Vietnam has been added to the EU list of non\u2011cooperative jurisdictions for tax purposes (Annex I), following the Council\u2019s update of 17 February 2026.<\/p>\n
For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in some cases) more demanding payment execution will follow in the months ahead. The EU listing process is designed less to \u201cname and shame\u201d and more to encourage positive change through cooperation and dialogue, but once a jurisdiction is placed on Annex I, EU Member States implement \u201cdefensive measures\u201d that can materially affect tax treatment, withholding obligations, and audit intensity for Vietnam-linked transactions.<\/p>\n
The EU blacklist is a tax\u2011governance instrument: it does not prohibit EU businesses from importing goods from Vietnam or procuring Vietnamese services, and it does not alter Vietnam\u2019s domestic tax regime, corporate income tax rules, withholding tax framework, or investment policies.<\/p>\n
At the same time, the EU can deepen cooperation with Vietnam on the political and economic track while still applying tax\u2011governance pressure through listing mechanisms, so businesses should be prepared for a \u201cpartnership plus scrutiny\u201d environment rather than expecting the two to be perfectly aligned.<\/p>\n
In January 2026, the EU and Vietnam upgraded their relations to a Comprehensive Strategic Partnership, framed as a platform to strengthen cooperation across areas such as trade and investment, climate\/energy, sustainable development and digital transformation-a signal that the blacklisting is a technical compliance tool, not a diplomatic rupture.<\/p>\n
Vietnam\u2019s presence on the blacklist is striking when viewed in its broader political context. The EU blacklist was conceived after major tax-transparency scandals (the Panama Papers<\/em> and LuxLeaks<\/em>) to address jurisdictions that facilitate offshore structures or fail to meet information-exchange standards. In the Western imagination, \u201ctax haven\u201d connotes liberal microstates or offshore centres, yet Vietnam, governed by a Communist Party, now sits on the same list. This reflects the reality of Vietnam\u2019s hybrid economic model: politically socialist, but economically pragmatic since the \u0110\u1ed5i M\u1edbi reforms of the late 1980s, with selective tax incentives for special economic zones, high-tech investments and priority sectors that, in certain cases, can significantly reduce the effective tax burden for foreign investors. The EU\u2019s concern is not Vietnam\u2019s headline corporate tax rate but rather-at this stage-the absence of adequate exchange-of-information infrastructure, though the architecture of its preferential regimes has also attracted scrutiny in the past. The listing is a technical compliance issue, not an ideological one.\u00a0<\/strong><\/p>\n Vietnam has been subject to EU scrutiny since the very first iteration of the EU list in December 2017, when it was placed in Annex II (the \u201cgrey list\u201d) alongside jurisdictions that have committed to reform but are not yet fully compliant. In October 2025, Vietnam was removed from Annex II after fulfilling its commitments on country-by-country reporting (CbCR), and appeared, at that point, to be on the path to full compliance. However, shortly afterwards-in November 2025-the OECD Global Forum published its peer review and rated Vietnam \u201cNon-Compliant\u201d with respect to the standard on Exchange of Information on Request (EOIR), a separate compliance area from CbCR, finding that further reforms remained outstanding and that improvements in the CbCR exchange framework were not expected before 2027. This OECD finding directly triggered the February 2026 move to Annex I-an escalation from the grey list to the blacklist, bypassing any intervening period of full compliance.<\/p>\n The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), The three core listing criteria against which Vietnam was assessed are: Criterion 1 (Tax transparency), requiring compliance with AEOI and EOIR standards and membership of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam\u2019s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country\u2019s practical capacity and procedural framework for responding to foreign tax authorities\u2019 requests for information.; Criterion 2 (Fair taxation), requiring no harmful preferential tax regimes and adequate economic substance rules; and Criterion 3 (Anti-BEPS measures), requiring implementation of OECD anti-BEPS minimum standards including country-by-country reporting. Vietnam\u2019s shortfall was concentrated in Criterion 1, specifically the EOIR standard, which concerns the country\u2019s practical capacity and procedural framework for responding to foreign tax authorities\u2019 requests for information.<\/p>\n Vietnam\u2019s Ministry of Foreign Affairs responded publicly within days of the listing, defending the country\u2019s tax transparency record and stating that the government is implementing a national action plan to follow OECD recommendations and expand tax cooperation with partners including the EU. Vietnam expressed readiness to engage with European authorities to ensure more objective and comprehensive assessments, and to promote cooperation for shared development and prosperity. Practitioner commentary suggests a concrete roadmap is achievable: with legislative amendments (decrees and circulars on EOIR procedures), the establishment of a dedicated EOIR unit, publication of enforcement statistics, and active technical engagement with the EU Code of Conduct Group from now through September 2026, Vietnam could realistically target removal from Annex I at the next EU review cycle in October 2026, although this timeline is ambitious and delisting is by no means guaranteed. The key point for EU businesses is that, while the listing may be relatively short-lived if Vietnam acts decisively, companies should not delay compliance preparations in reliance on early delisting-a proportionate, risk-based response is more appropriate than a wholesale restructuring of Vietnam-linked supply chains.