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The new Corporate Income Tax (CIT) Law – Law No. 67/2025/QH15, effective from 1 October 2025 – marks an important shift in corporate tax policy. Below are the key points to note:

1. Effective date

• New rule: Law No. 67/2025/QH15 takes effect from 1 October 2025 and applies from the 2025 CIT period. The draft guiding decree will replace Decree 218/2013/ND-CP and take effect at the same time.

2. Taxpayers

• Old rule: enterprises established under Vietnamese law, foreign enterprises with or without a permanent establishment in Vietnam, cooperatives, public service units and other organizations with business income.
• New rule:
  • Additional enterprise form: "fund management companies" are added to the list.
  • Clarified taxpayers: "economic organizations established and operating under the Law on Credit Institutions" and "cooperatives and cooperative unions" are listed separately.
  • E-commerce and digital platforms: foreign enterprises without a permanent establishment in Vietnam pay tax on Vietnam-sourced income, including "enterprises doing e-commerce and business based on digital technology platforms". "E-commerce platforms and digital platforms" are added to the definition of permanent establishment. Organizations managing e-commerce exchanges and digital platforms are also covered by the withholding rules.

3. Taxable income

• Old rule: income from production and trading of goods and services and other income (capital transfers, real estate, ownership rights, asset leasing, deposit interest, exchange differences, etc.).
• New rule:
  • Oil and gas: taxable income from crude oil and natural gas extraction, determined per petroleum contract, is expressly included in income from production and business.
  • Other income:
    • Capital transfers: income directly related to share issuance (except debt shares), dividends (except debt shares), treasury share transactions and other receipts related to increases or decreases in owner's equity is excluded from taxable income.
    • Real estate transfers: income from real estate transfers by real estate businesses is excluded from other income (it is treated as income from production and business).
    • Exchange differences: more detailed rules on determining and treating exchange differences arising in the period and from year-end revaluation, including excluding differences from revaluing cash, deposits, cash in transit and foreign-currency receivables.
    • Reversal of provisions: expressly includes "reversal of construction warranty provisions".
    • Penalties, compensation, bonuses: clarifies the treatment where amounts received are higher or lower than amounts paid.
    • Gifts and sponsorships: non-cash items are valued at market price; income from handing over old land for relocation is taxed after deducting related costs.
    • Asset revaluation: more detailed rules on revaluation differences when assets are contributed as capital or transferred on division, split, merger, consolidation or conversion, with depreciation/amortization allowed on the revalued amount.
    • Business cooperation contracts (BCC): detailed rules where results are shared as revenue, products, pre-tax profit or after-tax profit.
    • Export/import duty refunds: clarifies whether they reduce expenses or are other income, depending on the year and their link to incentivized activities.
    • New capital contributions: any premium paid by a new member above the value of the contributed capital is not taxable income of the receiving enterprise if it belongs to the enterprise; if distributed to existing members, it is their income.

4. Tax-exempt income

• Old rule: income of cooperatives from cultivation, livestock and aquaculture; technical services directly serving agriculture; scientific research, technology development and trial/new-technology products (exempt for up to 1 year); activities employing disabled people, rehabilitated drug users and people with HIV; vocational training for special groups; income distributed from capital contributions and joint ventures already taxed; sponsorship for education, science, culture, charity, humanitarian and social purposes.
• New rule:
  • Agriculture, aquaculture and processing: exemption extended to income from crops, planted forests, livestock, aquaculture and processing of agricultural and aquatic products (including purchased or outsourced inputs and ordinary pre-processing) in especially difficult areas, subject to a minimum 30% ratio of agricultural/aquatic raw materials and the processed products not being subject to special consumption tax.
  • Cooperatives and cooperative unions: must meet the internal transaction ratio under Decree 113/2024/ND-CP to qualify.
  • Agricultural technical services: adds flood drainage, salinity prevention, acid sulphate soil washing and freshwater retention.
  • Science, innovation and digital transformation: exemption of up to 03 years for income from contracts for scientific research, technology development, innovation and digital transformation, and from sales of products made with new technology applied for the first time or trial products (under control), subject to certification.
  • Special employees: detailed certification requirements for employees who are disabled, rehabilitated drug users or living with HIV/AIDS.
  • Vocational training: detailed conditions for training institutions and how exempt income is determined when there are several types of trainees.
  • Sponsorship and funds:
    • Sponsorship for science, technology, innovation and digital transformation with no related-party relationship is exempt.
    • "Investment support funds" are added to the list of funds whose income from State-assigned tasks is exempt.
    • Direct support from the State budget and State compensation are clarified.
  • Equitization and restructuring of State-owned enterprises: revaluation gains on assets for equitization/restructuring are exempt, and the converted enterprise may depreciate/amortize on the revalued amount.
  • Green credits: new exemption for income from the first transfer of emission reduction certificates and carbon credits, interest on green bonds and the first transfer of green bonds.
  • Socialized activities: at least 25% of taxable income must be retained undistributed to qualify for exemption, and socialized establishments are clarified.
  • Public service units: exemption for income from basic and essential public services, services funded by the State, and services in especially difficult areas.

