Tax for Logistics and International Transport

Tax for Logistics and International Transport: 5 Points Businesses Get Wrong

Logistics and international transport have a more complex "tax map" than many sectors: one company may issue 0% VAT invoices (international transport), standard-rate invoices (domestic services), and withhold contractor tax when paying foreign shipping lines. An error at any link leads to arrears. This article systematizes the 5 key points.

Contents

• 1. The tax picture of a logistics enterprise
• 2. 0% VAT for international transport — and the documentation trap
• 3. CIT: sector-specific revenue and costs
• 4. Contractor tax on payments to foreign carriers
• 5. DTAs and the international transport article
• 6. Three common audit risks
• 7. Frequently asked questions
• 8. When to work with a lawyer
• References

1. The tax picture of a logistics enterprise

A typical logistics enterprise touches almost every tax:

• VAT: 0% for qualifying international transport; standard rates for domestic services (warehousing, forwarding, domestic transport);
• CIT: on logistics income under the Law on CIT 67/2025;
• Contractor tax: on payments to foreign shipping lines and carriers;
• PIT: for drivers, warehouse and office staff;
• Import/export duties / customs fees: if acting as customs broker (related, though not the enterprise's own tax).

The first requirement of tax accounting here is revenue separation: domestic vs international, as the two streams face entirely different VAT regimes.

2. 0% VAT for international transport — and the documentation trap

International transport qualifies for 0% VAT — a major benefit with strict conditions. In principle, the enterprise needs:

• An international transport contract (or equivalent document);
• Bank payment proof;
• Documents proving the service was performed outside Vietnam (bills of lading, handover records, etc.).

The trap: many enterprises issue 0% invoices without keeping the full dossier. When a tax audit demands proof that cannot be produced, all 0% revenue is reassessed at standard rates plus penalties and late-payment interest. The golden rule: no documents, no 0%.

3. CIT: sector-specific revenue and costs

Taxable CIT revenue for logistics includes freight charges, warehousing, forwarding and agency fees. Deductible costs have frequently disallowed specifics:

• Fuel: the largest cost; valid invoices and reasonable consumption norms required;
• Vehicle repair and maintenance: invoices and acceptance records;
• Depreciation: high-value vehicles — wrong depreciation frames affect many years;
• Off-book costs: informal port payments and uninvoiced expenses — non-deductible and carrying other legal risks.

4. Contractor tax on payments to foreign carriers

When a Vietnamese enterprise (cargo owner or forwarder) pays freight to foreign shipping lines/carriers, the payment may fall under foreign contractor tax. The Vietnamese enterprise must then:

• Withhold tax before paying the foreign party;
• Declare and pay on the foreign contractor's behalf;
• Keep contracts and payment proof.

Missing this is a common error: many assume "paying abroad means no Vietnamese tax" — while the law says the opposite. Assess each contract specifically, together with the relevant DTA.

5. DTAs and the international transport article

Most DTAs signed by Vietnam contain a dedicated international transport article (usually Article 8 under the OECD model): profits from operating ships and aircraft in international transport are taxable only in the enterprise's residence state.

This has major practical significance: a foreign carrier with a DTA with Vietnam may be exempted/reduced from Vietnamese tax on international transport profits — but must complete notification procedures and prove tax residence. No procedure, no benefit.

6. Three common audit risks

1. Wrongly applied 0% VAT for missing documents — reassessed at standard rates plus penalties and interest.
2. Failure to withhold contractor tax on foreign carrier payments.
3. Fuel, repair and depreciation costs lacking invoices — disallowed from deductible CIT expenses.

7. Frequently asked questions

Q: What VAT rate applies to international transport services?

A: International transport qualifies for 0% VAT if contract, documentation and payment conditions are met. Failing the conditions means the standard rate applies, with possible arrears.

Q: What are the conditions for 0% VAT on international transport?

A: In principle: an international transport contract (or equivalent), bank payment proof, and documents proving the service was performed outside Vietnam. Full documentation must be kept for tax audits.

Q: Is foreign contractor tax due when hiring foreign shipping lines?

A: Possibly. When a Vietnamese enterprise pays freight to foreign carriers, the payment may fall under foreign contractor tax — the Vietnamese party must withhold, declare and pay on their behalf.

Q: Do DTAs have special provisions for transport?

A: Yes. Most DTAs signed by Vietnam contain an international transport article (usually Article 8 under the OECD model): profits from international transport are taxable only in the enterprise's residence state. This matters when foreign carriers operate in Vietnam.

Q: What do tax audits of logistics firms usually target?

A: Three common groups: (1) wrongly applied 0% VAT for missing documents; (2) failure to withhold contractor tax on foreign carrier payments; (3) fuel, repair and vehicle depreciation costs lacking invoices.

Q: How are domestic logistics services (warehousing, domestic forwarding) taxed?

A: Logistics services performed within Vietnam are subject to standard VAT rates (no 0% as for international transport). Domestic and international revenue must be separated in filings.

8. When to work with a lawyer

Work with a lawyer when: facing arrears from wrongly applied 0% rates; assessing contractor tax duties in foreign carrier contracts; applying DTAs for foreign partner relief; or reviewing documentation systems before a tax audit. FLAT Law Firm advises logistics and transport enterprises on tax — contact hotline 0988424851.

References

• Law on Value Added Tax and current guiding documents.
• Law on Corporate Income Tax 67/2025/QH15 (effective 01/10/2025).
• Foreign contractor tax regulations and current guiding documents.
• Double taxation agreements signed by Vietnam.
• Content cross-checked at time of writing (28/9/2026).

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