Our company recently plans to start entrepot trade business but isn't clear about the taxation involved. What taxes generally apply to entrepot trade income? Is it like domestic trade where we pay VAT and corporate income tax? How are the specific tax rates regulated? We hope knowledgeable friends could explain in detail so we can conduct proper tax planning in advance and avoid unnecessary issues.
Some people are interested in Vietnam's entrepot trade and ask how much money can be earned from engaging in this trade. They say they've heard that Vietnam's entrepot trade has many advantages, but they don't know the specific profit margin. The best answer points out that its profitability is affected by various factors such as the type of goods, trade scale, logistics costs, and policy environment. Products with high added value have relatively larger profits. Optimizing logistics, etc. can increase profits. The profit margins vary in different situations and need to be considered comprehensively.
The company is engaged in entrepot trade and has doubts about how to pay income tax. It wants to understand the methods for determining income and costs when calculating income tax for entrepot trade enterprises, as well as whether there are any special tax policies or preferential treatments. The best answer points out that the income from entrepot trade is the price difference of goods resale, the cost includes procurement and related expenses, the taxable income is calculated by subtracting costs and taxes from the income, and at the same time, attention should be paid to local tax policies.
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Professional consultant answers
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
Entrepot trade income typically involves corporate income tax. Income received by enterprises in monetary and non-monetary forms from various sources constitutes total income, which includes entrepot trade income, generally taxed at 25%, though qualifying small and low-profit enterprises may apply lower rates.
Regarding VAT, entrepot trade doesn't constitute VAT-taxable activity and thus isn't subject to VAT. Because VAT applies to domestic sales of goods or processing, repair and replacement services, sales of services, intangible assets, real estate, and imported goods. Entrepot trade goods aren't sold domestically or physically cross borders, hence no VAT applies.
Additionally, some regions may impose stamp duty, calculated as a percentage of sales contract value, typically at 0.03%. However, for specific tax matters, we recommend consulting local tax authorities for accurate information.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
Entrepot trade basically doesn't involve customs duties since goods don't physically enter the country's customs territory. But corporate income tax definitely needs consideration and should be declared and paid according to regulations.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
Stamp duty depends on local implementation standards—some jurisdictions may require payment based on relevant contracts. Remember to keep business documents like contracts for tax processing.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
VAT indeed doesn't apply, mainly corporate income tax matters, so proper cost accounting is needed to accurately calculate taxable income.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Entrepot trade tax treatment isn't difficult—focus on corporate income tax, clarify income and costs, and file according to regulations.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Some tax incentives might be worth exploring too, as the company might qualify to reduce tax burden.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
If stamp duty applies, remember to declare and pay promptly to avoid late fees.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
Tax policies may change, so regularly monitoring local tax authority updates benefits entrepot trade tax handling.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
Though VAT doesn't apply, enterprises should still maintain accurate business accounting to avoid tax risks.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
For international operations, also note relevant tax treaties that might offer benefits.