5. Tax base and calculation

• Old rule: taxable income from different business activities could be offset against losses from each other, except income from transfers of real estate, investment projects and mineral exploration/extraction. Losses could be carried forward continuously for up to 5 years.
• New rule:
  • Loss offsetting:
    • Losses from transfers of real estate, investment projects and rights to participate in investment projects may not be offset against income from production and business that enjoys tax incentives.
    • Losses from transfers of mineral exploration and extraction projects must be determined separately and may only be offset against taxable income from that activity.
    • Losses must be carried forward "in full and continuously" for 5 years. Losses between quarters of the same financial year may be offset. Rules are added for cases where the tax authority determines a different loss.
    • Specific rules on carrying forward losses on conversion, merger, consolidation, division, split, dissolution and bankruptcy, including allocating losses to the resulting enterprises in proportion to owner's equity.
  • Revenue:
    • Timing: more detailed rules for sales of goods (transfer of ownership) and services (completion or partial completion).
    • Asset leasing, golf course business and multi-year prepaid services: revenue may be allocated over time or recognized at once, depending on the enterprise's accounting choice and incentive conditions.
    • Specific activities: clearer rules on taxable revenue for credit, securities, derivatives, transport, construction, electricity and water, insurance, insurance brokerage, BCC contracts, oil and gas, and prize-winning games.
  • Deductible and non-deductible expenses: this is the area with the most changes and detail.
    • General conditions: adds "additional deductible expenses calculated as a percentage of actual expenses incurred in the tax period for the enterprise's research and development activities".
    • Research and development (R&D): up to 200% of actual R&D expenses may be deducted.
    • Employee expenses:
      • Welfare expenses: still capped at "01 month of actual average salary", with clarification of the actual salary fund and the specific items counted as welfare.
      • Voluntary pension and life insurance: capped at VND 3 million per person per month, and eligibility and benefit levels must be set out in labour contracts, collective labour agreements or financial/bonus regulations. Not deductible if mandatory insurance obligations are not fully met.
      • Travel and business trips: invoices/documents, decisions assigning the business trip and internal rules allowing payment by personal cards may support deduction.
    • Depreciation of fixed assets:
      • Purpose of use: more assets serving employees may be depreciated (rest houses, canteens, medical facilities, training, libraries, nurseries, sports areas, clean water tanks, parking, shuttle vehicles, staff housing, vocational training facilities).
      • Idle assets: fixed assets temporarily idle (under 9 or 12 months depending on the case) may still be depreciated if they later return to use in production and business.
      • Land use rights: indefinite land use rights may not be depreciated; land use rights with a fixed term are amortized into deductible expenses.
      • Contributed/transferred assets: the receiving enterprise may depreciate/amortize on the revalued amount (except land use rights that cannot be depreciated).
    • Interest expenses:
      • Unpaid charter capital: more detailed rules on the non-deductible portion of interest corresponding to unpaid charter capital.
      • Related-party transactions: interest is capped for enterprises with related-party transactions under the Government's transfer pricing rules.
    • Administrative penalties: now expressly include "late tax payment interest".
    • VAT and PIT: deducted or refunded input VAT, VAT paid under the credit method, input VAT on cars above the prescribed limit, CIT, and PIT (except where the enterprise pays on behalf of employees under the contract) are not deductible.
    • Additional non-deductible expenses:
      • Management fees for casinos and electronic prize games: the portion exceeding 4% of revenue.
      • Purchases of goods/services of VND 5 million or more: must have non-cash payment documents (reduced from VND 20 million).
      • Capital contributed as goodwill or brand use rights: not deductible.
      • Exchange losses from year-end revaluation of cash, deposits and foreign-currency receivables: not deductible (except losses from revaluing payables).
      • Expenses not corresponding to taxable revenue: generally not deductible, with some specific exceptions.

