 15% (applicable to the portion of annual taxable income between THB 500,001 and THB 750,000)

Tier 5: 20% (applicable to the portion of annual taxable income between THB 750,001 and THB 1,000,000)

Tier 6: 25% (applicable to the portion of annual taxable income between THB 1,000,001 and THB 2,000,000)

Tier 7: 30% (applicable to the portion of annual taxable income between THB 2,000,001 and THB 5,000,000)

Tier 8: 35% (applicable to the portion of annual taxable income exceeding THB 5,000,000)

Non-resident individual income tax rate: 15% (applicable to certain types of income)

Application: Non-resident individuals are primarily subject to a flat tax rate of 15% on certain types of income (such as dividends, rent, interest) received within Thailand. The non-resident income tax system is designed to ensure that foreigners are properly taxed on their income earned in Thailand.

Overview of Personal Income Tax in the Philippines

The Philippines’ personal income tax (PIT) system adopts a progressive tax rate structure with 7 tax brackets, while a uniform tax rate applies to non-residents.

Progressive personal income tax rate for residents: 0%-35% (7 tax brackets)

Applicable to individuals who have domicile in the Philippines or reside in the Philippines for more than 180 days in a tax year. The progressive tax rate structure is as follows:

Tier 1: 0% (applicable to annual taxable income not exceeding Php 250,000)

Tier 2: 20% (applicable to annual taxable income between Php 250,001 and Php 400,000)

Tier 3: 25% (applicable to annual taxable income between Php 400,001 and Php 800,000)

Tier 4: 30% (applicable to annual taxable income between Php 800,001 and Php 2,000,000)

Tier 5: 32% (applicable to annual taxable income between Php 2,000,001 and Php 8,000,000)

Tier 6: 35% (applicable to the portion of annual taxable income exceeding Php 8,000,000)

Non-resident individual income tax rate: 25%

Application: Non-resident individuals are subject to a flat tax rate of 25% on their income derived from the Philippines. This policy is intended to treat tax obligations equally between non-residents and residents.

Overview of Personal Income Tax in Indonesia

Indonesia’s personal income tax (PIT) system adopts a progressive tax rate with 4 tax brackets, while a flat rate applies to non-resident individuals.

Progressive personal income tax rate for residents: 5%-30% (4 tax brackets)

Applicable to: Applicable to individuals who have resided in Indonesia for 183 days or more. The progressive tax rate structure is as follows:

Tier 1: 5% (applicable to the portion of annual taxable income not exceeding IDR 50,000,000)

Second Tier: 15% (applicable to the portion of annual taxable income between IDR 50,000,001 and IDR 250,000,000)

Tier 3: 25% (applicable to the portion of annual taxable income between IDR 250,000,001 and IDR 500,000,000)

Tier 4: 30% (applicable to the portion of annual taxable income exceeding IDR 500,000,000)

Non-resident individual income tax rate: 20%

Applicability: Non-resident individuals are subject to a uniform tax rate of 20% on their income earned in Indonesia. This policy ensures that income earned by non-residents in Indonesia is properly taxed.

Value Added Tax (VAT) / Goods and Services Tax (GST)

Vietnam Value Added Tax (VAT)

Tax rate: 0%, 5%, 10%

Applicable situations:

0%: Applicable to export goods and services, international transportation, and goods and services in certain special circumstances. Specifically, export products, processing export goods, international transportation services, and services provided outside Vietnam can enjoy a 0% VAT rate. In addition, eligible investment projects can also apply for a VAT refund.

5%: Mainly applies to basic necessities and services, such as medical equipment, agricultural products, food processing products, books and educational services. This tax rate is set to reduce the prices of these basic needs goods and alleviate the cost of living pressure for ordinary people.

10%: This is Vietnam’s standard VAT rate, which applies to most goods and services. This rate applies to a wide range of sectors, including industrial manufacturing products, construction services, communications, transport services, and most consumer goods.

China Value Added Tax (VAT)

Tax rate: 0%, 6%, 9%, 13%

Applicable situations:

0%: Applicable to export goods, cross-border services and certain duty-free goods and services. Qualified export goods can apply for VAT refund. In addition, cross-border businesses such as air transport services and international telecommunications services also enjoy a 0% tax rate.

6%: Applicable to modern service industries and financial services, such as financial products, cultural and creative services, consulting services, etc. This tax rate covers the core part of China’s service industry and aims to promote the development of the service industry.

9%: Applicable to transportation, construction, postal services, basic telecommunications services, and agricultural products. This tax rate is a transitional tax rate set during China’s tax reform process to ease the tax burden on the industry.

13%: This is China’s standard VAT rate, which applies to most goods and services, such as manufacturing products, commercial retail goods, real estate transactions, etc. This rate was lowered from 16% to 13% in 2019 to reduce the tax burden on enterprises and promote economic development.

Singapore Goods and Services Tax (GST)

Tax rate: 8% (starting from 2023)

Applicability: Singapore’s GST is a flat rate tax that applies to all goods and services. The Singapore government will increase the GST rate to 8% from 2023 and plans to further increase it to 9% in 2024. This adjustment is to cope with fiscal pressures caused by an aging population and rising medical expenses. Singapore’s GST exemptions apply to residential property sales and leasing, financial services, and services provided by certain non-profit organizations.

Japanese Consumption Tax (VAT)

Tax rate: 10% (standard rate), 8% (for certain goods such as food)

Applicable situations:

10%: This is Japan’s standard consumption tax rate, which applies to most goods and services, including luxury goods, electronics, clothing, general services, etc. This tax rate reflects the Japanese government’s need to subsidize social welfare.

8%: Applies to certain daily necessities such as food (excluding alcohol), over-the-counter medicines, books, newspaper subscriptions, etc. The Japanese government established this preferential tax rate to ease consumers’ spending on daily necessities, especially against the backdrop of slowing economic growth and weak consumption.

South Korea Value Added Tax (VAT)

Tax rate: 10%

Applicability: South Korea’s standard VAT rate is 10%, which applies to most goods and services, including manufacturing products, construction services, retail goods, catering services, etc. Some goods and services, such as agricultural products, fishery products, some medical services and educational services, enjoy tax exemption. The South Korean government’s tax rate design is intended to provide a stable source of fiscal revenue while encouraging domestic consumption and investment.

Thailand Value Added Tax (VAT)

Tax rate: 7%

Applicability: Thailand’s standard VAT rate is 7%, which applies to most goods and services, such as sales of goods, rentals, service industry income, etc. The rate was briefly raised to 10% after the Asian financial crisis in 1997, but has been lowered and stabilized at 7% since 2009 to support economic recovery and growth. Certain goods and services, such as medical services, educational services, agricultural products, publications, and other basic necessities specified by the government, are tax-free or exempt.

Philippines Value Added Tax (VAT)

Tax rate: 12%

Applicable situations: The standard VAT rate in the Philippines is 12%, which is widely applicable to sales of goods, service income, imported goods, etc. The VAT in the Philippines covers most industries and business activities, such as manufacturing, construction, retail, financial services, transportation, etc. For exported goods and certain specific services, the Philippines provides a 0% VAT rate to support the development of an export-oriented economy.

Indonesia Value Added Tax (VAT)

Tax rate: 11% (starting from 2022)

Applicability: Indonesia’s standard VAT rate will be increased to 11% from 2022, applicable to most goods and services, such as industrial products, construction, transportation, communications, etc. The purpose of the Indonesian government’s increase in VAT is to increase fiscal revenue and support national infrastructure construction and social welfare projects. Certain goods such as basic necessities, education and medical services may enjoy tax exemption or exemption. In addition, Indonesia also implements 0% VAT on exported goods to promote foreign trade growth.

Capital Gains Tax

Vietnam

Enterprises: 20%

Applicability: In Vietnam, capital gains tax is imposed on companies at a rate of 20% on gains from the sale or transfer of capital assets (such as stocks, real estate, company shares). This rate is the same as the corporate income tax (CIT) and covers all companies registered and operating in Vietnam. This means that capital gains are included in the annual corporate income tax return. The basis for calculating a company’s capital gains is the net proceeds from the sale price less the acquisition cost of the asset and reasonable expenses.

Things to note: Businesses need to record detailed transaction costs, maintenance fees and related expenses for each sale or transfer of capital assets to ensure that tax payable is calculated correctly.

Individuals: 0.1% (Securities Trading)

Applicability: When individuals trade in Vietnam’s securities market (including stocks and bonds), the capital gains tax rate is 0.1%, which is a flat tax rate on the total amount of the transaction, rather than a tax on the net gain. This tax rate applies to all transactions in Vietnam’s securities market, whether by domestic or foreign investors.

Note: This tax system simplifies the tax treatment of personal securities investments, but because the tax is levied on the total transaction amount rather than the net profit, investors need to pay special attention to the impact of tax costs on the overall investment return rate when engaging in high-frequency trading.

China

Enterprise: Merged into CIT

Scope of application: In China, capital gains of enterprises (such as transfer income of stocks, real estate and equity) are generally regarded as business income of enterprises and included in the calculation of corporate income tax (CIT). Enterprises need to pay tax on capital gains according to the applicable corporate income tax rate (usually 25%). The calculation of capital gains of enterprises includes consideration of the original acquisition cost of the asset, depreciation or amortization, and all expenses related to the transfer of the asset.