<\/p>\n Goods <\/strong>(imports) are often the most straightforward in substance terms because there is usually a clear chain of documents: purchase orders, shipping documents, customs import paperwork, delivery notes, inspection\/acceptance records and matching invoices.<\/p>\n The risk uplift for goods is typically not about whether the purchase is real, but whether the overall supply chain and pricing remain coherent under scrutiny-for example, whether margins and intercompany arrangements around the import flow make commercial sense and are consistently documented.<\/p>\n Services<\/strong> (outsourcing, consulting, IT development, marketing, support) tend to attract more questions because \u201cwhat was delivered\u201d is harder to evidence than a shipped product.<\/p>\n If your EU entity pays a Vietnamese provider for services, expect to need a well\u2011organised evidence pack: a clear scope of work, time records or milestones, deliverables (reports, code repositories, tickets), acceptance sign\u2011offs, and a pricing rationale that matches the level of skill and effort involved.<\/p>\n Royalties and IP-related payments<\/strong> (software licences, trademarks, know\u2011how, technology access) are particularly sensitive because they combine valuation complexity with cross\u2011border tax characterisation questions.<\/p>\n Expect pressure-testing of (i) who truly owns and controls the IP, (ii) the contract chain and sublicensing rights, (iii) how the royalty rate was set using benchmarking or comparable arrangements, and (iv) whether the payment is genuinely for IP rather than a disguised service fee.<\/p>\n Intragroup charges<\/strong> (management fees, shared services, cost recharges) are commonly the first area where tax authorities and counterparties ask for \u201cbenefit\u201d evidence and allocation logic.<\/p>\n Where Vietnam sits inside a group value chain, be ready to show why a charge exists, how it was calculated, how the recipient benefited, plus consistent intercompany agreements and transfer pricing support.<\/p>\n Financing and treasury flows (interest, guarantees, cash pooling, factoring, trade finance) trigger the most intensive technical review because they involve both tax outcomes and financial crime\/compliance sensitivities.<\/p>\n Even where the structure is legitimate, these flows are more likely to be escalated internally for enhanced review and may require more supporting documentation before execution.<\/p>\n Banks in the EU operate under a risk\u2011based approach to financial crime and compliance, and they may apply de-risking decisions, meaning they can choose to restrict or exit relationships or transaction types they view as exceeding their risk appetite or being operationally too costly to monitor. EU supervisory frameworks acknowledge that de-risking exists and call for proportionate, evidence-based risk assessments rather than indiscriminate blanket exclusions, but in practice banks have significant discretion.<\/p>\n For an EU company initiating a bank transfer to a Vietnamese counterparty, the following discretionary measures can arise in practice, even where the payment is entirely lawful and commercially routine.<\/p>\n A bank can pause execution and request additional documents before releasing funds, seeking comfort on the purpose and legitimacy of the transaction under its internal controls.<\/p>\n Typical requests include the underlying contract or statement of work, invoices, proof of delivery or performance, an explanation of business purpose, and information on the beneficiary\u2019s beneficial ownership or corporate structure.<\/p>\n A bank can route the payment through manual review queues rather than straight-through processing, particularly for first-time beneficiaries, unusually large amounts, or payments with vague narratives that do not clearly describe the purpose.<\/p>\n This creates operational knock-ons: late supplier settlement, goods held pending payment confirmation, or service suspension where the vendor operates on strict payment triggers.<\/p>\n A bank can impose internal conditions as part of its customer-specific risk controls-for example requiring richer payment details, stricter invoice descriptors, or pre-approval workflows for Vietnam-corridor payments.<\/p>\n A bank can decline to process specific transactions or decide to exit certain corridors, client types, or business models entirely as a risk-management choice. German financial institutions are described as applying enhanced due diligence, requiring full transparency of transaction purpose and ownership for Vietnam-linked payments.<\/p>\n Where a payment is declined, the practical solution is often to adjust the execution setup-alternative banking channel, revised documentation pack, or modified payment mechanics-while keeping the underlying commercial relationship intact.<\/p>\n EU companies are advised to develop a \u201cBanking Compliance Pack\u201d for Vietnam-corridor payments: a pre-assembled set of documents (contract, invoice, proof of delivery\/performance, business rationale memo, and beneficial ownership information) that can be submitted proactively or in response to bank queries within hours rather than days.