Scenario: your hospital contracts a Thai medical center to send doctors for consultation and surgical-technique transfer over three months — fee USD 120,000 (net). How is contractor tax computed, and what do foreign doctors need to practice in Vietnam?
Step 1 — Rates: medical services are VAT-exempt
Medical services’ special feature: diagnosis and treatment are not subject to VAT (check current VAT non-taxable rules). Consequence for contractor tax (2026 framework: CIT Law 67/2025, Decree 320/2025, Circular 20/2026):
- Contractor VAT: 0% — none arises.
- Contractor CIT: 5% on taxable revenue.
Step 2 — The numbers on USD 120,000 (net)
- VAT withheld: 120,000 × 0% = USD 0.
- CIT withheld: 120,000 × 5% = USD 6,000.
- Total withholding: USD 6,000 — the Thai medical center nets USD 114,000.
Step 3 — Medical practice conditions and treaty relief
Practicing medicine in Vietnam: foreign doctors directly treating patients in Vietnam need a practice license under the Law on Medical Examination and Treatment (in force — check the operative text), practicing within the licensed scope at the registered facility. Remote consultation (telemedicine) doesn’t trigger this but check telemedicine rules.
Tax treaty: Thailand has a treaty with Vietnam (1991). Without a Vietnamese PE, the medical center’s service fees may be CIT-exempt under Article 7 (Form 01/HTQT) — but monitor the 183-day threshold for the three-month doctor posting.
Filing and paying on behalf: the Vietnamese hospital is the party that deducts the tax in the payment run, prepares Form 01/NTNN (Circular 80/2021), and remits the tax to the budget on behalf of the foreign medical center.
Frequently asked questions
1. How much contractor tax on foreign medical services?
Only 5% CIT — medical services (diagnosis, treatment) are VAT-exempt, so no contractor VAT arises.
2. Withholding on USD 120,000?
USD 6,000 (120,000 × 5% CIT, VAT 0%) — the medical center nets USD 114,000.
3. What do foreign doctors need in Vietnam?
A practice license under the Law on Medical Examination and Treatment, practicing within scope at the registered facility.
4. Can a treaty exempt it?
CIT may be exempt under Article 7 without a PE (Form 01/HTQT) — watch the 183-day threshold for extended postings.
5. Who declares and pays?
The Vietnamese hospital takes care of it: deduction at payment, an on-behalf declaration on Form 01/NTNN, and payment on the foreign medical center’s behalf.
This article has been quality-reviewed by the FLAW AI Legal Council