Note: When dealing with capital gains, companies must follow strict accounting standards and tax law requirements to ensure that all costs and expenses are correctly accounted for. This includes detailed records of the asset’s purchase date, cost allocation, and any related tax benefits or exemptions.

Individual: 20%

Applicability: For individual investors, the capital gains tax rate is usually 20%. This applies to situations such as property sales and equity transfers of non-listed companies. For listed stock transactions, China currently exempts capital gains tax, but dividends and bonuses are subject to 20% personal income tax.

Note: Individuals are required to make detailed tax declarations when capital gains occur, especially when large asset transfers or cross-border assets are involved, to ensure compliance with China’s tax compliance requirements.

Singapore

Enterprises: Generally not levied

Scope of application: Singapore generally does not tax corporate capital gains unless these gains are considered as business income of the company. For example, if a company engages in frequent asset trading activities, the tax authorities may consider these gains as business income and impose corporate income tax (CIT). This exemption policy makes Singapore an important financial center for global companies and investors.

Note: Companies should classify their capital gains income in detail to ensure they meet the tax exemption requirements. If a company’s capital gains are regarded as business income, they are subject to corporate income tax rate (17%).

Individuals: Generally not levied

Scope of application: Singapore generally does not tax capital gains for individual investors. This includes gains from the transfer of shares, real estate and other capital assets. This policy provides significant tax advantages for individual investors, especially in investment activities in the capital market and real estate market.

Note: Although capital gains are generally not taxed, individuals should ensure that their investment activities are not considered business activities, otherwise they may face the risk of reclassification and taxation by the tax authorities.

Japan

Enterprise: Merged into CIT

Applicability: In Japan, capital gains of companies are included in the corporate income tax (CIT) return. Companies are required to pay tax at a standard rate (usually 30.62%) based on their total taxable income. Capital gains are calculated by deducting the asset’s acquisition cost, related expenses and depreciation from the sale price. Companies are required to keep detailed records of related expenses and costs for each transaction of capital assets.

Note: When declaring capital gains, companies must ensure that all related transactions comply with tax laws and make reasonable use of available tax exemptions and deductions.

Individual: 20.315%

Applicability: The capital gains tax rate for individuals is 20.315%, including a special recovery tax of 0.315%. This applies to gains from the sale of stocks, real estate or other capital assets by individuals. For long-term holdings (such as stocks held for more than 5 years), lower tax rates or special tax incentives may apply.

Note: Individuals should accurately record all investment activities and declare capital gains as required when they occur. In addition, understanding and utilizing the tax exemption policies provided by Japan can effectively reduce the tax burden.

South Korea

Enterprise: Merged into CIT

Scope of application: Capital gains income of Korean companies is included in the corporate income tax (CIT) calculation and is taxed on the company’s total taxable income. Capital gains are calculated based on the net proceeds from the asset’s sale price less the acquisition cost, depreciation and related expenses. Companies are required to keep detailed tax records and calculations when selling capital assets to ensure accurate declarations.

Note: Companies must accurately classify and handle capital gains in accordance with Korean tax laws, especially for long-term held assets or complex transactions involving cross-border asset transfers.

Individuals: 22% (including local taxes)

Applicability: The capital gains tax rate for individuals in South Korea is 22%, including a 2% local tax. This rate applies to gains from the sale of capital assets such as stocks and real estate. For large capital gains, South Korea may apply a higher progressive tax rate, especially in the case of multiple transactions in a short period of time.

Note: Individuals are required to make detailed declarations when capital gains occur and ensure compliance with Korean tax laws. In particular, cross-border investments and asset transfers may require additional tax compliance and planning.

Thailand

Enterprise: Merged into CIT

Scope of application: Capital gains income of Thai companies is included in the corporate income tax (CIT) declaration and is subject to the standard corporate tax rate (20%). Capital gains are calculated by deducting the acquisition cost and related expenses from the selling price of the asset. Companies are required to keep detailed records of each capital asset transaction to ensure compliance with Thai tax laws.

Note: When dealing with capital gains, companies must ensure that all related transactions comply with tax laws and regulations and make full use of possible tax incentives.

Individual: 15%

Scope of application: Thailand imposes a fixed rate of 15% on personal capital gains tax, which mainly applies to income from the sale of capital assets such as stocks and real estate. For certain types of investments, there may be further tax incentives or exemptions.

Note: Individuals are required to make detailed tax returns when capital gains occur and understand the various deductions and exemptions in Thai tax laws to optimize their tax burden.

The Philippines

Enterprise: Merged into CIT

Applicability: In the Philippines, capital gains of companies are generally included in the corporate income tax (CIT) calculation and taxed at the standard rate (30%). Companies are required to keep detailed records and declare the gains from the sale or transfer of capital assets to ensure tax compliance.

Note: Enterprises should pay special attention to the tax implications of complex transactions such as cross-border transactions and asset restructuring, and may require professional tax planning and consulting.

Individuals: 0.5%-15%

Applicability: Capital gains tax rates for individuals in the Philippines vary depending on the type of asset and holding period. For example, long-term holdings (over 5 years) are taxed at a lower rate, short-term holdings are taxed at 15%, and real estate sales are generally taxed at a fixed rate of 6%. For listed stock transactions, capital gains tax rates range from 0.5% to 15%.

Note: Individuals need to plan carefully when transferring or selling assets to take full advantage of the Philippines’ tax incentives and exemptions. In addition, cross-border investments may require additional tax compliance and reporting.

Indonesia

Enterprise: Merged into CIT

Applicability: In Indonesia, capital gains income of companies is included in the corporate income tax (CIT) declaration and is taxed at the standard rate (22%). Companies are required to keep detailed records and calculations of the proceeds from the sale or transfer of capital assets to ensure the accuracy of tax declarations.

Note: When dealing with capital gains, companies must ensure that all related transactions comply with Indonesian tax laws and make full use of possible tax incentives and exemptions.

Individuals: 0.1% (listed stocks)

Scope of application: The capital gains tax rate for individuals in Indonesia when trading listed stocks is 0.1%. This is a single tax rate levied on the total amount of the transaction, rather than a tax on the net income. This tax rate applies to all transactions conducted on the Indonesian Stock Exchange and is a preferential policy established by the Indonesian government to promote the active capital market.

Note: Although this tax rate is low, investors should be aware of the cumulative effect of transaction costs when engaging in frequent transactions. In addition, Indonesia may apply different tax rates or tax policies to unlisted stocks or other capital assets.

Dividend Withholding Tax (Non-residents)

Dividend withholding tax is a tax that a company deducts in advance from the payment amount when distributing dividends to non-resident shareholders. Different countries have different withholding tax rates and scope of application when distributing dividends to non-resident shareholders, and in some cases, more favorable tax rates can be enjoyed under tax treaties. The following are the details of the dividend withholding tax policies of various countries:

Vietnam

Tax rate: 0%

Applicability: In Vietnam, dividends received by non-resident shareholders from Vietnamese companies are exempt from withholding tax. This means that dividend income received by foreign investors from Vietnamese companies is completely unaffected by Vietnamese taxation.

Policy background: Vietnam’s policy is to attract foreign direct investment (FDI) and make Vietnam one of the most attractive destinations for international capital in Southeast Asia. This tax exemption reduces the tax burden of foreign investors and enhances Vietnam’s competitiveness among global investors.

China

Tax rate: 10%

Scope of application: China generally applies a 10% withholding tax rate to dividends paid to non-resident shareholders. This applies to dividend income received by foreign shareholders from Chinese companies. The Chinese government allows the withholding tax rate to be reduced to 5% or lower under certain circumstances through tax treaties (DTAs) signed with various countries and regions. For example, Hong Kong resident companies can enjoy a preferential tax rate of 5% under certain conditions.

Policy Background: China ensures a reasonable tax burden on foreign investors through a moderate dividend withholding tax rate, while using tax treaties to further encourage cross-border investment. China takes into account its economic relations with major trading partners and international competitiveness when formulating these tax policies.

Singapore

Tax rate: 0%

Applicability: Singapore does not impose withholding tax on dividends paid to non-resident shareholders. This is due to Singapore’s Single-Tier Tax System, which means that the company has paid corporate income tax before profit distribution, and dividends paid thereafter are tax-free dividends. Whether the shareholder is a local resident or non-resident, there is no need to pay additional tax on the dividends received.

Policy background: This policy design of Singapore is to further attract global investors and multinational companies and make Singapore an important part of the international financial center. The exemption of dividend withholding tax not only simplifies tax processing, but also improves the return on investment in Singapore.

Japan

Tax rate: 20.42%

Applicability: Japan imposes a 20.42% withholding tax on dividends paid to non-resident shareholders, which consists of a 20% basic withholding tax rate and a 0.42% special income tax for reconstruction (to support reconstruction after the Great East Japan Earthquake). This tax rate applies to all non-resident shareholders who receive dividends from Japanese companies. However, non-residents may enjoy lower tax rates, usually between 10% and 15%, through countries and regions that have signed tax treaties with Japan.

Policy Background: Japan’s dividend withholding tax policy is designed to ensure that the government obtains stable tax revenue from international capital flows, while supporting domestic post-disaster reconstruction and infrastructure development through special taxes. Japan actively uses tax treaties to balance domestic tax needs and the need to attract international investment.

