When a foreign investor buys shares in a Vietnamese company, the company's past tax positions come with it. Unpaid tax, disallowed deductions, incentives claimed without meeting conditions, invoices that should never have been accepted — all of it stays with the company and becomes the new owner's problem. Tax due diligence is how a buyer finds these before signing and prices or protects against them.
Vietnam has two features that shape the work. First, a great deal of the tax data is electronic — e-invoices, e-filed returns, the tax code register — so a well-organised target can show a lot quickly, and a disorganised one reveals itself quickly too. Second, formal tax clearance at the moment of sale is limited, so the buyer relies on its own review and on the contract. This checklist is written for foreign acquirers and their advisers; the order follows how the risk usually shows up.
Start with the public record
Before any data room opens, check the target — and its branches and main counterparties — on the tax authority's taxpayer information lookup. The record shows the registered name, address, managing tax office and status of the tax code. Status codes matter: for example, status 03 means the business has ceased operating but has not completed the procedure to terminate its tax code, and status 06 means it is not operating at its registered address.
A status is a starting point, not a verdict. It does not say whether a company is compliant, has debts or has done anything wrong; it says what the register currently shows, and a mismatch between the register and what the seller tells you is a question to ask. Context also helps: in July 2026 the tax authority launched a campaign to clean up the register under Official Dispatch 18/CĐ-CT, with a review list of 617,462 enterprises as of that month — companies that had stopped operating without completing dissolution, and companies not operating at their registered address with tax debts. A target, or a key supplier, appearing in that category deserves a closer look. For more on reading company records, see our Vietnam business data section.
Core review areas
| Area | What to review | Typical finding |
|---|---|---|
| Filing and payment | Returns filed and payments recorded in the e-tax account; notices from the tax authority; outstanding balances | Late filings, unanswered notices, small unpaid balances with accruing late-payment interest |
| E-invoices | Invoices issued on the portal against revenue; invoices received against expenses and input VAT | Revenue invoiced late or not at all; purchase invoices from suppliers no longer active |
| VAT | Input VAT claims, non-cash payment evidence for purchases of VND 5 million or more, refunds received | Credits claimed on cash-paid invoices; refunds that could be reviewed again |
| CIT | Finalisations, add-backs, expenses supported only by internal documents, losses carried forward | Deductions without invoices or contracts; losses that may not survive review |
| Incentives | Basis for each incentive and evidence the conditions were met, year by year | Incentive applied to income from activities outside the qualifying project |
| Related parties | Disclosures, documentation, intercompany agreements, fees and interest paid abroad | Management fees with no evidence of service; no local file |
| Payroll and PIT | Withholding, finalisation, treatment of allowances, expatriate staff | Allowances excluded from taxable income without basis; expatriates paid offshore not reported |
| Foreign contractor tax | Payments abroad for services, royalties, interest, software | Contractor tax not declared on payments treated as "purchases of goods" |
The VAT framework is Law 48/2024/QH15; CIT from the 2025 tax year is under Law 67/2025/QH15. For earlier years the old laws apply, so a review covering several years needs to read each year under the rules in force at the time.
Where findings usually come from
Across many Vietnamese deals, the same few patterns account for most of the money:
- Revenue that did not go through invoices. Sales to individuals, cash sales or sales paid into personal accounts of owners. Beyond the tax, this is often a sign that the accounts do not reflect the business being bought.
- Purchase invoices from suppliers that later disappeared. If the supplier stopped operating or was found to issue invoices without real transactions, the buyer's input VAT and expenses become questionable.
- Incentives applied too widely. An incentive granted for a project applied to all income, including income from other activities.
- Payments abroad without contractor tax. Common where the target imported services, software or know-how under contracts that were treated as simple purchases.
- Payroll structures. Allowances, bonuses paid outside payroll, or staff paid through service contracts to avoid withholding.
Some of these are mistakes; some are deliberate. The buyer does not need to decide which in order to protect itself, but the second kind changes how much of the rest of the data can be trusted.
Share deal or asset deal
In a share deal, the buyer acquires the company with its entire tax history. The tax code, invoices, incentives and liabilities continue. That is usually why share deals are chosen — licences, contracts and incentives stay in place — and it is why the due diligence and the contract protections matter.
In an asset deal, the buyer, usually through its own Vietnamese company, acquires assets such as a factory, equipment or a business line. Past tax liabilities generally stay with the seller, but the transaction itself has tax consequences: invoices and VAT on the assets, possible transfer taxes and fees on land use rights and buildings, and the need to rebuild licences and incentives. It is cleaner on history and heavier on transaction cost and time.
The sale of shares or capital by the seller also has tax consequences for the seller. Where the seller is a foreign company, the rules have in many cases made the Vietnamese target responsible for declaring and paying the tax on the seller's gain on its behalf. Check the current rules for your structure — the buyer will want to know that this has been done, because a gap can come back to the company it now owns.
Turning findings into deal terms
- Price. Quantified exposures that are likely to crystallise can be deducted from the price.
- Specific indemnities. For identified risks, a specific indemnity from the seller, not limited by the general caps and time limits, is the usual protection.
- General tax warranties and indemnity covering pre-closing periods, with a survival period matched to how long the tax authority can review past years under the Law on Tax Administration.
- Escrow or holdback, because a warranty from a seller who has taken the money abroad is only as good as your ability to collect.
- Pre-closing remediation. Some issues are better fixed before closing — supplementary returns filed, contractor tax declared, registrations corrected — with the seller bearing the cost.
- Conduct of claims. Who handles a tax inspection covering pre-closing years, and who decides whether to settle.
We do not include penalty estimates here; exposure should be calculated by an adviser on the rules in force for each year. Late-payment interest, calculated daily on unpaid tax, is often the fastest-growing part of an old liability and belongs in any calculation.
After closing: the first 100 days
The due diligence report is also the new owner's first to-do list. In the first months after closing:
- take control of the digital signature, the e-tax account and the e-invoice registration, and change the registered contacts;
- update the tax registration for any change in owner, legal representative or charter details;
- fix the process issues found — supplier checks, non-cash payment, invoicing timing — so that post-closing periods are clean;
- start a monthly reconciliation of invoices on the portal, the ledger and the VAT return;
- keep the due diligence file and deal documents with the company's records for at least 10 years, the minimum retention for accounting documents under the Law on Accounting.
A buyer that does these quickly makes any later claim against the seller easier to prove: there is a clear line between the periods the seller controlled and the periods the buyer did.
Frequently asked questions
Can we get a tax clearance certificate for the target before signing?
Formal clearance at the moment of sale is limited in Vietnam. The e-tax account shows filings, payments and notices, but a buyer should rely mainly on its own review and on contract protection.
What does status 03 or 06 on the tax code register mean?
Status 03 means the business has ceased operating but has not completed the procedure to terminate its tax code; 06 means it is not operating at its registered address. Neither status by itself says whether the company owes tax or has done anything wrong.
Do past tax liabilities stay with the company after we buy the shares?
Yes. In a share deal the company keeps its full tax history. That is why due diligence, specific indemnities and escrow matter.
Who pays tax on the seller's gain when a foreign company sells its shares?
The seller bears it, but the rules have in many cases made the Vietnamese target responsible for declaring and paying it on the seller's behalf. Check the current rules for your structure and confirm it has been done.
How many years should the review cover?
At least the years the tax authority can still review under the Law on Tax Administration, and longer where incentives or losses carried forward depend on earlier years.
Should we fix issues before or after closing?
Where possible, before, at the seller's cost — supplementary returns, contractor tax declarations, registration corrections. What cannot be fixed in time is covered by specific indemnities and escrow.
