A Vietnamese company that pays an overseas provider for cloud hosting, a software subscription or online advertising is buying services supplied from abroad and used in Vietnam. Those payments fall within the reach of Vietnamese tax. Either the foreign provider has registered with the Vietnamese tax authority under the regime for foreign suppliers without a permanent establishment and pays the tax itself, or the Vietnamese business customer may need to withhold foreign contractor tax (FCT) on the payment. Which applies depends on the provider, the service and the rules in force for business customers — and it has to be checked, not assumed.
These payments are awkward for finance teams for practical reasons. They are small and frequent, charged monthly to a corporate card, governed by online terms of service that nobody printed, and evidenced by a receipt emailed to whoever set up the account. Yet across a year they can add up to one of the company's largest overseas costs. This guide sets out how the two regimes fit together, the classification questions that matter and the minimum records that keep the expense defensible.
Two routes for the same tax
Vietnam taxes cross-border digital services through two routes. The first is the familiar FCT regime: the Vietnamese customer withholds the VAT and CIT components from what it pays the foreign provider. The second is the foreign supplier registration regime, built on the Law on Tax Administration (Law 38/2019/QH14): an overseas provider of e-commerce, digital-based and other services that has no permanent establishment in Vietnam registers, declares and pays tax directly through a dedicated portal run by the tax authority. The VAT side follows Law 48/2024/QH15 and its guiding Decree 181/2025/NĐ-CP; the CIT side follows Law 67/2025/QH15. Procedures now also follow the 2026 tax administration guidance: Decree 252/2026/NĐ-CP and Circular 89/2026/TT-BTC.
The portal regime was designed mainly for services sold to individuals in Vietnam, where no business customer exists to withhold. For services sold to Vietnamese businesses, the guidance has historically kept a role for the business customer's withholding. A provider's registration on the portal therefore does not by itself tell you that your company has nothing to do. Confirm in the current guidance how your purchase is treated, and keep the result of that check in the vendor file.
Classifying what you buy
Classification matters because the VAT treatment and the CIT percentage differ between activities. Typical overseas digital purchases fall into a few groups:
| Purchase | How it is usually analysed | What to check |
|---|---|---|
| Cloud hosting, storage, computing capacity | A service supplied from abroad and used in Vietnam | Whether the provider declares Vietnamese tax itself; your role as business customer |
| Software subscription (SaaS) | Service or licence, depending on the terms and what is delivered | Whether the item is within VAT or non-taxable software; the CIT percentage for services or royalties |
| Perpetual or term software licence | Often a royalty-type payment for the right to use software | VAT status of the software; royalty treatment for CIT |
| Online advertising | A service supplied from abroad, consumed where the audience is | Whether campaigns target Vietnam; the provider's registration; the billing entity |
| Online training, data subscriptions, market reports | Services supplied from abroad | Whether any part is performed and consumed entirely outside Vietnam |
Advertising deserves a specific note. A Vietnamese company that pays for advertising aimed at audiences outside Vietnam — a campaign for export customers, for example — is in a different position from one advertising to Vietnamese consumers. Keep the campaign targeting settings as part of the evidence.
Who bills you matters
Large platforms often bill through different entities depending on the customer's country: a regional entity abroad, or a Vietnamese subsidiary or reseller. Before deciding on FCT, look at the entity named on the invoice or receipt:
- A Vietnamese entity issuing a Vietnamese e-invoice. The purchase is a domestic purchase. There is no FCT; you check the e-invoice and claim input VAT on the usual conditions.
- A foreign entity registered on the foreign supplier portal. The provider declares tax on its sales in Vietnam. Check what the current guidance requires of a business customer in this situation, and keep a record of the provider's registration.
- A foreign entity with no Vietnamese registration. The payment is a payment to a foreign contractor, and the Vietnamese business customer withholds FCT on it under the ordinary rules.
Billing entities change. A provider that billed from abroad last year may bill locally this year, or the reverse, especially after account migrations. Review the invoicing entity for your main digital vendors at least once a year.
Card payments and the evidence gap
For VAT input credit, Law 48/2024/QH15 requires non-cash payment evidence for purchase invoices of VND 5 million or more. A corporate card or a bank transfer from the company account meets the non-cash requirement; an employee's personal card reimbursed later is a much weaker trail. For CIT deductibility, check the current guidance on non-cash payment rather than assuming the VAT threshold applies unchanged.