South Korea

Tax rate: 22%

Applicability: South Korea imposes a 22% withholding tax on dividends paid to non-resident shareholders, which consists of a 20% basic tax and a 2% local tax. This rate applies to dividend income received by non-residents from South Korean companies. Under tax treaties signed between South Korea and other countries and regions, the withholding tax rate can be reduced to 15% or even lower, depending on the specific agreement.

Policy background: South Korea ensures government revenue through a relatively high standard withholding tax rate and uses local taxes to support local finances. At the same time, through the flexible arrangements of tax treaties, South Korea has a certain competitiveness in attracting foreign investment.

Thailand

Tax rate: 10%

Applicability: Thailand imposes a 10% withholding tax on dividends paid to non-resident shareholders, which is considered the standard rate in Thailand’s tax policy. Applicable to all non-resident shareholders who receive dividends from Thai companies. In the case of a tax treaty with Thailand, non-resident shareholders can apply for a lower tax rate, usually down to 5% or tax-free.

Policy background: Thailand attracts foreign investment through this relatively moderate withholding tax rate while ensuring the government obtains stable tax revenue. Through the arrangement of bilateral tax treaties, Thailand further enhances its competitiveness in the international capital market.

The Philippines

Tax rate: 25% (can be reduced under tax treaties)

Scope of application: The Philippines has one of the stricter international tax policies, with a 25% withholding tax rate on dividends paid to non-resident shareholders. However, through tax treaties signed with other countries and regions, non-resident shareholders can enjoy a reduced tax rate, usually 15% or lower. For example, the tax treaty signed with the United States allows U.S. resident shareholders to enjoy a preferential tax rate of 15%.

Policy Background: The Philippines has established a relatively high standard withholding tax rate to ensure that the government collects sufficient tax revenue from cross-border capital flows, but at the same time provides certain flexibility through tax treaties to maintain its attractiveness as an investment destination.

Indonesia

Tax rate: 20% (can be reduced under tax treaties)

Applicability: Indonesia has a 20% withholding tax on dividends paid to non-resident shareholders. This applies to all non-resident shareholders who receive dividends from Indonesian companies. In the case of a tax treaty with Indonesia, non-resident shareholders can apply for a reduced tax rate, usually 10%-15%. For example, the tax treaty with the Netherlands allows Dutch resident shareholders to enjoy a preferential tax rate of 10%.

Policy Background: Indonesia’s withholding tax policy ensures national tax revenue through a higher standard tax rate, while through the arrangement of bilateral tax treaties, Indonesia can continue to attract foreign investors, especially in the increasingly competitive economic environment in Southeast Asia.

Special industry taxes

Banking

The banking industry is usually strictly regulated in various countries and may enjoy different preferential or special provisions in tax policies. The following is a detailed description of the corporate income tax (CIT) policies of various countries on the banking industry:

Vietnam: Standard CIT Rate

Scope of application: The banking industry in Vietnam is subject to the standard corporate income tax rate (CIT), which is currently 20%. Although the banking industry, as a core sector of financial services, does not have any special preferential tax policies or additional taxes, it benefits from Vietnam’s stable tax environment.

Policy Background: The Vietnamese government encourages the development of the banking sector to support the modernization of the national economy, especially in the field of financial technology.

China: Standard CIT Rate

Scope of application: China’s banking industry is subject to the standard corporate income tax rate of 25%. China’s banking industry is one of the most strictly regulated industries in the country, and the tax policy is relatively uniform, but some special circumstances, such as banks located in certain special economic zones or engaged in certain businesses, may enjoy tax incentives.

Policy Background: Through the standard tax rate, the Chinese government ensures the stability of the banking industry’s contribution to national finances while encouraging its continued expansion in the national financial system.

Singapore: 17% (Financial services industry enjoys preferential treatment)

Applicability: The banking industry in Singapore is generally subject to a standard corporate income tax rate of 17%. However, to encourage the development of the financial services industry, the government provides some specific tax incentives, such as a lower tax rate on part of the financial services income paid by financial institutions.

Policy background: As a global financial center, the Singapore government further strengthens its position as a financial hub through tax incentives to attract investment and operations from the global banking industry.

Japan: Standard CIT rate, but with special regulations

Scope of application: The banking industry in Japan is subject to the standard corporate income tax rate (30.62%), but there are special provisions for certain businesses and regions. For example, local banks may enjoy local tax exemptions. In addition, the introduction of the Financial Reform Bill may also affect the tax burden of the banking industry.

Policy Background: While maintaining tax revenue, the Japanese government also supports the development of local banks through special regulations to strengthen the regional economy.

South Korea: Standard CIT rate, but with additional tax

Applicability: The banking industry in South Korea is subject to the standard corporate income tax rate (22%), in addition to additional taxes such as local taxes (usually a 10% surcharge on the corporate income tax). These taxes are used to support the development of local economies and the country’s social security system.

Policy Background: The South Korean government uses a surcharge policy to ensure the banking industry’s contribution to the national and local economies while maintaining the stability of the financial system.

Thailand: Standard CIT rate, with a 3% preferential rate for certain income

Scope of application: The banking industry in Thailand is subject to the standard corporate income tax rate (20%), but certain banking business income, such as interest income from loans to small and medium-sized enterprises, may enjoy a preferential tax rate of 3%. This tax incentive is intended to encourage banks to support the financing needs of small and micro enterprises.

Policy background: Thailand encourages banks to support key areas of the national economy, especially promoting the development of small and medium-sized enterprises, through tax incentives.

Philippines: Standard CIT Rate

Scope of application: The banking industry in the Philippines is subject to the standard corporate income tax rate (25%). As a pillar industry of the Philippine economy, the banking industry benefits from a stable tax policy and may enjoy tax incentives in certain special economic zones or businesses.

Policy Background: The Philippine government ensures the stability of the financial system and the sustainability of tax revenue through standard tax rates.

Indonesia: Standard CIT Rate

Applicability: Indonesia’s banking industry is subject to the standard corporate income tax rate (22%). Despite the importance of the banking industry to the national economy, the Indonesian government currently does not provide special tax incentives for the banking industry.

Policy Background: The Indonesian government maintains consistency in its tax policy for the banking industry, ensuring tax revenue while supporting the sustainable development of the financial industry.

Insurance

The insurance industry is usually a key industry that is strictly regulated in various countries, and its tax policies may have some similar regulations and preferences as those of the banking industry. The following is a detailed description of the corporate income tax (CIT) policies of various countries on the insurance industry:

Vietnam: Standard CIT Rate

Scope of application: The insurance industry in Vietnam is subject to the standard corporate income tax rate (20%), just like other industries. The development of insurance companies in Vietnam is supported by national policies, but there are no special tax policies.

Policy background: The Vietnamese government hopes to ensure fair competition in the insurance industry through a unified tax rate, while supporting its expansion and steady development in the market.

China: Standard CIT Rate

Applicability: China’s insurance industry is subject to the standard corporate income tax rate of 25%. Although the insurance industry is an important part of China’s financial system and the government maintains a unified standard for taxation, in some cases, insurance companies may enjoy tax benefits similar to those of the banking industry.

Policy Background: The insurance industry plays an increasingly important role in China’s economy, and tax policies ensure its contribution to national finances while supporting its risk management and social security functions.

Singapore: 17% (discounts available)

Applicability: The insurance industry in Singapore is generally subject to a standard corporate income tax rate of 17%. However, to encourage the development of the insurance industry, the government provides some specific tax incentives, such as reinsurance business and offshore insurance business may enjoy preferential tax rates.

Policy background: Singapore has attracted global insurance companies to set up operations locally through preferential tax policies, further consolidating its position as an Asian financial center.

Japan: Standard CIT rate

Applicability: The insurance industry in Japan is subject to the standard corporate income tax rate (30.62%), but certain types of insurance companies, especially those involved in insurance business involving public interests, may enjoy preferential local taxation.

Policy Background: The Japanese government ensures the continued development of the insurance industry in supporting social security and risk management while ensuring the fairness of national taxation through the uniform application of standard tax rates.

South Korea: Standard CIT Rate

Scope of application: The insurance industry in South Korea is subject to the standard corporate income tax rate (22%), with no special tax incentives. Insurance companies need to comply with strict tax and regulatory requirements to ensure financial soundness and the normal operation of social security functions.

Policy Background: South Korea’s tax policy ensures fair competition for all financial institutions through a unified tax rate and supports the development of regional economies through mechanisms such as local taxes.

Thailand: Standard CIT Rate

Scope of application: The insurance industry in Thailand is subject to the standard corporate income tax rate (20%) and there are no special tax incentives, but certain types of insurance products or services may be exempted or reduced.

Policy Background: The Thai government ensures the insurance industry’s contribution to the socio-economic development, while encouraging the expansion and innovation of the industry through tax policies.

Philippines: Standard CIT Rate

Scope of application: The insurance industry in the Philippines is subject to the standard corporate income tax rate (25%), and the tax policy remains uniform. Insurance companies may enjoy tax exemptions in certain circumstances, especially on insurance products that promote social welfare and public interest.

Policy Background: The Philippine government ensures the stable development of the insurance industry through a standard tax rate while supporting its role in the social security system.

Indonesia: Standard CIT Rate

Applicability: The insurance industry in Indonesia is subject to the standard corporate income tax rate (22%) and there are no special tax incentives, but the government encourages the development of the insurance industry to support economic growth and risk management.

