Vietnamese businesses spend billions of VND each year on Facebook and Google ads — yet few realize these payments may trigger an obligation to withhold and remit foreign contractor tax. From 1 July 2026, the legal basis for this obligation has changed comprehensively.
This article analyzes the tax duties on cross-border advertising spend under current law.
1. Why Facebook and Google ads involve contractor tax
Meta (Facebook) and Google are foreign organizations providing advertising services to customers in Vietnam and earning Vietnam-sourced income. Under the foreign contractor tax mechanism, where the foreign organization does not pay tax directly in Vietnam, the Vietnamese payer must withhold, declare and remit VAT and CIT on its behalf.
From 1 July 2026, Circular 103/2014/TT-BTC has expired, replaced by Circular 89/2026/TT-BTC (Article 30: filing per payment or monthly, finalization upon contract completion). The tax base now refers to current VAT law (48/2024/QH15) and CIT law (67/2025/QH15).
2. Two layers of tax duty to distinguish
- Layer 1 — the Vietnamese party’s duty (withhold and remit): the Vietnamese business paying Meta/Google withholds contractor tax and files and remits it to the Vietnamese tax authority;
- Layer 2 — the foreign digital platform’s duty: under Article 13.2 of the Law on Tax Administration 108/2025/QH15, foreign digital platform providers (Facebook, Google, TikTok, etc.) must directly or through authorization register, declare and pay tax in Vietnam.
These two layers are independent: the platform’s own tax registration in Vietnam does not automatically remove the Vietnamese party’s withholding duty, absent another clear legal basis.
3. How to withhold and remit
- Filing: per each advertising payment to Meta/Google, or monthly;
- Calculation: tax payable = taxable revenue × the rate (%) under current VAT and CIT law; convert foreign currency at the exchange rate prescribed by tax administration law;
- Documentation: keep withholding/remittance vouchers; international payment proof (company credit card, bank transfer) to book the expense;
- Finalization: upon termination of the service relationship/agreement with the provider.
4. Risks of not withholding
- Disallowed advertising expense: spending without proper withholding documentation risks being non-deductible for CIT;
- Recovery and penalties: if discovered, the tax authority may recover the tax that should have been withheld, charge late-payment interest and impose administrative penalties;
- No input VAT credit: VAT paid on behalf is creditable only with lawful vouchers and cashless-payment conditions met.
5. Notes for household and individual businesses running ads
Under Article 13.3 of Law 108/2025/QH15: for business on e-commerce or other digital platforms with online ordering and payment functions, the platform operator (domestic or foreign) must withhold, declare and remit tax on behalf of household and individual businesses. Where the platform lacks both functions, the household/individual business self-declares and self-pays.
6. Frequently asked questions
Q: Is paying for Google ads with the director’s personal credit card a problem?
A: Two risks — difficulty proving it is the company’s expense (vouchers in a personal name) and failure to meet the cashless-payment-from-company-account condition. Pay from the company’s account or card.
Q: If Google has an office or tax registration in Vietnam, must we still withhold?
A: The withholding duty depends on whether the foreign provider pays tax directly in Vietnam on that income. The first check is the public list of foreign suppliers registered for tax in Vietnam on the tax authority’s e-portal for foreign suppliers: under official guidance (Official Letter 28807/CTHN-TTHT of 2024 and notices of the General Department of Taxation), Google, Facebook (Meta) and TikTok have registered, declared and paid tax directly in Vietnam — in such cases the Vietnamese business does not have to withhold contractor tax for them. For unregistered suppliers, the Vietnamese party must still withhold and remit under Article 30 of Circular 89/2026/TT-BTC.
Q: Are Facebook ad costs CIT-deductible?
A: Yes, if they are actual expenses related to production or business, supported by lawful invoices and vouchers, and meeting the cashless-payment condition (VND 5 million and above under Decree 320/2025/ND-CP).
Running cross-border ads and need to review your tax duties? Contact us for advice.
This article was prepared by the FLAW AI Legal Council. The content is pending QA Council review before submission for approval; it is for reference only and does not replace legal advice for your specific situation.