Money Flow from Steam to Vietnam

Releasing a game on Steam is a milestone that every independent developer looks forward to, and Legion Team is no exception. While preparing CSCD: Vietnam Mobile Police, we tried to understand how money travels from the player's pocket to the developer's account through the many stages of Steam, taxes and fees.

This article is a general, reference-level summary, shared with fellow devs who have the same concern. We hope it gives you a clearer picture before you decide on the direction for your own product.

1. Money flow diagram

Below is a simplified diagram of the stages the money passes through. Take a look at it before reading the detailed explanation.

2. Detailed walkthrough

2.1 Stage 1: The player buys the game

• The player pays the Gross price (also called the tax-inclusive price) shown directly on the Steam store page in each country
• For example, the gross price is 20 (an illustrative figure; the currency could be USD, VND, EUR, etc.)
• Depending on the country the buyer lives in, this gross price differs, for example:
  • A buyer in France (EU), where VAT is 20% -> At checkout the buyer pays the full 20 (EUR). Of this, 16 EUR becomes the net price of the game and 4 EUR is tax.
  • A buyer in a US state where sales tax is 8% -> At checkout the buyer pays 20 (USD) plus 8% of 20 USD, which is 1.6 USD. The total to pay is 21.6 USD
• As a result, the amount Steam actually collects also differs (in the next step)

2.2 Stage 2: Steam

• Steam separates the tax of the country where the buyer lives (country A) at the moment of checkout (as in the Stage 1 examples) and remits it to country A's tax authority
• What remains is the net price of the game, which is further adjusted by factors such as Refunds, Chargebacks, regional discounts, vouchers, etc. -> The final figure is called "adjusted gross revenue" (AGR)

2.3 Stage 3: Steam share

• Steam keeps 30% of the adjusted gross revenue.
• The remaining 70% belongs to the Dev and continues through the stages below.

2.4 Stage 4: US tax

• This stage only applies to transactions that generate revenue from US territory
• The tax authority withholds up to 30% of revenue sourced from the US. This figure can be reduced by various means, based on tax treaties and the W-8BEN/W-8BEN-E form

The double taxation treaty between the US and Vietnam had not yet been ratified at the time this article was published, so US tax is applied at the maximum rate of 30%

2.5 Stage 5: The banking system

Valve issues a payment order (SWIFT WIRE) from Valve's bank, and the order passes through the banking system:

Intermediary banks (intermediary/correspondent)

• May deduct fixed fees (lifting/correspondent fees)
• Fees are deducted directly from the amount in transit

Receiving bank in Vietnam

• Charges an inbound wire fee
• Charges a fee for converting USD/EUR → VND at the bank's exchange rate (if the receiving account in Vietnam is a USD account, this fee does not apply)
• The money at this point is called net cash. If you are an individual, net cash goes to your personal account; if you are a company, net cash goes to the company account.

2.6 Stage 6: The Vietnamese tax authority

Individual

• Personal income tax (PIT) applies
• If the income is treated as "royalties/software": a tax rate of about 5% on the relevant income
• Usually calculated on revenue, with few cost deductions

Company

• The company's accounting department will
  • Record the foreign revenue from Steam
  • Record the game production costs (staff, assets, infrastructure, marketing...)
  • Determine the Taxable profit = Revenue − Costs
  • Consider a Foreign Tax Credit for the US withholding already paid
• Then
  • Corporate income tax (CIT) applies
  • The standard rate is 20% of profit; it may be 15–17% for SMEs depending on revenue and incentives under the current CIT law

A few notes on calculating tax

• Calculated on gross income: Vietnamese tax is calculated on the income share the Dev receives, before US tax is deducted. US tax is an amount withheld from that same income; it does not reduce the income itself.
• Tax already paid in the US: may be considered for deduction (Foreign Tax Credit) to avoid double taxation, up to the amount of Vietnamese tax due on that income. Supporting documents are required, and the tax authority must accept them.
• Bank fees and conversion fees: companies can usually record them as expenses, while individuals usually cannot deduct them.

The points above may vary from case to case, so please confirm with your accountant.

At this point, the amount you receive has passed through every stage that can charge a fee, and you have fulfilled your tax obligations to the state.

3. A worked example

To make this easier to picture, let's walk through a concrete example.

The figures below are purely illustrative and follow the stages above. They are not tax advice — in reality they depend on each individual's or company's circumstances.

3.1 Assumptions

• The game has a gross price of 20 USD and sells 10,000 copies
• All buyers are from the North American market
• The average sales tax in this region is 8%
• Assume no refunds, chargebacks or discounts
• All revenue is US-sourced, and since there is no tax treaty, 30% is withheld
• Total bank fees (intermediary banks + inbound wire) for the whole transfer are 100 USD
• The receiving account in Vietnam can be USD (no conversion fee) or VND (the bank converts with a 0.5% conversion fee on the amount received, reflected in the exchange-rate spread); all VND amounts below are calculated at their USD-equivalent value
• Vietnamese tax is calculated on the Dev's revenue share (70%), before US tax is deducted. Foreign Tax Credit is not applied, and bank fees/conversion fees are not deducted as expenses when calculating tax, to keep the example simple (see the explanation in Stage 6)
• If it is a company: game production costs are recorded as 40,000 USD

3.2 From the player to money arriving in Vietnam (common to all cases)

3.3 USD or VND receiving account?

3.4 Case 1: The Dev is an individual

3.5 Case 2: The Dev is a Vietnamese company

3.6 Looking back at the results

For every copy of the game priced at 20 USD, the Dev takes home about 9.09 USD (individual, USD account) or 7.79 USD (company, USD account), which is less than half the selling price. The biggest "losses" come from Steam's share (60,000 USD) and US tax (42,000 USD), two items the Dev can hardly influence in this example.

Choosing a VND account instead of a USD account costs an additional 489.5 USD in conversion fees (about 0.05 USD per copy), so the final amount is correspondingly lower in both cases. This figure is small in the example, but it grows with higher revenue or if the bank's exchange-rate spread is wider than 0.5%. If you need VND for immediate spending, compare exchange rates across banks before choosing where to receive the money.

A company is taxed on profit, so the result depends heavily on the costs it can record (the higher the costs, the lower the CIT), and it can be reduced further through Foreign Tax Credit or tax incentives. On the other hand, the individual's amount is higher in this example, but it comes with other trade-offs in terms of legal entity, IP ownership and the ability to sign contracts. Talk to an accountant or a lawyer before making a decision.

We hope this article helps you!