Policy Background: The Indonesian government supports the development of the insurance industry through a standard tax rate and ensures the industry’s contribution to national tax revenue.

Oil and Gas Industry

The oil and gas industry is an important part of the economies of various countries and is usually subject to special taxation regimes. Below is a detailed description of the corporate income tax (CIT) policies of various countries on the oil and gas industry:

Vietnam: 32%-50%

Scope of application: Vietnam imposes special tax rates on the oil and gas industry, ranging from 32% to 50%, depending on the specific project and contract terms. The Vietnamese government imposes heavy taxes on oil and gas exploration, extraction and production activities to reflect the scarcity and high profitability of the resource.

Policy Background: By implementing higher tax rates on the oil and gas industry, the Vietnamese government ensures that the state can generate sufficient fiscal revenue from this highly profitable industry while managing the sustainability of the resource.

China: 25% + resource tax

Scope of application: China applies a standard corporate income tax rate (25%) to the oil and gas industry, but also imposes a resource tax. The resource tax is calculated based on the type and amount of resources extracted, further increasing the tax burden on oil and gas companies.

Policy Background: The Chinese government uses a combination of resource taxes and standard corporate income taxes to ensure adequate tax revenue from resource-intensive industries while promoting the rational use of resources.

Singapore: 17%

Applicability: Singapore applies a standard corporate income tax rate (17%) to the oil and gas industry. Although there is no special resource tax, Singapore’s low tax rate and favorable investment environment make it an ideal investment location for oil and gas companies.

Policy Background: Singapore attracts global oil and gas companies to set up regional headquarters and operating bases by maintaining low tax rates and providing good infrastructure.

Japan: Standard CIT rate + oil and gas tax

Application: Japan applies a standard corporate income tax rate (30.62%) to the oil and gas industry, in addition to an oil and gas tax, which is adjusted based on production volume and oil price fluctuations to ensure that the country receives sufficient fiscal revenue from this strategic industry.

Policy Background: Japan uses oil and gas taxes to balance fiscal needs and resource management while supporting the stable implementation of domestic energy policies.

South Korea: Standard CIT rate + resource tax

Application: South Korea applies a standard corporate income tax rate (22%) to the oil and gas industry, and imposes an additional resource tax. The resource tax is based on the type and amount of resources extracted, ensuring the state’s interest in resource extraction.

Policy Background: South Korea uses resource taxes to ensure adequate fiscal revenue from the oil and gas industry while managing the sustainable extraction of resources.

Thailand: 50% (oil revenue)

Scope of application: Thailand imposes a high tax rate of 50% on the oil and gas industry, especially oil revenue. This tax rate applies to oil extraction and sales activities, reflecting the high profitability of the industry and the scarcity of resources.

Policy background: The Thai government ensures that the country obtains sufficient fiscal revenue from oil resources through high tax rates, while encouraging investment in new energy.

Philippines: Standard CIT rate + government share

Application: The Philippines applies a standard corporate income tax rate (25%) to the oil and gas industry, and requires companies to share revenues with the government. The government share is usually calculated based on the provisions of the Production Sharing Contract (PSC).

Policy Background: Through a combination of government sharing and standard tax rates, the Philippines ensures that the country can obtain reasonable returns from oil and gas extraction to support the country’s economic development and social construction.

Indonesia: Special Taxation System (PSC Contract)

Scope of application: Indonesia implements a special tax system for the oil and gas industry, which is usually based on production sharing contracts (PSCs). Under PSC contracts, companies are required to share production revenue with the government, and the tax rate and share ratio are determined according to the specific terms of the contract.

Policy Background: The Indonesian government manages the development of oil and gas resources through PSC contracts to ensure that the state can maximize benefits from the industry while attracting foreign investment.

Gambling Industry

The gambling industry is regulated to varying degrees around the world, with some countries banning it outright and others managing it through special tax systems. Below is a detailed description of the tax policies of various countries on the gambling industry:

Vietnam: Special tax rates (depending on the specific business)

Scope: Vietnam imposes special tax rates on the gaming industry, with specific rates depending on the type of business, such as casinos and horse racing. The government imposes strict regulations on the industry to ensure that the impact of gaming activities on society is controlled while also generating fiscal revenue.

Policy Background: Vietnam has adopted special tax rates and strict regulatory policies in an attempt to control social problems that may arise from the gaming industry while promoting tourism.

China: Prohibited (except Macau)

Scope of application: Gambling is completely prohibited in mainland China, with the only exception being the Macao Special Administrative Region, where the gaming industry is legal and is an important pillar of Macao’s economy. Macao’s gaming industry is subject to a special tax system, from which the government receives a large amount of fiscal revenue.

Policy Background: The Chinese government protects social stability by banning gambling activities, but in Macau the gaming industry is allowed to develop to support the local economy and employment.

Singapore: Special Tax Regime

Scope of application: Singapore has a strict special tax system for the gaming industry, including casino tax, gaming tax, etc. Casino revenue is subject to a 15% tax, while mass gaming activities such as horse racing, lottery, etc. are subject to different tax rates. The Singapore government strictly regulates gaming activities to control social problems such as gambling addiction.

Policy Background: Singapore ensures fiscal revenue from the gaming industry through a special tax system, while strictly managing the potential negative impact of gaming activities on society.

Japan: Newly introduced casino tax

Applicability: Japan introduced a casino tax in recent years as part of a revision of the country’s gambling laws. Casino operators are required to pay a certain percentage of the tax, the rate of which varies depending on the specific turnover and type of business. Through this tax system, the government attempts to manage the social impact of gambling activities while promoting tourism.

Policy Background: While promoting tourism and regional economic development, the Japanese government controls the social risks of gambling activities through casino taxes.

South Korea: Special Tax System

Applicability: South Korea has a special tax system for the gaming industry, including high taxes on activities such as casinos, horse racing and lotteries. Foreigner-only casinos are subject to taxes of up to 20%, while other forms of gambling activities are subject to different tax rates. The government maintains strict controls on gaming activities to prevent gambling addiction problems.

Policy Background: South Korea uses a special tax system and strict regulatory policies to ensure fiscal revenue from the gaming industry while protecting society from gambling problems.

Thailand: Banned (except for state-run lotteries)

Applicability: Thailand prohibits most forms of gambling, with the only exception being the state-run lottery. The government strictly controls lotteries to ensure that gambling does not have a negative impact on society, while also generating fiscal revenue from lottery sales.

Policy Background: Thailand protects social stability by banning most gambling activities, but allows the operation of state-run lotteries to meet some social needs and increase fiscal revenue.

Philippines: Special Taxation System

Scope of application: The Philippines has a special tax system for the gaming industry, including casinos, online gaming, horse racing, etc. Casinos are subject to high gaming taxes, with tax rates depending on income levels and business types. The government ensures that the gaming industry contributes to national finances through regulatory and tax policies.

Policy Background: The Philippines balances the economic contribution of the gaming industry and social management issues through special taxation and active regulatory policies, especially in the national strategy of developing tourism.

Indonesia: Prohibited (except in some forms)

Scope: Gambling is completely prohibited in Indonesia, with the only exceptions being certain traditional forms of gambling and gambling in certain areas. The government imposes strict control and supervision on these activities to prevent the negative impact of gambling on society.

Policy Background: Indonesia maintains social order by banning most gambling activities, but provides limited licenses for a few traditional or local gambling activities to respect local cultural customs.

Tax incentives

In order to promote the development of specific industries, regional revitalization and support the growth of small and medium-sized enterprises, various countries have introduced a series of tax incentives, which not only help companies reduce their tax burdens but also provide investors with a better investment environment.

High-tech enterprise

High-tech enterprises are usually the focus of economic development support in various countries. To this end, many countries provide high-tech enterprises with preferential tax rates and other tax incentives.

Vietnam: 10% preferential tax rate, up to 15 years

Scope of application: High-tech enterprises in Vietnam can enjoy a preferential corporate income tax rate of 10% for a maximum period of 15 years. This preferential tax rate applies to high-tech enterprises that meet the Vietnamese government’s standards, especially in the fields of information technology, biotechnology, and environmental technology.

Policy background: The Vietnamese government hopes to attract high-tech enterprises to settle in through tax incentives, promote domestic technological innovation and industrial upgrading, and enhance national competitiveness.

China: 15% preferential tax rate

Scope of application: In China, certified high-tech enterprises can enjoy a preferential corporate income tax rate of 15%, which is 10% lower than the standard tax rate. Eligible enterprises must have independent intellectual property rights and continuous R&D investment in specific fields (such as biomedicine, aerospace, new materials, etc.).

Policy Background: Through this preferential policy, the Chinese government intends to support the development of technology-intensive enterprises, promote scientific and technological innovation, and promote industrial structure adjustment.

Singapore: 5%-10% preferential tax rate (Pioneer Certificate)

Scope of application: Singapore’s high-tech enterprises that obtain Pioneer Certificate can enjoy a preferential corporate income tax rate of 5%-10%, which can last up to 15 years. Pioneer Certificate is mainly issued to enterprises that establish new technologies or industries with significant economic significance in Singapore.

Policy background: Through this policy, Singapore attracts global high-tech companies to set up regional or global headquarters locally, and promotes Singapore to become an innovation center in Asia.

