A question nearly every Vietnamese business running online ads has asked: when paying Google, Facebook (Meta) or TikTok for advertising, must we withhold foreign contractor tax (FCT)? The practical answer surprises many: in most cases, NO — because these platforms have registered, declared and paid tax directly in Vietnam. But exceptions exist, and getting it wrong can mean back-tax assessments and disallowed expenses.
The practical answer first: usually NO withholding required
Google, Facebook (Meta) and TikTok have registered, declared and paid tax directly in Vietnam through the e-portal for foreign suppliers. Vietnamese businesses that contract directly with these platforms therefore do not need to declare, withhold or pay FCT on their behalf — as confirmed by the tax authorities in multiple official letters:
- Official Letter 28807/CTHN-TTHT (2024);
- Official Letter 27326/CTHN-TTHT (2022);
- Tax Official Letter 08/2026: TikTok self-declares via the e-portal → the Vietnamese party does not withhold on its behalf;
- OpenAI has also registered a tax code in Vietnam.
The legal basis for this exception is Article 31 of Circular 89/2026/TT-BTC — “Tax declaration and payment by foreign suppliers”: foreign suppliers declare directly with the tax authority or through an authorised representative. When a foreign supplier has self-declared and paid tax, with invoices/documents already including Vietnamese tax → the Vietnamese party does not withhold on its behalf. The tax authority also publishes the names and websites of foreign suppliers that have not registered/declared/paid (Point (d), Clause 1, Article 31) — a source businesses can check.
Cases where you MUST still withhold
The exception only holds when the supplier has registered and pays tax directly in Vietnam. When a business pays advertising/digital-service fees to a foreign supplier not registered, declared or paying tax in Vietnam → the Vietnamese party must withhold, declare and pay on the supplier’s behalf under Article 30 of Circular 89/2026 (form 01/NTNN, NCCNN). The withholding principle is in Clause 3, Article 43 of Decree 252/2026/ND-CP.
FCT rates for online advertising services (where withholding applies): online advertising is a service →
- VAT: 5%
- CIT: 5%
- Total: 10% on taxable revenue
Bases: Article 7 of Circular 20/2026/TT-BTC and Clause 3, Article 12 of Decree 320/2025/ND-CP (FCT CIT rate: services 5%); Clause 6, Article 9 of Circular 69/2025/TT-BTC (FCT VAT percentage rates: services 5%). A technical note: FCT VAT sits in Article 9 of Circular 69/2025 — not Article 7 (Article 7 covers VAT refunds on exported goods and services). Tax is calculated on revenue (the total amount paid to the supplier), not on profit; net-price contracts must be grossed up first.
How businesses can self-check: invoices and the lookup portal
Don’t assert “never withhold, forever” and don’t rely on a fixed list of exempt suppliers — the list changes over time. Instead, businesses should:
- Check the invoice/documents: whether Vietnamese tax is already included;
- Look up the Department of Taxation’s e-portal for the list of registered/declaring/paying foreign suppliers and the list of those not yet compliant (Point (d), Clause 1, Article 31 of Circular 89/2026);
- If the supplier is not registered → withhold, declare and pay in full.
CIT consequence: are advertising expenses deductible?
Advertising expenses are deductible for CIT purposes if (Article 9 of Decree 320/2025):
- They serve production and business activities;
- There are lawful invoices and documents — where FCT withholding applies, the FCT declaration and payment receipts are needed;
- Payment is non-cash as required by current regulations.
The consequence of failing to withhold when required: advertising expenses risk being disallowed as deductible expenses, plus back-tax assessment and late-payment interest.
On input VAT credit: credit is only available with valid substitute-payment documents (where the business self-withholds and pays on behalf). Where a foreign supplier self-declares but its documents are not Vietnamese VAT invoices, input VAT credit conditions are not met.
A note on advertising via domestic intermediaries
Where a business runs ads through a domestic agency/intermediary in Vietnam (no direct contract with Google/Facebook): tax obligations arise with the domestic agency under ordinary rules — specific guidance for this scenario has not been fully verified, so businesses should check further before applying it.
Frequently asked questions
We pay Google Ads directly to Google Ireland — must we withhold FCT? No, if Google has registered and self-declares/pays tax in Vietnam (checkable on the tax authority’s portal) and the invoice/documents already include Vietnamese tax. This is the common case today.
What are the FCT rates for online advertising? Where withholding applies: VAT 5% + CIT 5% = 10% on taxable revenue (not on profit).
What about paying a small overseas ad platform we’ve never heard of? Check whether the supplier has registered for tax in Vietnam (look up the Department of Taxation portal). If not → the Vietnamese business must withhold 10%, declare and pay on its behalf under Article 30 of Circular 89/2026.
What happens if we fail to withhold when required? Advertising expenses risk disallowance for CIT purposes, plus FCT back-tax assessment and late-payment interest.
Sources cited
- Circular 20/2026/TT-BTC (12 March 2026) guiding CIT: Article 7 (FCT CIT rate: services 5%); effective 12 March 2026.
- Decree 320/2025/ND-CP (15 December 2025) guiding the 2025 CIT Law: Clause 3, Article 12 (FCT CIT rates); effective 15 December 2025.
- Circular 69/2025/TT-BTC (1 July 2025) guiding VAT: Article 9 (FCT VAT; Clause 6: percentage rates; services 5%); effective 1 July 2025.
- Circular 89/2026/TT-BTC (30 June 2026) guiding tax administration: Article 30 (FCT declaration), Article 31 (foreign suppliers’ direct declaration and payment); effective 1 July 2026.
- Decree 252/2026/ND-CP (30 June 2026): Clause 3, Article 43, Article 44 (withholding, payment on behalf); effective 1 July 2026.
- Official Letters 28807/CTHN-TTHT (2024), 27326/CTHN-TTHT (2022), Tax Official Letter 08/2026 (TikTok).
- Note: Circular 103/2014/TT-BTC and Circular 80/2021/TT-BTC (Articles 76–79) expired on 1 July 2026 — do not cite them as current bases.
Need a review of your tax obligations with foreign suppliers? The FLAT Law Firm team advises on foreign contractor tax, reviews digital-service contracts, and supports declaration and payment-on-behalf procedures. Contact us via our Contact page.
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- If a company faces back-tax assessment, will it also face criminal charges?
The information in this article is for general reference only, based on the law in force at the time of writing (14 October 2026), and is not legal advice for any specific matter.
Transparency notice: This article was produced by FLAT Law Firm’s AI content production system and has passed the AI Legal Council’s internal quality review; it has not been reviewed by a human lawyer.