The minimum file for each recurring digital vendor:
- The terms of service or order form in force, saved as a file with the date of acceptance and the account owner.
- Monthly receipts or invoices naming your company as the customer, not an individual employee.
- The card or bank statement lines matching each receipt.
- A note of the billing entity and its tax position (Vietnamese invoice, portal registration, or neither), and the FCT treatment you applied.
- For advertising, a copy of the campaign settings or reports showing where the audience was.
Accounting documents used directly for bookkeeping and preparing financial statements must be kept for at least 10 years under the Law on Accounting. Online accounts get closed and receipts disappear with them; download and archive, do not rely on the vendor's portal as your record.
Annual plans, credits and refunds
Digital vendors rarely bill in the tidy way a withholding return expects. Three patterns need a decision in advance:
- Annual prepayments. A discounted yearly plan paid upfront is a payment when it is made, not twelve payments spread over the year. Where withholding applies, it applies to the prepayment; the accounting side then spreads the cost over the service period.
- Promotional credits and refunds. Advertising credits, service-level refunds and billing corrections reduce what was actually paid. Keep the credit notes with the original receipts so that the base for any withholding and the expense booked both reflect the net amount.
- Usage-based billing in foreign currency. Cloud charges vary month to month and are billed in foreign currency. Use the exchange rate required by current rules for the date of payment and keep the rate with the calculation; a spreadsheet using one average rate for the year will not reconcile with the bank.
Settle these treatments once, write them into the vendor register, and apply them consistently. Most audit adjustments on digital spending come from inconsistent handling across months rather than from a single wrong decision.
A workable routine
Hypothetical example. Suppose a software company in Ho Chi Minh City pays six overseas vendors by corporate card: two cloud providers, a design tool, a project management tool, an advertising platform and a data subscription. The finance team builds a vendor register with one line per vendor, recording the billing entity, the contract type, whether the vendor is registered on the portal and the treatment applied. Each month, card statements are matched to receipts, withholding returns are prepared for vendors where the company has to withhold, and new vendors cannot be added to a corporate card without an entry in the register.
The register is simple, but it solves the most common audit problem with digital spending: a year of card charges with no contracts, receipts addressed to staff, and no explanation of why no FCT was declared.
Where to check
The tax authority's portal for foreign suppliers publishes information on registered overseas providers; use it to confirm a vendor's registration rather than relying on a statement in its help pages. For vendors that bill through a Vietnamese entity, check the e-invoice on the e-invoice portal of the tax authority and the seller's status in the taxpayer information lookup. For your own withholding returns, the company's e-tax account shows what was filed and paid.
If you find that a significant digital vendor was never reviewed, correct it for the open periods with your adviser rather than silently changing treatment from next month. A consistent, documented position is easier to defend than a sudden switch with no explanation.
Frequently asked questions
If a foreign provider is registered on the portal, do we still need to withhold?
Not necessarily, but do not assume either way. The portal regime was built mainly for sales to individuals; confirm in the current guidance what a business customer must do for your purchase and record the result.
Is software subject to VAT in Vietnam?
Some software products and services may be outside VAT or non-taxable under the VAT law, depending on what is supplied. Check the current Law 48/2024/QH15 and its guidance for your specific item.
Can we deduct subscriptions paid on an employee's personal card?
It is risky. The receipt is usually in the employee's name and the payment trail runs through a personal account. Move recurring vendors to a company card or bank transfer, with receipts in the company's name.
Does advertising aimed at foreign customers fall under FCT?
It may be treated differently from advertising aimed at Vietnamese audiences, because consumption is outside Vietnam. Keep campaign targeting evidence and check the current rules on services consumed abroad.
Our cloud provider now issues Vietnamese e-invoices. What changes?
The purchase becomes a domestic purchase from a Vietnamese seller. You no longer withhold FCT on it; you check the e-invoice and claim input VAT on the usual conditions.
How long must we keep online receipts?
Accounting documents used directly for bookkeeping and financial statements must be kept for at least 10 years under the Law on Accounting. Download and archive receipts; vendor portals are not a record.
