To reduce Vietnamese tax on a payment to a treaty resident, the relief has to be claimed through a notification procedure with the tax authority, supported by a certificate of tax residence issued by the other jurisdiction. For payments subject to foreign contractor tax (FCT), the Vietnamese payer usually lodges the file with its managing tax office on the foreign party's behalf. Until a complete file has been lodged, the domestic rates apply.
In practice, most failed treaty claims do not fail on the law. They fail on paperwork: a residence certificate for the wrong year, a certificate that was not legalised when it needed to be, a file lodged after the payment, or a claim for a company that turns out not to be the beneficial owner of the income. This guide goes through the procedure in the order a finance team meets it, and ends with what to do when the file is late.
The rules behind the procedure
The right to relief comes from the treaty itself. The procedure comes from Vietnamese tax administration law: the Law on Tax Administration (Law 38/2019/QH14) and its implementing documents. For several years the forms and steps for treaty claims were set out in Circular 80/2021/TT-BTC. In mid-2026 the government and the Ministry of Finance issued new tax administration guidance — Decree 252/2026/NĐ-CP guiding the Law on Tax Administration and Circular 89/2026/TT-BTC guiding that law and its decree — so check which forms and steps apply to a claim you lodge now, rather than reusing last year's template.
We describe the procedure in principle. The exact list of documents, the forms and any timing rule should be confirmed against the current text before you rely on them.
Who files
| Situation | Who usually lodges the file | With which office |
|---|---|---|
| Foreign contractor paid under the withholding method | The Vietnamese payer, on the contractor's behalf | The tax office managing the payer |
| Foreign contractor that registers and declares itself | The foreign contractor or its representative | The tax office managing the contractor |
| Foreign individual with income from Vietnam | The individual, or the Vietnamese payer where it withholds | The office managing the payer or the individual's filing |
Even when the Vietnamese payer files, it depends on the foreign party for most of the documents. Build that into the contract: the foreign party provides a residence certificate each year and the confirmations the file needs, by a stated date, and bears the consequence if it does not.
What goes into the file
A typical treaty notification file for a payment subject to FCT contains:
- The notification form prescribed in the current guidance, completed for the foreign party and the income concerned.
- A certificate of tax residence issued by the competent authority of the other jurisdiction, covering the period concerned. Check whether the original must be legalised and whether a certified Vietnamese translation is required.
- The contract or a certified copy, showing the nature of the income — service, royalty, interest — and the amounts.
- Confirmation from the Vietnamese payer of the contract and the payments, where the payer files for the contractor.
- For dividends, interest and royalties, information that supports the foreign party's status as beneficial owner of the income, since treaty relief on these flows is generally conditional on it.
- A power of attorney if a representative files for the foreign party.
The contract should make the classification obvious. If the treaty treats the income as business profits but the invoice calls it a royalty, the tax office will ask which it is, and the answer should already be in the contract.
Residence certificates in practice
The certificate proves that the foreign party is a resident of the treaty partner for treaty purposes. Four points cause most problems:
- The right year. A certificate covers a period. A multi-year contract needs evidence of residence for each year in which relief is claimed, not only the year it was signed.
- The right entity. The certificate must name the entity that earns the income and signs the contract, not its parent or a sister company.
- The right issuer. It must be issued by the competent tax authority of the treaty partner, in the form that authority uses. A letter from the company's own auditor is not a residence certificate.
- Formalities. Legalisation and translation requirements depend on the current rules and on the country of issue. Ask early; obtaining a legalised certificate from abroad can take weeks.
Our sister site NganhThue has a Vietnamese-language article on residence certificates for treaty claims that the local accounting team may find useful.
Timing, and what happens if the file is late
The safest sequence is: obtain the residence certificate, lodge the notification file, and then apply the reduced rate when you declare and pay the tax on the payment. Applying the treaty rate first and "sending the documents later" leaves the company exposed if the documents never arrive.