Japan: R&D Tax Credit

Scope of application: Japan’s high-tech enterprises can enjoy tax credits for R&D expenses, the specific proportion of which is determined by the proportion of R&D expenses to total revenue. The maximum amount of tax payable can be deducted is 20%, which greatly reduces the tax burden of enterprises in terms of R&D investment.

Policy Background: The Japanese government encourages companies to increase investment in research and development to enhance the global competitiveness of domestic companies and promote sustained innovation and growth of the economy.

South Korea: R&D tax credit and accelerated depreciation

Scope of application: South Korea provides tax credits for R&D expenses for high-tech enterprises and allows accelerated depreciation of high-tech equipment to reduce corporate tax burden. The proportion of R&D tax credits is determined according to the industry and the scale of R&D expenses.

Policy background: South Korea promotes the development of high-tech industries through tax incentives, especially in key areas such as semiconductors, automobiles, and information technology, to ensure South Korea’s technological leadership in the global market.

Thailand: 3-8 years tax exemption period

Scope of application: High-tech enterprises in Thailand can enjoy a tax exemption period of 3 to 8 years, depending on the investment scale, technological level and contribution to the economy of the project. This tax exemption period applies to newly established high-tech enterprises, as well as enterprises that have made major technological upgrades to existing businesses.

Policy background: The Thai government has adopted tax exemption policies to attract investment from high-tech enterprises, especially in key development areas such as the Eastern Economic Corridor (EEC), to promote economic modernization and industrial transformation.

Philippines: 4-6 years income tax holiday

Scope of application: Philippine high-tech enterprises can enjoy a 4 to 6-year income tax holiday, which means they are exempt from paying corporate income tax during this period. This policy mainly applies to export-oriented high-tech enterprises and technology enterprises established in special economic zones.

Policy background: The Philippine government uses this policy to attract foreign investment, promote the development of domestic technology industries, and enhance the country’s competitiveness in Southeast Asia.

Indonesia: 200% deduction for R&D expenses

Scope of application: In Indonesia, high-tech enterprises can enjoy a 200% pre-tax deduction for their R&D expenditures. This means that when calculating taxable income, enterprises can deduct twice the amount of their R&D expenditures, greatly reducing their tax burden.

Policy background: The Indonesian government hopes to encourage enterprises to increase R&D investment, improve the technological level of domestic enterprises, and promote industrial transformation and upgrading through this preferential policy.

Regional offers

Countries offer tax incentives in specific areas to attract corporate investment and promote regional economic development. These incentives are usually applied to special economic zones, underdeveloped areas or areas that the government focuses on developing.

Vietnam: Special economic zones and underdeveloped areas enjoy tax incentives

Scope of application: Enterprises established in Vietnam’s special economic zones and underdeveloped areas can enjoy tax incentives, including lower corporate income tax rates, tax exemption periods and tax reductions. Specific benefits depend on the region and industry category of the enterprise.

Policy background: The Vietnamese government has promoted balanced economic development through regional tax incentives, attracted investors to underdeveloped areas, and improved the economic level and employment rate of these areas.

China: Preferential policies such as the Western Development Program and free trade zones

Scope of application: In China, enterprises in the Western Development Region and the Free Trade Zone can enjoy corporate income tax reduction or preferential tax rates. The preferential tax rate for the Western Development Region is 15%, and enterprises in the Free Trade Zone can enjoy preferential policies on tariffs, value-added tax, etc.

Policy Background: The Chinese government has adopted regional preferential policies to promote economic development in western and coastal areas, narrow regional development gaps, and promote international trade and investment.

Singapore: A unified national policy

Scope of application: Singapore’s tax policies apply uniformly across the country, with no special regional preferences. This makes Singapore highly transparent and predictable in attracting global investment.

Policy background: Due to Singapore’s small land area, the government has adopted a unified national tax policy to ensure the fairness and effectiveness of policy implementation, thereby attracting multinational companies to set up headquarters and regional centers in Singapore.

Japan: Specific Regional Revitalization Policy

Scope of application: The Japanese government provides tax exemptions and other financial support to specific areas, such as disaster-stricken areas and economically backward areas. When companies set up or expand their business in these areas, they can enjoy corporate income tax exemptions, fixed asset tax exemptions and other benefits.

Policy background: Japan has adopted regional revitalization policies to encourage enterprises to participate in the reconstruction of disaster-stricken areas and the development of economically backward areas, thereby improving the country’s level of balanced economic development.

South Korea: Preferential policies for free economic zones

Scope of application: South Korea provides various tax incentives to enterprises in its Free Economic Zones (FEZs), including corporate income tax exemption, tariff exemption and VAT incentives. These incentives are aimed at attracting foreign investment and promoting international trade and high-tech industry development in the free zones.

Policy background: The South Korean government has promoted the globalization of the country’s economy through the free economic zone policy, enhanced its attractiveness to international investors, and promoted the development of high value-added industries.

Thailand: Eastern Economic Corridor (EEC) preferential policies

Scope of application: Thailand’s Eastern Economic Corridor (EEC) project provides a variety of tax incentives for companies settled in the project, including corporate income tax exemptions, tax holidays and preferential tax rates for special industries. These policies are mainly aimed at high-tech industries, infrastructure construction and logistics.

Policy background: Through the EEC project, Thailand attempts to build a high-tech industrial center in Southeast Asia, attract international investors, and promote national economic modernization.

Philippines: Special Economic Zone Preferential Policies

Scope of application: Enterprises in the Philippines’ special economic zones can enjoy income tax holidays, import duty exemptions and other tax incentives. These incentives apply to export-oriented enterprises, high-tech enterprises and infrastructure projects.

Policy background: The Philippines uses preferential policies of special economic zones to attract foreign investment, promote regional economic development, and enhance the country’s overall economic competitiveness.

Indonesia: Preferential policies for special economic zones

Scope of application: Enterprises in Indonesia’s special economic zones (SEZs) can enjoy a variety of tax incentives, including corporate income tax exemptions, value-added tax exemptions and tariff reductions. These incentives are designed to attract foreign direct investment and technology transfer.

Policy background: Indonesia promotes the development of regional economy and promotes the diversification and industrialization of the national economy through the special economic zone policy.

SME Support

Governments around the world support the development of small and medium-sized enterprises through tax incentives, helping them to cope with market challenges and promoting economic diversification and innovation.

Vietnam: 17% preferential tax rate

Scope of application: Vietnam offers a preferential corporate income tax rate of 17% to eligible small and medium-sized enterprises, which is lower than the standard tax rate of 20%. This preferential policy is mainly aimed at small and medium-sized enterprises with low annual taxable income to help them reduce operating costs.

Policy background: The Vietnamese government supports the development of small and medium-sized enterprises by lowering tax rates, encouraging innovation and entrepreneurship, and promoting economic diversification and inclusive growth.

China: 20% or 10% preferential tax rate

Scope of application: China provides a preferential corporate income tax rate of 20% to qualified small and medium-sized enterprises. For small and medium-sized enterprises with taxable income below a certain amount, a lower tax rate of 10% applies. This policy helps small and medium-sized enterprises maintain vitality in market competition.

Policy Background: Through tax reduction and exemption, the Chinese government supports the development of small and medium-sized enterprises, especially start-ups, and encourages them to contribute to technological innovation and market expansion.

Singapore: Tax relief scheme for start-up companies

Scope of application: Singapore’s Startup Tax Exemption Scheme (SUTE) allows newly established SMEs to enjoy partial corporate income tax exemption in the first three years, up to 100% exemption on the first S$100,000 of profit before tax.

Policy background: Through this program, the Singapore government encourages entrepreneurship and the development of small and medium-sized enterprises, and promotes innovation and diversification of the national economy.

Japan: Special tax relief

Scope of application: Japan provides special tax breaks for small and medium-sized enterprises, including tax credits for equipment investment, R&D expenditures, and employee training. These preferential policies help small and medium-sized enterprises reduce costs and improve their competitiveness.

Policy Background: The Japanese government supports the continued development of small and medium-sized enterprises through special tax breaks, especially in terms of technological innovation and human resource development, to promote overall economic growth.

South Korea: Various tax incentives and subsidies

Scope of application: South Korea provides a variety of tax incentives and subsidies for small and medium-sized enterprises, including corporate income tax exemptions, tax credits for R&D expenses, and special support for export-oriented enterprises. These policies help small and medium-sized enterprises cope with market challenges and expand into international markets.

Policy background: The South Korean government promotes the growth of small and medium-sized enterprises and enhances the competitiveness and resilience of the country’s overall economy through various tax incentives and subsidy measures.

Thailand: Low progressive tax rates

Scope of application: Thailand implements a lower progressive tax rate for small and medium-sized enterprises, ranging from 15% to 20% depending on the company’s annual taxable income. This policy aims to reduce the tax burden of small and medium-sized enterprises and encourage their rapid development in the start-up stage.

Policy background: The Thai government supports the expansion and innovation of small and medium-sized enterprises through low progressive tax rates, thereby enhancing their competitiveness in domestic and international markets.

Philippines: Simplified tax system

Scope of application: The Philippines provides a simplified tax system for small and medium-sized enterprises, including simplified income tax filing procedures and a lower corporate income tax rate. This policy helps reduce the compliance costs of small and medium-sized enterprises and promotes their steady development in the Philippine market.

