Cloud Computing Services 2025: Tax Policies Businesses Need to Know

In the era of digital transformation 2025, cloud computing services are becoming a vital infrastructure solution, helping businesses optimize costs, scale flexibly, and improve efficiency. Instead of investing in traditional IT infrastructure, many companies now choose cloud services from major providers like AWS, Google Cloud, and Microsoft Azure.

With this strong growth, Vietnam’s tax policies for cloud computing services in 2025 have attracted great attention. Understanding VAT, CIT, and Foreign Contractor Tax (FCT) is essential to ensure compliance and minimize risks.

1. Applicable Taxes for Cloud Computing Services

a. Value-Added Tax (VAT)

• 10% VAT: Applied to cloud services consumed in Vietnam.

• 0% VAT: Applied to services provided to overseas organizations/individuals, consumed outside Vietnam, if conditions are met:

  • Valid service contract with foreign client;

  • Payment via bank transfer;

  • Proof of overseas service usage.

b. Corporate Income Tax (CIT)

• Standard rate: 20%.

• New rates from the 2025 CIT Law (effective Oct 1, 2025):

  • Enterprises with annual revenue not exceeding VND 3 billion: Tax rate of 15%.

  •  Enterprises with annual revenue over VND 3 billion but not exceeding VND 50 billion: Tax rate of 17%.

  • High-tech, education, healthcare, innovation sectors may enjoy 10% preferential rate for 15 years.

• Expenses for servers, infrastructure, software licenses are deductible if properly documented.

c. Foreign Contractor Tax (FCT)

When Vietnamese businesses purchase cloud services from foreign providers (AWS, Google Cloud, Microsoft Azure…) without a permanent establishment in Vietnam, Circular 103/2014/TT-BTC applies:

• Value Added Tax: 5% (except for software exempt from VAT).

• Corporate Income Tax for Contractors – Income arising in Vietnam earned by foreign contractors from providing the right to use utilities on existing technology platforms: 5%.

👉 Vietnamese companies must withhold, declare, and pay taxes on behalf of foreign providers, unless they are already registered to pay directly in Vietnam (e.g., Google, Microsoft, Meta).

2. Legal Framework

• Law on VAT No. 48/2024/QH15 (effective July 1, 2025).

• Decree 181/2025/NĐ-CP guiding VAT Law.

• Law on CIT No. 67/2025/QH15 (effective Oct 1, 2025).

• Circular 103/2014/TT-BTC on FCT.

• Circulars 219/2013, 78/2014, 96/2015 (valid until replaced).

3. Common Risks in Cloud Taxation

• Contracts do not clearly define service nature → risk of misapplied tax.

• Missing documents for export services → cannot apply 0% VAT.

• Late FCT declaration/payment → penalties and late payment interest.

👉 Recommendations for businesses:

• Stay updated on 2025 cloud computing tax policies.

• Ensure valid invoices and documentation.

• Review contracts with international cloud providers.

• Establish proper tax declaration and payment process.

Conclusion

Vietnam’s 2025 tax policies on cloud computing services remain stable but introduce key changes in VAT, CIT, and FCT. Businesses should actively stay informed to ensure compliance, optimize costs, and reduce legal risks.

📌 For expert support on cloud tax compliance, contact TPM via website or hotline (+84) 28 3505 1800.

Thao Phung