5 Key Tax Risks FDI Enterprises Must Review For 2026

If your FDI company has just completed its 2025 tax finalization in Vietnam, this is not merely the end of a financial cycle — it is a critical moment to reassess, restructure, and proactively manage risks for the year ahead.

As we move into 2026, Vietnam’s tax and accounting landscape is evolving more rapidly and systematically. Tax authorities are no longer relying solely on post-audit reviews, but are increasingly shifting toward data-driven risk assessment and real-time monitoring.

Below are the five critical tax risk areas that FDI enterprises should not overlook:

1. RELATED PARTY TRANSACTIONS – THE CORE FOCUS OF TAX AUDITS

In 2026, related party transactions will remain the most heavily scrutinized area, especially with the anticipated updates to Decree 132.

What to review:

• Whether your transfer pricing policy genuinely complies with the arm’s length principle 
• Completeness and consistency of transfer pricing documentation (Local file, Master file) 
• Commercial rationale and supporting evidence for intercompany charges (management fees, royalties, service fees, etc.) 

Core risk:
The issue is often not obvious non-compliance — but the inability to substantiate the commercial rationale.

2. VAT AND EXPORTED SERVICES – DOCUMENTATION OVER SUBSTANCE

The application of the 0% VAT rate for exported services is now subject to stricter documentation requirements.

Key considerations:

• Contracts and invoices alone are no longer sufficient — businesses must provide evidence that services are consumed outside Vietnam 
• Business models such as on-the-spot export/import must be properly classified 
• Payment flows must align with regulatory requirements 

In practice:
Many businesses are not non-compliant in substance, but still face reassessments due to insufficient supporting documentation.

3. FOREIGN CONTRACTOR TAX (FCT) – ERRORS AT THE OBLIGATION IDENTIFICATION STAGE

Transactions with foreign suppliers (services, software, royalties, etc.) are under increasing scrutiny.

Common risks:

• Misidentification of taxable parties 
• Incorrect application of FCT and VAT rates 
• Failure to properly track and comply with withholding obligations 

Impact:
Beyond tax exposure, these issues can lead to commercial disputes with overseas vendors if not clearly addressed in contracts.

4. PERSONAL INCOME TAX (PIT) – COMPLIANCE PRESSURE FROM EXPATRIATES

With new PIT regulations effective from 2026, companies employing foreign experts will face heightened compliance expectations.

What to review:

• Accurate classification of taxable vs. non-taxable income 
• Proper treatment of benefits and allowances 
• Robust withholding and finalization processes with adequate supporting documents 

Practical risk:
Employers are typically ultimately liable for any errors in PIT compliance.

5. IFRS VS. VAS GAP – A SILENT BUT STRATEGIC RISK

The gap between international and local accounting standards is no longer a technical issue — it is becoming a strategic risk factor.

Key concerns:

• Differences in revenue recognition, expense treatment, and provisioning 
• Misalignment between group reporting (IFRS) and statutory reporting in Vietnam (VAS) 
• Direct impact on profit figures and tax obligations 

Impact:
Discrepancies affect not only financial data, but also management decisions and enterprise valuation.

3 PROACTIVE STEPS TO MITIGATE TAX RISKS

1. Conduct regular tax health checks: Review your accounting and tax systems at least every six months.
2. Strengthen documentation and audit trail: Go beyond invoices — ensure substance-based evidence for each transaction.
3. Stay ahead of regulatory changes: Closely monitor updates, especially those related to Decree 132, VAT, and PIT.

✅ CONCLUSION

In a landscape where tax authorities increasingly rely on data analytics, being compliant is no longer enough — businesses must be able to demonstrate and defend their compliance.

An early and proactive review not only minimizes tax exposure and penalties but also builds a foundation for transparent, sustainable, and scalable operations.

Contact TPM Tax Agency for in-depth advisory and tailored solutions for your FDI business.

Quyen Nguyen