Policy Background: The Philippine government has simplified tax procedures and lowered tax rates to reduce the burden on small and medium-sized enterprises, encourage entrepreneurship and innovation, and promote inclusive growth of the national economy.

Indonesia: 0.5% final income tax (annual income not exceeding IDR 4.8 billion)

Scope of application: Indonesia implements a final income tax of 0.5% for small and medium-sized enterprises with annual revenue not exceeding 4.8 billion rupiah. This means that these enterprises only need to pay 0.5% of their operating income as a final tax burden if they meet the conditions, greatly simplifying the tax compliance process.

Policy background: Through this policy, the Indonesian government reduces the tax burden on small and medium-sized enterprises, encourages corporate investment and innovation, and promotes the diversified development of the economy.

Other taxes

Resource Tax

Vietnam:

Scope of application: Resource taxes in Vietnam apply to the development of natural resources such as oil, gas, minerals, forest products and water resources. Tax rates vary according to resource type, development conditions and geographical location. For example, tax rates for oil and gas are generally higher to reflect their high economic value, while for timber and other forest products, tax rates are relatively lower.

Policy background: The Vietnamese government uses resource tax policy to ensure fiscal revenue from the development of natural resources while promoting sustainable use of resources. Especially for high value-added resources, Vietnam’s resource tax rate is relatively high to promote rational development and environmental protection.

China:

Scope of application: China’s resource tax rates vary widely depending on resource type and region, and are usually 3%-10%. Resource taxes are mainly applicable to the exploitation of resources such as oil, natural gas, coal, metal minerals and non-metallic minerals. The base for resource tax can be the sales revenue or the amount of mining, depending on the type of resource and the mining conditions.

Policy background: China’s resource tax policy aims to promote the rational development and utilization of resources, while providing stable fiscal revenue for local governments. Through differentiated tax rates, the Chinese government also hopes to regulate the supply and demand of resources and promote energy conservation, emission reduction and environmental protection.

Singapore:

Scope of application: Singapore does not impose resource taxes due to its lack of resources and its reliance on imported resources. Singapore’s economic policies focus more on high value-added manufacturing, services and finance rather than the development of natural resources.

Policy background: Singapore’s policy of not levying resource taxes reflects its resource endowment and the government’s strategic choice of economic structure. Singapore focuses on developing high-tech and high value-added industries to become a global financial center and innovation hub.

Japan:

Scope of application: Japan’s resource tax mainly applies to the exploitation of specific resources, such as oil, natural gas and some rare metal minerals. Resource tax rates are determined based on the type of resource and the conditions of exploitation, usually to ensure the supply of national strategic resources and manage environmental risks.

Policy Background: Due to the relative scarcity of natural resources, Japan pays more attention to environmental protection and sustainable use of resources in its resource tax policy. The government regulates mining activities through resource taxes to ensure the rational management and use of scarce resources.

South Korea:

Scope of application: South Korea’s resource tax applies to the extraction of specific resources, including oil, natural gas, coal and mineral resources. Resource tax is levied based on the sales volume or extraction volume of resources, and the specific tax rate varies depending on the type of resource and the extraction area.

Policy Background: South Korea has adopted a resource tax policy to manage limited natural resources and reduce the impact on the environment. The government promotes efficient use of resources and environmentally friendly development through differentiated tax rates.

Thailand:

Scope of application: Thailand’s resource tax mainly applies to the mining of mineral resources, such as metal minerals, gemstones, limestone and other building materials. The resource tax rate is determined based on the market value of the resources and the mining conditions, and is generally a certain percentage of the mineral sales revenue.

Policy background: The Thai government uses resource tax policy to ensure fiscal revenue from resource mining, while promoting sustainable use of mineral resources and environmental protection. Especially in areas rich in mineral resources, resource tax provides important support for local government finances.

the Philippines:

Scope of application: The resource tax in the Philippines is mainly aimed at the exploitation of mineral resources, especially metal minerals, non-metallic minerals and energy resources. The resource tax rate is determined according to the resource type, market price and scale of exploitation. In addition to resource tax, the Philippine government also collects royalties for mineral development.

Policy Background: The Philippines uses a combination of resource taxes and royalties to ensure fiscal revenue from the development of mineral resources while promoting sustainable resource management and environmental protection.

Indonesia:

Scope of application: Indonesia’s resource tax applies to the extraction of mineral resources, including coal, oil, natural gas, metal minerals, etc. The resource tax rate is calculated based on the type of resource, the amount of extraction and sales revenue. Indonesia also obtains government revenue sharing in the oil and gas industry through production sharing contracts (PSCs).

Policy background: As a resource-rich country, Indonesia uses resource tax policies to ensure that the country obtains sufficient fiscal revenue from resource development, while promoting the rational development of resources and environmental protection. The government also manages the development of oil and gas resources through PSC contracts to ensure national interests.

Environmental protection tax

Vietnam

Scope of application: Vietnam’s environmental protection tax mainly applies to specific pollutants and products. These include gasoline, diesel, coal, plastic bags, and other chemicals that are harmful to the environment. Tax rates are set based on the type of pollutant and the potential harm to the environment. For example, gasoline and diesel have higher tax rates to encourage the reduction of fossil fuel use and reduce air pollution.

Policy Background: Vietnam has adopted an environmental protection tax to address increasingly serious environmental problems, especially in air pollution and solid waste management. The proceeds from the tax are used to finance environmental protection projects and the development of clean technologies.

China

Scope of application: China’s environmental protection tax applies to air pollutants, water pollutants, solid waste and noise pollution. Enterprises pay environmental protection taxes based on the type and amount of pollutants they emit, as well as regional differences. Air pollutants such as sulfur dioxide and nitrogen oxides, water pollutants such as chemical oxygen demand (COD), as well as hazardous waste and industrial noise emissions are all subject to taxation.

Policy background: China’s Environmental Protection Tax Law was officially implemented in 2018, replacing the previous pollution discharge fee system. Through tax policies, the Chinese government hopes to encourage companies to reduce pollutant emissions, improve environmental quality, and promote the development of green technology and renewable energy.

Singapore

Scope of application: Singapore mainly achieves its environmental protection goals through carbon tax and environmental protection measures. Since 2019, Singapore has imposed a carbon tax of S$5 per ton of carbon dioxide emissions, making it the first country in Southeast Asia to implement a carbon tax. In addition, the Singapore government has also implemented a variety of environmental protection measures, such as electronic waste recycling and plastic reduction policies, but there is no environmental protection tax for specific pollutants and products.

Policy background: Singapore’s carbon tax policy is one of its core policies to combat climate change and promote sustainable development. Through carbon tax, Singapore hopes to encourage companies to reduce carbon emissions and invest in green technology and clean energy.

Japan

Scope of application: Japan’s environmental protection tax applies to specific pollutants and products, especially greenhouse gas emissions, petroleum and coal products. Japan also imposes taxes on the production and use of fluorinated compounds and other harmful chemicals to reduce the harm of these substances to the environment. The greenhouse gas emission tax (Global Warming Tax) is an important part of Japan’s environmental tax system, which is levied on the use of fossil fuels.

Policy Background: The Japanese government actively promotes emission reduction and the development of environmental protection technologies through environmental protection taxes and other environmental protection measures, reduces carbon footprint, and fulfills its commitments to international climate agreements.

South Korea

Scope of application: South Korea’s environmental protection tax applies to specific pollutants and products, mainly including greenhouse gases, fossil fuels, chemicals and specific industrial wastes. South Korea also imposes higher environmental protection taxes on companies that use highly polluting fuels such as coal and diesel. In addition, South Korea has also implemented a carbon emissions trading system (ETS) to control and reduce greenhouse gas emissions.

Policy background: South Korea’s environmental protection tax policy aims to reduce industrial emissions, control air pollution, and promote energy structure transformation. Through these measures, South Korea hopes to achieve higher environmental standards internationally and promote domestic companies to transform to a green economy.

Thailand

Scope of application: Thailand’s environmental protection tax applies to specific pollutants and products, mainly focusing on fossil fuels, chemicals, plastic products and waste disposal. The Thai government also imposes corresponding environmental taxes through strict supervision of industrial emissions and water pollution to mitigate the impact on the environment. For industrial facilities with large-scale emissions, Thailand has also implemented an environmental impact assessment (EIA) and emission charging mechanism.

Policy Background: Thailand is committed to reducing pollutant emissions, protecting natural resources, and promoting sustainable development policies through environmental protection taxes and related policies. Especially in the process of urbanization, the Thai government hopes to control pollution and improve environmental quality through these measures.

the Philippines

Scope of application: The Philippines’ environmental protection tax applies to specific pollutants and products, such as coal, petroleum products, plastic bags and industrial waste. The Philippine government also implements tax controls on the emission of air and water pollutants through the Clean Air Act and the Clean Water Act. In addition, the Philippines has also implemented strict environmental taxes and rates for mining and energy development activities.

Policy background: The Philippine government has adopted environmental protection taxes and related regulations to address environmental pollution, protect natural resources, and raise public awareness of environmental protection. These measures are also important tools for the Philippines to address climate change and promote the development of renewable energy.