<\/p>\n Beyond tax measures, being on the EU blacklist triggers non-tax consequences that affect Vietnam\u2019s economic relationship with the EU more broadly. EU investment programmes cannot channel funding through entities located in Vietnam, because using such an entity contradicts the core legal purpose of these funds, which are designed to promote good governance, transparency, and the fight against illicit financial flows. Affected funds include the European Fund for Sustainable Development (EFSD\/NDICI), which de-risks major investments in areas like energy and digital; the InvestEU programme (which replaced the former EFSI); and the External Lending Mandate (ELM), which provides EIB loans for major infrastructure outside the EU. In addition, the General Framework for STS securitisation imposes separate restrictions on the use of entities in blacklisted jurisdictions within securitisation structures. For Vietnamese entities and their EU partners working on donor-funded or ESG-driven projects, this can be a significant constraint, as subsidiaries and other businesses in Vietnam may be cut off from these sources of EU financing.<\/p>\n Cross-border arrangements involving Vietnam are now subject to heightened DAC6 scrutiny. In particular, Hallmark C.1(b)(ii) may be triggered where a deductible cross-border payment is made by an EU-based associated enterprise to a tax resident in Vietnam, subject to Member State-specific implementation of the main benefit test and other conditions. Large multinationals (consolidated revenue of EUR 750 million or more in each of the last two fiscal years) must also prepare and publicly disclose a Public Country-by-Country Report. Under the EU Public CbCR Directive, Vietnam activities must be reported separately-not aggregated as \u201cRest of the World\u201d-disclosing a list of all consolidated subsidiaries, description of activities, number of full-time equivalent employees, revenues (including related-party revenue), profit or loss before tax, income tax accrued and paid, and accumulated earnings. For FY 2025 and FY 2026, Vietnam information is already reportable separately by affected multinationals.<\/p>\n Belgium<\/strong>: Belgium applies non-deductibility of costs, CFC rules, and participation exemption limitations linked to both the EU list and certain domestic criteria. A critical Belgian-specific rule is the reporting obligation for payments made to entities in blacklisted jurisdictions where the aggregate of such payments exceeds EUR 100,000 in the taxable period; once this threshold is met, each such payment must be reported in the annual tax return, and any payment that is not reported, or that cannot be justified on specific grounds, is not deductible. Belgium follows a dynamic approach to the EU list, meaning EU list updates take effect automatically without a further domestic step. For Belgian payers, immediate practical priorities are: (i) identifying all Vietnam-linked payment streams above EUR 100,000, (ii) ensuring the reporting mechanism in the annual tax return is in place, and (iii) building the justification file for each reported payment.<\/p>\n France<\/strong>: France applies all four defensive measures-non-deductibility of costs, CFC rules, withholding tax, and participation exemption limitation-but via a national decree-based list that refers to the EU list while also applying additional French domestic criteria. France follows a static approach, updating its domestic non-cooperative state list through an annual Decree in the Official Journal, with tax consequences applying from the first day of the third month following publication. The last French update took place in April 2025, and at the time of writing (May 2026) no subsequent decree incorporating Vietnam has been published. A further update is expected imminently and will likely include Vietnam. Once Vietnam appears on the French list, key measures include: a 75% withholding tax on interest, royalties, dividends and service fees (counterevidence possible); denial of the participation exemption (counterevidence possible for jurisdictions meeting certain criteria); denial of deductibility of interest, royalties and service fees (counterevidence possible); and a stricter CFC rule under which the burden of proof is reversed and foreign withholding taxes cannot be credited against French CFC income. French payers should monitor the next French decree closely and prepare counterevidence files now so they are ready the moment the decree is published.<\/p>\n Germany<\/strong>: Germany applies all four defensive measures through the Tax Haven Defence Act (Steueroasen-Abwehrgesetz, StAbwG), linked to the EU list via a Tax Haven Defence Ordinance that is updated once per year, typically at year-end taking into account the October EU list update. The expected sequence for Vietnam is: December 2026-amendment to the Tax Haven Defence Ordinance to incorporate Vietnam; from 2027 (Year 1)-stricter CFC rules and extended withholding tax of 15% (plus a 5.5% solidarity surcharge) apply to income from financing relationships, insurance or reinsurance services, legal and advisory services, and trading of goods and services; from 2029 (Year 3)-denial of the participation exemption activates; from 2030 (Year 4)-denial of deductible business expenses activates. Importantly, Germany\u2019s extended withholding tax can override double tax treaties. The multi-year ramp-up means that immediate German impacts are CFC scrutiny and withholding tax friction on specific payment types, while the broader expense deduction denial will only bite from 2030 onwards-giving German payers time to prepare, but making early documentation investment worthwhile.<\/p>\n Italy<\/strong>: Italy uses the EU list for monitoring and deductibility purposes under Article 110 TUIR: costs connected with counterparties in Annex I jurisdictions are generally deductible up to \u201cnormal value,\u201d while amounts above normal value require evidence of an effective economic interest, and all such costs must be separately indicated in the annual income tax return (Modello REDDITI). Italy\u2019s framework is directly triggered by the EU list, meaning Vietnam\u2019s Annex I status is effective for Italian purposes from the publication of the Council conclusions in the EU Official Journal, without any further domestic implementing step being required.