6. Tax rates

• Old rule: standard rate of 22% (20% from 1 January 2016). Enterprises with total annual revenue not exceeding VND 20 billion applied 20% (17% from 1 January 2016 for people's credit funds and microfinance institutions). Oil, gas and rare resources: 32–50%.
• New rule:
  • Standard rate: 20%.
  • Revenue-based rates:
    • 15% for enterprises with total annual revenue not exceeding VND 3 billion.
    • 17% for enterprises with total annual revenue above VND 3 billion and not exceeding VND 50 billion.
    • Total revenue for this purpose includes financial income and other income of the immediately preceding tax period, with specific rules for newly established enterprises or those operating less than 12 months.
    • The 15% and 17% rates do not apply to subsidiaries or related companies where the related enterprise does not meet the conditions.
  • Oil, gas and rare resources: oil and gas prospecting, exploration and extraction from 25% to 50%; other rare resources from 32% to 50% (50% or 40% depending on location).

7. Tax incentives

• Old rule: preferential rates (10%, 20%) and exemption/reduction periods (up to 4 years' exemption and 50% reduction for up to 9 years) for new investment projects in incentivized sectors/areas, high-tech enterprises, agricultural cooperatives, etc.
• New rule:
  • Additional incentivized sectors: application of strategic technologies, key digital technology products/services, semiconductor chip design and manufacturing, AI data centres, car manufacturing/assembly, and technical facilities/co-working spaces supporting innovative SME startups.
  • Incentivized areas: especially difficult/difficult areas do not include industrial parks and clusters. "Concentrated digital technology zones" are added.
  • Special incentive projects: incentives added for "investment projects eligible for special investment incentives and support under clause 2, Article 20 of the Investment Law".
  • Preferential rates: specifies when 10% for 15 years, 10% for the whole life, 15%, and 17% for 10 years apply according to the new incentivized sectors and areas.
  • Extended incentive periods: specific rules for large-scale, high-tech and special technical infrastructure projects.
  • Exemption and reduction periods: 4 years' exemption and 50% reduction for the following 9 years for projects enjoying the 10% rate (Art. 17.1); 2 years' exemption and 50% reduction for the following 4 years for projects enjoying the 17% rate (Art. 17.4).
  • Start of the incentive period: from the first year with revenue or taxable income; or from the year of certification for high-tech, science and technology or supporting industry enterprises/projects (if certified after revenue arises).
  • Expansion investment:
    • If the existing project still has incentive time remaining, additional income from expansion need not be accounted for separately and enjoys the remaining incentives.
    • If the project's incentives have expired, additional income from expansion qualifies for new exemption/reduction (as for a new project) but not for preferential rates. Additional income must be accounted for separately or allocated by asset ratio.
    • Specific criteria define an expansion (increase in historical cost of at least VND 40 billion/VND 20 billion, or 20% increase in the share of historical cost, or 20% increase in design capacity).
  • Other reductions:
    • Enterprises converted from household businesses: CIT exemption for 02 consecutive years from the first year of taxable income (or from the 4th year if there is no taxable income in the first 3 years of revenue), provided the household business operated for at least 12 months and the conversion is not an abuse of the law.
    • Public service units: 50% reduction on income from technology transfer and public services in difficult areas.
• Conditions for incentives:
  • Separate accounting: if incentivized and non-incentivized income cannot be accounted for separately, it is allocated by the ratio of revenue or deductible expenses of the incentivized activity to the enterprise's total revenue or total deductible expenses.
  • Choice of incentive: if the same income qualifies for several incentives, the enterprise may choose the most favourable and must apply it consistently for the remaining incentive period.
  • Switching incentives: if the enterprise switches to a more favourable incentive under other criteria, the time already used under the old incentive is deducted.
  • Project location and income: income from products made by a project in an incentivized area qualifies even if the products are sold outside that area. Trading/service projects in incentivized areas qualify only for income arising in that area.
  • Changes in law: projects not incentivized under the old law but incentivized under the new law may apply the new incentives for the remaining period from the 2025 tax period.
  • Income from liquidation/agricultural by-products: treated as incentivized income.
  • New investment projects: detailed criteria and cases not treated as new projects for incentive purposes (e.g. division, split, merger, change of owner inheriting assets or business location).