Indonesia

Scope of application: Indonesia’s environmental protection tax applies to specific pollutants and products, mainly including the mining of mineral resources, the use of fossil fuels, and the discharge of industrial waste. Indonesia also implements stricter environmental supervision on the oil, gas and mining sectors through resource tax and other environmental tax policies. In addition to traditional environmental taxes, the Indonesian government is also promoting carbon tax legislation to control greenhouse gas emissions.

Policy background: As a resource-rich country, Indonesia ensures the sustainable development of resources and controls environmental pollution through environmental protection tax policies. The Indonesian government also encourages companies to invest in clean technology and renewable energy projects through tax and policy tools.

Real estate tax

Real estate tax refers to the tax levied by the state or local government on the ownership, use, development or transfer of land and buildings. The real estate tax policies of different countries have their own characteristics, usually including property tax, transfer tax, stamp duty and other taxes. The following are the details of the real estate tax policies of various countries:

Vietnam

Scope of application: In Vietnam, real estate tax mainly includes taxes on the ownership and transfer of real estate. The owner of real estate needs to pay annual property tax, which includes taxes on land use rights and taxes on buildings. When transferring real estate, transfer tax is required, which is usually 5% of the transaction amount. In addition, there are taxes related to land use rights, such as land rent.

Policy background: The Vietnamese government regulates the real estate market through real estate tax policies, increases local fiscal revenue, and ensures the rational use of land resources. Especially in the process of rapid urbanization, the government hopes to prevent overheating of the real estate market and land speculation through tax means.

China

Scope of application: China’s real estate taxes include property tax, deed tax, land value-added tax, etc. Property tax usually applies to the holding of urban commercial and residential properties, and is levied based on the rental income or original value of the property. Deed tax is levied when real estate is traded, and the tax rate is 3%-5% of the transaction amount. Land value-added tax is levied on the added value of land and its attachments, and is levied at different levels according to the added value. In addition, China also imposes corporate income tax and value-added tax on real estate developers.

Policy background: China’s real estate tax policy aims to regulate the real estate market, control the rapid rise in housing prices, and increase local government fiscal revenue. At the same time, through measures such as land value-added tax, the government hopes to curb land speculation and promote the rational use of land resources.

Singapore

Scope of application: Singapore’s real estate taxes mainly include property tax and stamp duty. Property tax is levied on the annual value of the property, and the tax rate varies according to the use and type of the property. Stamp duty is levied on real estate transactions, including buyer’s stamp duty (BSD) and additional buyer’s stamp duty (ABSD), the latter mainly for non-resident buyers and investment purchases. In addition, Singapore also implements additional tax measures for high-end residential properties, such as luxury home tax.

Policy Background: Singapore regulates the real estate market through real estate tax policies, especially playing an important role in preventing real estate speculation and maintaining housing market stability. Stamp duty and property tax revenue are one of the important sources of revenue for the Singapore government.

Japan

Scope of application: Real estate taxes in Japan mainly include fixed asset tax and real estate acquisition tax. Fixed asset tax is levied annually on owners of land and buildings, and the tax rate is usually 1.4% of the assessed value. Real estate acquisition tax is levied when real estate is purchased or inherited, and the tax rate is 4%. In addition, there are special real estate taxes and urban planning taxes for companies. The former is levied on companies with large real estate, and the latter is used for urban infrastructure construction.

Policy background: Japan’s real estate tax policy aims to stabilize the real estate market and provide financial support to local governments for urban planning and the maintenance and construction of public facilities. Through higher real estate acquisition taxes, the Japanese government hopes to regulate the land market and prevent speculation.

South Korea

Scope of application: Real estate taxes in South Korea include property tax and comprehensive real estate tax. Property tax is levied on holders of property such as land, buildings, ships and aircraft, and the tax rate varies according to the assessed value and use of the property. Comprehensive real estate tax is an additional tax on high-value real estate, mainly applicable to residential and commercial real estate held by individuals and companies. South Korea also imposes transfer tax and stamp duty on real estate transactions.

Policy Background: South Korea’s real estate tax policy is not only an important source of government revenue, but also used as an important tool to regulate the real estate market. Through property tax and comprehensive real estate tax, the government hopes to control high housing prices, prevent overheating of the real estate market, and promote the healthy development of the residential market.

Thailand

Applicability: Real property taxes in Thailand include land and building taxes. Land and building taxes are levied on all owners of land and buildings, and the tax rate varies depending on the land use (agricultural, residential, commercial) and the type of building. In addition, Thailand also imposes transfer tax and stamp duty on real estate transactions, which are usually levied as a proportion of the transaction amount.

Policy Background: Thailand promotes the rational use of land and real estate through real estate tax policies and increases local government fiscal revenue. The reform of land and building taxes aims to expand the tax base, improve tax transparency, and reduce the problem of idle land.

the Philippines

Scope of application: Real estate taxes in the Philippines mainly include real estate tax and transfer tax. Real estate tax is levied on owners of land and buildings, and the tax rate is determined by local governments based on the assessed value, usually 1%-2% of the assessed value. Transfer tax is levied when real estate is traded, and the tax rate is 6% of the transaction amount. In addition, the Philippines also levies real estate value-added tax (CGT) and stamp duty in specific areas.

Policy background: The Philippines’ real estate tax policy aims to increase local fiscal revenue and support local government infrastructure construction and public services. At the same time, through transfer tax and real estate value-added tax, the government hopes to regulate the real estate market and promote the healthy development of the real estate industry.

Indonesia

Applicability: Indonesia’s real estate tax includes land and building tax. Land and building tax is levied on all owners of land and buildings, and the tax rate is usually 0.5% of the assessed value. In addition, Indonesia also imposes a transfer tax on the transfer of real estate, with a tax rate of 5% of the transaction amount. In the process of real estate development, developers are also required to pay value-added tax and other related taxes.

Policy background: The Indonesian government ensures stable fiscal revenue from the real estate market through real estate tax policy, while promoting the rational use of land and buildings. Land and building tax revenue is one of the important sources of revenue for local governments, supporting the development of local infrastructure and public services.

Import and export taxes

Import and export taxes are taxes levied by the state on imported and exported goods, mainly including tariffs and related taxes and fees. The import and export tax policies of various countries vary due to their economic structures, trade policies and international trade agreements. The following are the details of the import and export tax policies of various countries:

Vietnam

Scope of application: Vietnam’s import tax rates are divided into ordinary tax rates, preferential tax rates and preferential tax rates. Ordinary tax rates apply to imported goods from countries or regions that have not signed trade agreements with Vietnam; preferential tax rates apply to countries that enjoy most-favored-nation treatment, most of which are Vietnam’s major trading partners or members of the World Trade Organization (WTO); preferential tax rates apply to countries or regions that have signed free trade agreements (FTAs) with Vietnam, and the tax rates are usually lower to promote bilateral or multilateral trade.

Policy background: Vietnam promotes trade cooperation with various countries through a multi-level import tax rate structure, especially by reducing import tax rates through free trade agreements, attracting more imported goods into the domestic market, and supporting the development of an export-oriented economy.

China

Scope of application: China’s import tariffs are mainly divided into most-favored-nation tariffs, ordinary tariffs and agreement tariffs. Most-favored-nation tariffs apply to WTO member countries that have normal trade relations with China; ordinary tariffs apply to countries that do not have normal trade relations with China; agreement tariffs apply to countries or regions that have signed free trade agreements with China. These tariffs are usually lower than most-favored-nation tariffs to promote bilateral trade. In addition, China has also set temporary tariffs for some specific commodities such as high-tech equipment and raw materials to support the development of domestic industries.

Policy Background: China uses flexible import tax rate policies to regulate the structure and quantity of imported goods to support the country’s economic development strategy, especially its policy goals in promoting high-tech industries and energy conservation and environmental protection.

Singapore

Scope of application: Most goods in Singapore are exempt from import tax, which is one of the important policies of Singapore as a global trade hub. Only a few goods such as alcohol, cars, tobacco and petroleum products are subject to import tax. These taxes are not only a source of government revenue, but also used to regulate the consumption of specific goods. For example, the tax on cars is aimed at controlling the number of vehicles and reducing traffic congestion and environmental pressure.

Policy Background: Singapore’s import and export tax policy promotes free trade and international investment through a wide range of tax exemption measures, consolidating its position as an important global trade and logistics center. At the same time, the taxation of a small number of commodities also reflects the government’s regulatory and environmental protection goals.

Japan

Scope of application: Japan’s import tax rates vary depending on the type of goods and their origin. Japan regulates the structure of imported goods through the most-favored-nation rate, the ordinary rate, and the preferential rate (applicable to FTA and EPA partner countries). For example, goods such as agricultural products, textiles, and machinery and equipment have higher import tax rates to protect domestic industries, while raw materials and high-tech products enjoy lower import tax rates to promote economic development.

Policy Background: Japan protects its sensitive industries, such as agriculture and manufacturing, through import and export tax policies, while promoting economic cooperation and technology introduction with major trading partners through preferential tax rates and free trade agreements.

South Korea

Scope of application: Korea’s import tax rates vary depending on the type of goods and their origin. Similar to Japan, Korea regulates market access for imported goods through most-favored-nation rates, ordinary rates, and preferential rates. Korea applies higher import tax rates to sensitive industries such as agricultural products, steel, and automobiles to protect domestic industries, while for raw materials and high-tech products, Korea provides lower import tax rates or duty-free to support industrial and technological innovation.