If a payment has already been made and FCT was withheld at the domestic rate, relief is not necessarily lost. The tax administration rules have provided a route to claim treaty relief after the event, leading to a refund or an offset of the tax overpaid. It is slower, it depends on the documents still being obtainable, and it is subject to time limits; check the current procedure and deadlines before you promise the foreign party a refund.
The reverse case is more serious. If the company applied a reduced rate without lodging a valid file, the tax office can assess the difference with late-payment interest — long calculated at 0.03% per day on the amount paid late; check the rate in force. The foreign party is often unwilling to reimburse the difference years later, so the cost stays with the Vietnamese payer.
Why tax offices question a claim
A lodged file can still be reviewed, during the year or in a later audit. The questions tend to repeat:
- Names that do not match. The entity on the residence certificate, the contract, the invoices and the bank transfer should be the same. A payment routed to a different group company's account raises the question of who really earns the income.
- Classification. Business profits, royalties and technical service fees are treated differently in many treaties. If the contract bundles a licence with support services, expect to explain the split.
- A permanent establishment in Vietnam. Relief under the business profits article assumes the foreign party has no permanent establishment in Vietnam. If its staff spend long periods on site, or someone in Vietnam habitually concludes contracts for it, the claim may fail on that ground.
- Beneficial ownership. For interest and royalties, an entity with little substance that passes most of the income on to another company is likely to be asked for more evidence.
- Periods not covered. Payments made in a year for which no residence certificate was ever provided.
None of these is solved by a better form. They are solved by aligning the contract, the payment flow and the facts before the claim is lodged, and by keeping the file up to date for the whole life of the contract.
A worked sequence for a new licence agreement
Hypothetical example. Suppose a Vietnamese food manufacturer signs a five-year trademark licence with a brand owner resident in a treaty jurisdiction, with quarterly royalty payments. The finance team:
- Confirms the domestic treatment: royalties subject to FCT, VAT status depending on the item licensed, CIT component at the royalty percentage.
- Reads the royalties article of the treaty and notes the maximum rate and the beneficial ownership condition.
- Writes into the licence that the licensor provides an annual residence certificate and the information needed for the notification by a fixed date, and bears any tax assessed if it fails to.
- Lodges the notification file with its managing tax office before the first royalty payment and applies the treaty rate from that payment.
- Keeps a calendar reminder each year for the new certificate, and pauses the reduced rate if it has not arrived.
Where to check
Confirm the managing tax office in the taxpayer information lookup before lodging: since 1 July 2025 Vietnam has 34 provinces and centrally run cities and a three-tier tax administration, and a file lodged with the wrong office can be returned. After lodging, keep the acknowledgement of receipt with the file. In the company's e-tax account, check that FCT returns on which a treaty reduction was applied correspond to payments where a notification exists. Treaty texts and their status are published by the Ministry of Finance and the tax authority.
Frequently asked questions
Can we apply the treaty rate before the notification file is lodged?
It is risky. If the file is never lodged or is incomplete, the tax office can assess the difference with late-payment interest. Lodge first, then apply the reduced rate.
How often is a new residence certificate needed?
A certificate covers a period, so relief claimed for later years needs evidence of residence for those years. For multi-year contracts, plan for a new certificate each year.
Does the residence certificate have to be legalised?
It depends on the current rules and the issuing country. Check before requesting it, since obtaining a legalised certificate from abroad can take weeks.
We withheld at the domestic rate by mistake. Can the foreign party get a refund?
Often yes, through a procedure to claim treaty relief after the event, leading to a refund or offset. It is subject to time limits and the documents must still be obtainable; check the current procedure.
Which tax office receives the file?
For a Vietnamese payer filing for a foreign contractor, generally the tax office managing the payer. Confirm it in the taxpayer information lookup before lodging.
Is a statement from the supplier that it is treaty resident enough?
No. Relief requires a residence certificate from the competent authority of the treaty partner and the notification file. A supplier's own statement or its auditor's letter does not replace them.
