SUMMARY OF ENTERPRISE INCOME TAX
Chapter I – General Provisions
This chapter includes:
• Defining the scope of regulation of the law: taxpayers, taxable income, tax exempt income, tax bases, tax calculation methods, and corporate income tax incentives.
• Clearly specifying taxpayers, including Vietnamese enterprises, foreign enterprises with or without a permanent establishment in Vietnam, cooperatives, public service units, and other organizations with taxable income.
• Clarifying the concept of a permanent establishment of foreign enterprises (branches, representative offices, factories, agents, digital platforms, etc.).
• Defining taxable income, other income, and the principle for determining income arising in Vietnam.
• Providing tax exempt income categories (agriculture, science and technology, vocational education, donations, income from state assigned tasks, etc.).
• Defining the tax period based on the calendar year or fiscal year.
Article 4. Tax Exempt Income
1. Income from offshore fishing activities; income of enterprises from producing crop products, planted forests, livestock, aquaculture, processing agricultural and aquatic products (including cases of purchasing agricultural and aquatic products for processing) in areas with extremely difficult socio economic conditions; income of cooperatives and unions of cooperatives from producing crop products, planted forests, livestock, aquaculture, processing agricultural and aquatic products (including cases of purchasing agricultural and aquatic products for processing), and salt production.
2. Income of cooperatives and unions of cooperatives operating in agriculture, forestry, fishery, and salt production in areas with difficult or extremely difficult socio economic conditions.
3. Income from providing technical services directly serving agriculture.
4. Income from performing scientific research contracts, technology development and innovation, digital transformation; income from selling products created from new technologies applied for the first time in Vietnam; income from selling products from trial production during the trial production period, including controlled trial production as prescribed by law. Income under this clause is exempt for a maximum of 03 years.
5. Income from production and business activities of enterprises where at least 30% of the average number of employees in the year are persons with disabilities, rehabilitated drug addicts, or persons living with HIV/AIDS, and the enterprise has at least 20 employees on average in the year, excluding enterprises operating in finance or real estate.
6. Income from vocational education and training activities exclusively for ethnic minorities, persons with disabilities, children in special circumstances, and social protection beneficiaries.
7. Income distributed from capital contribution, share purchase, joint ventures, and associations with domestic enterprises after corporate income tax has been paid under this Law, including cases where the capital recipient, share issuer, or joint venture partner enjoys corporate income tax incentives.
8. Donations received for education, culture, arts, charity, humanitarian, and other social activities in Vietnam; donations received from non related enterprises, organizations, and individuals inside and outside Vietnam for scientific research, technology development and innovation, digital transformation; direct support from the state budget and from the Investment Support Fund established by the Government; compensation from the State as prescribed by law. If donations under this clause are used for improper purposes, tax shall be collected retrospectively and penalties imposed.
9. Differences arising from revaluation of assets under the law for equitization or restructuring of enterprises wholly owned by the State.
10. Income from transferring emission reduction certificates, transferring carbon credits for the first time after issuance by enterprises granted such certificates; income from interest on green bonds; income from transferring green bonds for the first time after issuance.
11. Income (including bank deposit interest, government bond interest, treasury bill interest) from performing state assigned tasks in the following cases: a) Income of the Vietnam Development Bank from development investment credit and export credit activities; b) Income of the Vietnam Bank for Social Policies from credit activities for the poor and other policy beneficiaries; c) Income of the Asset Management Company of Vietnamese credit institutions; d) Income from revenue generating activities of state financial funds and other non profit state organizations as prescribed or decided by the Government or the Prime Minister.
12. Undistributed income of socialized establishments in education, training, healthcare, and other socialized fields retained for reinvestment meeting the minimum ratio prescribed by the Government; undistributed common funds and shared assets of cooperatives and unions of cooperatives established and operating under the Law on Cooperatives.
13. Income from transferring technology in prioritized technology transfer fields to organizations and individuals in areas with extremely difficult socio economic conditions.
14. Income of public service units from providing public services, including: a) Basic and essential public services on the list of public services funded by the state budget; b) Public services for which the State must support and ensure operating funds due to insufficient cost recovery in service prices; c) Public services provided in areas with extremely difficult socio economic conditions.
15. The Government shall detail this Article.
Chapter II – Tax Bases and Tax Calculation Methods
This chapter includes:
• Tax bases consist of taxable income and tax rates.
• Taxable income = Taxable revenue – (Tax exempt income + Losses carried forward).
• Taxable revenue = Revenue – Deductible expenses + Other income.
• Rules on offsetting losses between business activities, except real estate and mineral activities.
• Revenue includes all proceeds from sales and service provision, whether collected or not.
• Deductible expenses must meet conditions: related to business operations, supported by valid documents, and not falling under non deductible expense categories.
• Tax rates:
• Standard rate: 20%
• Revenue ≤ 3 billion VND: 15%
• Revenue 3–50 billion VND: 17%
• Oil and gas: 25–50%
• Rare minerals: 40–50%
• Tax payable = Taxable income × Tax rate.
Chapter III – Corporate income tax incentives
This chapter includes:
1. Preferential tax rates
• Preferential tax rates of 10%, 15%, and 17% for sectors, industries, or geographical areas that receive special investment encouragement.
• Applicable to:
– High tech projects, scientific research, innovation.
– Education and training, healthcare, environmental protection.
– Projects located in areas with difficult or extremely difficult socio economic conditions.
– Production of products on the prioritized list.
2. Tax exemption and reduction periods
• Tax exemption for 2–4 years, followed by a 50% tax reduction for 4–9 years, depending on the type of project.
• The exemption/reduction period begins from the first year the enterprise generates taxable income.
3. Conditions for enjoying incentives
• Projects must meet criteria regarding:
• Investment capital scale.
• Technology level.
• Investment location.
• Labor ratio.
• Nature of the industry or sector. • Enterprises must separately account for income eligible for tax incentives.
4. Principles for applying incentives
• Tax incentives are not applicable to:
• Real estate transfer activities.
• Mineral extraction activities.
• Projects that fail to fulfill investment commitments.
• If an enterprise has multiple business activities, it must separate income eligible for incentives.
5. Preventing abuse of incentives
• Tax authorities have the right to inspect and verify eligibility for incentives.
• If the enterprise fails to meet the conditions, tax will be retrospectively collected and penalties imposed.
Chapter IV – Implementation provision
1. This Law takes effect on October 1, 2025, and applies from the 2025 corporate income tax period.
2. The Corporate Income Tax Law No. 14/2008/QH12, as amended and supplemented by Law No. 32/2013/QH13, Law No. 71/2014/QH13, Law No. 61/2020/QH14, Law No. 12/2022/QH15, and Law No. 15/2023/QH15, ceases to be effective from the effective date of this Law.