<\/p>\n For Italian payers, service costs, royalties, and intragroup charges to Vietnam are the most sensitive categories: robust documentation of deliverables, pricing and economic rationale is essential, and accounting teams need to ensure they can cleanly isolate Vietnam-linked costs in the year-end reporting workflow.<\/p>\n Malta<\/strong>: Malta follows a dynamic approach to the EU list, meaning Vietnam\u2019s Annex I status takes effect automatically in Malta\u2019s tax framework. Malta applies a limitation of the participation exemption on dividend income derived from a participating holding in a body of persons that has been resident in a jurisdiction on the EU list for a minimum period of three months during the year immediately preceding the year of assessment, subject to a counter-evidence exception based on \u201cpeople functions.\u201d Malta does not apply non-deductibility, CFC, or withholding tax defensive measures against EU-listed jurisdictions as primary tools, so the main Malta-specific concern for holding and investment structures is participation exemption eligibility and substance evidence. For Malta-based groups, the practical response is to keep board materials, contracts, and commercial rationale tightly aligned, and to prepare for more intensive counterparty due diligence (beneficial ownership, substance, and tax residency) from EU customers and financial institutions.<\/p>\n Netherlands<\/strong>: The Netherlands applies a 25.8% conditional withholding tax on interest, royalties, and (since 1 January 2024) dividends paid to related entities in EU-listed jurisdictions or low-tax jurisdictions, as well as CFC rules with counterevidence possible. The Netherlands follows a static approach: the list applicable for a tax year is based on the EU list as it stood at the end of the preceding year, using the October update as the reference. This means the Dutch 2027 Regulation will include Vietnam only if Vietnam remains on the EU list after the October 2026 review cycle. No withholding tax consequences arise for Dutch payers immediately in 2026 as a direct result of Vietnam\u2019s February 2026 listing, but the October 2026 review date is critical: if Vietnam remains listed, Dutch conditional withholding tax obligations will activate from 1 January 2027. Dutch payers with intragroup dividend, interest, and royalty flows to Vietnam should use the current window to restructure documentation and pricing support and to assess whether existing double tax treaty protections remain effective in light of the conditional WHT mechanics.<\/p>\n Spain<\/strong>: Spain does not mechanically mirror the EU list, but operates its own domestic list of non-cooperative jurisdictions, which is updated separately and can include or exclude jurisdictions differently from Annex I. Spain applies a static approach, with the list specified in law. The practical implication is that the Spanish domestic tax consequences of Vietnam\u2019s listing depend on whether and when Spain updates its domestic list to include Vietnam, rather than arising automatically from the EU Council\u2019s February 2026 decision. For Spain-based procurement and finance teams, do not assume a one-to-one mapping between EU-list status and Spanish domestic tax outcomes, but do treat Vietnam-linked transactions as higher-scrutiny items from an audit and counterparty due diligence perspective, and invest in cleaner contracting, invoice narratives, and performance evidence for services, royalties, and intragroup charges.<\/p>\n <\/p>\n Vietnam has been added to the EU list of non\u2011cooperative jurisdictions for tax purposes (Annex I), following the Council\u2019s update of 17 February 2026. For EU companies buying goods and services from Vietnam, this is not an outright ban on trade, but rather a signal that substantially heightened tax governance scrutiny, documentation expectations, and (in […]<\/p>\n","protected":false},"author":81,"featured_media":34582,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[204,202,259],"tags":[10607],"class_list":["post-34581","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate","category-distribution-agreements","category-tax","tag-vietnam"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/posts\/34581","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/users\/81"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/comments?post=34581"}],"version-history":[{"count":1,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/posts\/34581\/revisions"}],"predecessor-version":[{"id":34590,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/posts\/34581\/revisions\/34590"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/media\/34582"}],"wp:attachment":[{"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/media?parent=34581"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/categories?post=34581"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/tags?post=34581"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why Vietnam was added: the listing criteria and timeline<\/strong><\/h2>\n
Vietnam\u2019s response and the path to delisting<\/strong><\/h2>\n
How different payment types are affected in practice<\/strong><\/h2>\n
How European banks may respond (and what that looks like in practice)<\/strong><\/h2>\n
Non-tax defensive measures and EU funding implications<\/strong><\/h2>\n
DAC6 reporting and public country-by-country reporting<\/strong><\/h2>\n
Country notes (alphabetical)<\/strong><\/h2>\n
Practical next steps for EU companies<\/strong><\/h2>\n
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