Policy Background: South Korea supports the country’s economic development goals through import and export tax policies, especially in promoting high-tech industries and energy conservation and environmental protection. The South Korean government also actively expands export markets and reduces the cost of imported goods through FTAs ​​and EPAs.

Thailand

Scope of application: Thailand’s import tax rates vary according to the type of goods and their origin. Thailand’s import tax policy is divided into three main tax rates: most-favored-nation rate, ordinary rate and preferential rate. The most-favored-nation rate applies to WTO members and other countries that enjoy most-favored-nation treatment; the ordinary rate applies to countries that have not signed a free trade agreement with Thailand; the preferential rate applies to countries that have signed a free trade agreement with Thailand, which enjoys a lower tax rate to promote bilateral trade.

Policy background: Thailand protects sensitive domestic industries such as agriculture and textiles through import tax policies. At the same time, it promotes bilateral trade and economic cooperation and promotes the diversification of the domestic economy by signing free trade agreements with major trading partners.

the Philippines

Scope of application: The import tax rates in the Philippines vary according to the type of goods and their origin. The Philippines regulates market access for imported goods by implementing the most-favored-nation rate, the ordinary rate, and the preferential rate. The most-favored-nation rate applies to countries with which the Philippines has normal trade relations; the ordinary rate applies to countries with which the Philippines does not have normal trade relations; and the preferential rate applies to countries with which the Philippines has signed a free trade agreement, which is usually lower than the most-favored-nation rate to promote bilateral or multilateral trade.

Policy Background: The Philippines regulates trade flows through import and export tax policies to protect key domestic industries, especially agriculture and manufacturing, while promoting economic development and regional economic cooperation through free trade agreements and preferential tax rates.

Indonesia

Scope of application: Indonesia’s import tax rates vary depending on the type of goods and their origin. Indonesia regulates imports mainly through most-favored-nation rates, ordinary rates and preferential rates. Most-favored-nation rates apply to WTO member countries, ordinary rates apply to countries that do not have normal trade relations with Indonesia, and preferential rates apply to countries or regions that have signed free trade agreements with Indonesia. Indonesia imposes higher import tax rates on certain strategic goods such as steel, machinery and equipment, and agricultural products to protect domestic industries.

Policy background: Indonesia protects its key industries through import tax policies and promotes the sustainable development of the national economy. At the same time, Indonesia attracts more foreign investment and technology transfer through preferential tax rates and free trade agreements to promote industrial modernization and economic diversification.

Special Sales Tax

Special sales taxes are usually applied to goods that have a greater impact on health, the environment or society, such as tobacco, alcohol and cars. Countries impose special sales taxes to regulate consumption, increase government revenue, and address public health and environmental issues. The following are the details of the special sales tax policies of various countries:

Vietnam

Tobacco products: 75%

Scope of application: Vietnam imposes a high special sales tax on all tobacco leaf products to reduce tobacco consumption and improve public health. The 75% tax rate reflects the Vietnamese government’s strict attitude towards tobacco control and aims to reduce tobacco use rates through price mechanisms.

Alcohol: 35%-65%

Applicability: Alcoholic products in Vietnam are subject to a special sales tax of 35%-65% depending on the alcohol content and type. Low-alcohol drinks such as beer are subject to a lower tax rate, while high-alcohol spirits are subject to a higher tax rate.

Cars with less than 9 seats: 35%-150%

Scope of application: Vietnam imposes a special sales tax of 35%-150% on passenger cars with less than 9 seats, with the tax rate depending on the engine displacement and vehicle type. Luxury cars with larger displacement and high-emission vehicles are usually subject to higher tax rates to control environmental pollution and traffic congestion.

China

Tobacco: 56%

Scope of application: China imposes a special sales tax of 56% on tobacco products. This high tax rate is intended to reduce tobacco consumption, especially among young people and low-income groups, by making tobacco more expensive and reducing smoking rates.

Alcohol: 20%-50%

Applicability: Alcoholic products in China are subject to a special sales tax of 20%-50% depending on the alcohol content and type. Low-alcohol drinks such as wine and beer are generally subject to lower taxes, while strong alcohol such as baijiu is subject to higher taxes.

Automobile: 1%-40%

Scope of application: China’s special sales tax on automobiles varies from 1% to 40% depending on engine displacement and environmental standards. Low-emission, energy-saving vehicles are generally subject to lower tax rates, while high-emission, large-displacement vehicles are subject to higher tax rates to encourage environmentally friendly travel.

Singapore

Automobile: 20%

Applicable: Singapore imposes a special sales tax of 20% on all new cars. The Singapore government uses this high tax rate and other measures (such as the Certificate of Entitlement system) to control the number of vehicles, reduce traffic congestion and environmental pollution.

Alcohol: Taxed according to alcohol content

Applicability: Singapore’s special sales tax on alcoholic products is levied based on alcohol content, with the tax rate increasing as the alcohol concentration increases. This policy aims to reduce the consumption of high-alcohol beverages and reduce the risk of alcohol abuse.

Japan

Tobacco: 16.4%

Applicability: Japan imposes a special sales tax of 16.4% on tobacco products. Although the tax rate is relatively low, Japan has increased the price of tobacco overall through a combination of tax structures, including other health-related taxes, to reduce tobacco use.

Alcohol: Taxed according to alcohol content

Scope: Japan’s special sales tax on alcoholic products is levied based on alcohol content, with traditional alcoholic drinks such as beer and sake having lower tax rates and spirits and other high-alcohol beverages having higher tax rates.

Automobile: 5%-10%

Scope of application: Japan’s special sales tax on cars is levied at a rate of 5%-10% based on the model and emission standards. Japan uses this tax to encourage the purchase of environmentally friendly vehicles, reduce carbon emissions, and promote green transportation.

South Korea

Tobacco: 75%

Applicability: South Korea imposes a special sales tax of 75% on tobacco products. This high tax rate is implemented to effectively reduce tobacco use, support public health goals, and provide financial support for health-related government programs.

Alcohol: Taxed according to alcohol content

Application: South Korea’s special sales tax on alcoholic products is also levied based on alcohol content. High rates apply to hard liquor, while low-alcohol drinks such as beer and wine are taxed at lower rates.

Automobile: 5%-10%

Scope of application: South Korea’s special sales tax rate for automobiles is 5%-10%, which is mainly determined by the vehicle’s emission standards and displacement. High-emission and large-displacement vehicles have higher tax rates, which is intended to promote the use of energy-saving and environmentally friendly vehicles.

Thailand

Tobacco: 20%-40%

Scope of application: Thailand imposes a special sales tax of 20%-40% on tobacco products, depending on the type and price of the product. Through this policy, the Thai government hopes to reduce tobacco consumption and improve public health, especially in rural areas.

Alcohol: Taxed according to alcohol content

Scope of application: Thailand’s special sales tax on alcoholic products is levied based on alcohol content, with high rates for strong alcoholic beverages and low rates for low-alcoholic beverages such as beer and wine. This policy is an important measure taken by the Thai government to control alcohol abuse.

Automobile: 30%-50%

Scope of application: Thailand imposes a special sales tax of 30%-50% on cars, with the tax rate varying according to displacement and environmental standards. Luxury cars with large displacement have a higher tax rate to curb demand for luxury cars and reduce traffic congestion and environmental pollution.

The Philippines

Tobacco: 25%-50%

Application: The Philippines imposes a special sales tax of 25%-50% on tobacco products, depending on the type and price of the product. This high tax rate is intended to reduce tobacco consumption, especially among low-income groups.

Alcohol: Taxed according to alcohol content

Scope of application: The Philippines imposes a special sales tax on alcoholic products based on alcohol content, with higher rates for spirits and lower rates for beer and low-alcohol drinks. The government uses this measure to control alcohol consumption and reduce alcohol-related social problems.

Automobile: 4%-50%

Scope of application: The Philippines’ special sales tax on cars varies according to the type of vehicle, displacement and environmental standards, with tax rates ranging from 4% to 50%. Cars with large displacement and high pollution have higher tax rates to encourage the use of environmentally friendly cars.

Indonesia

Tobacco: 57%

Applicable: Indonesia imposes a 57% special sales tax on tobacco products. As one of the countries with the highest tobacco consumption in the world, Indonesia has increased taxes to control tobacco consumption and support public health programs.

Alcohol: Taxed according to alcohol content

Scope of application: Indonesia’s special sales tax on alcoholic products is levied based on alcohol content. The higher the alcohol content, the higher the tax rate. This policy aims to control the consumption of high-alcohol beverages and reduce alcohol abuse.

Automobile: 10%-125%

Scope of application: Indonesia imposes a special sales tax of 10%-125% on cars, with the tax rate depending on the displacement, environmental standards and vehicle type. Luxury cars and large-displacement vehicles are usually subject to higher tax rates to regulate the car market and reduce environmental pollution.

In summary, Vietnam has significant differences with China, Singapore, Japan, South Korea, Thailand, the Philippines and Indonesia in terms of corporate income tax, personal income tax and value-added tax. Vietnam has relatively low tax rates, especially for specific industries and regions, with more tax incentives aimed at attracting foreign investment and promoting economic development. However, each country has its own unique tax system, reflecting its economic development stage and policy goals. Investors need to consider these factors comprehensively when making decisions, and evaluate the most suitable investment location in combination with specific project and industry characteristics.