New features of the Corporate Income Tax Law in 2025

Expanding the scope and adding more taxable income categories.

Accordingly, the Corporate Income Tax Law of 2025 will tax all income earned in Vietnam by foreign businesses, regardless of their business location. Specifically, point d, clause 2, article 2 of the Corporate Income Tax Law of 2025 expands the scope of entities subject to corporate income tax to include foreign businesses without a permanent establishment in Vietnam, including e-commerce businesses and businesses based on digital platforms, which must pay tax on taxable income generated in Vietnam.

Furthermore, Clause 3, Article 3 of the Corporate Income Tax Law 2025 adds a principle for determining taxable income of foreign enterprises in Vietnam: income received originating from Vietnam, regardless of the location where the business is conducted.

In addition, Article 3 of the Law has added many taxable income items subject to corporate income tax, including: the difference between income from fines and compensation for breach of economic contracts or bonuses for fulfilling contractual commitments; monetary or in-kind donations and gifts received; the difference resulting from the revaluation of assets according to the law for capital contribution, transfer during mergers, consolidations, divisions, separations, changes of ownership, or changes in business type; income from business cooperation contracts; income from production and business activities abroad; income of public non-profit organizations from leasing public assets; and other income, except for tax-exempt income.

Special offerreduce tax-free periodnew technology products, green manufacturing, and circular economy

According to Clause 4, Article 4 of the Corporate Income Tax Law 2025: Income from the execution of contracts for scientific research, technology development and innovation, and digital transformation; income from the sale of products made using new technologies applied for the first time in Vietnam; income from the sale of products produced during the trial production period, including controlled trial production as prescribed by law. Income under this clause is exempt from tax for a maximum of 3 years.

Previously, these income streams were tax-exempt for a maximum of 5 years.

SRevise the list of industries and occupations eligible for tax incentives.business merger

Specifically, Articles 12 and 13 of the 2025 Corporate Income Tax Law have adjusted the list of industries and professions eligible for corporate income tax incentives with many notable new points. Some prominent areas included in the list of those eligible for corporate income tax incentives are: Projects subject to special investment incentives and support as stipulated in Clause 2, Article 20 of the Investment Law. The Government shall specify the timeframe for disbursing the total registered investment capital of projects specified in this point; investment in technical facilities supporting small and medium-sized enterprises (SMEs) and SME incubators; investment in shared office spaces supporting innovative start-up SMEs as stipulated in the Law on Supporting Small and Medium-sized Enterprises; and the addition of the following industries eligible for incentives: Digital technology services, network information security, semiconductor chips, data centers, and artificial intelligence.

The law also simultaneously removes some sectors and professions that previously enjoyed preferential treatment, such as manufacturing projects with a minimum investment capital of 6,000 billion VND; and investment projects in industrial zones.

MExpand the scope of exemptionstHue corporate income

According to Clause 10, Article 4 of the Corporate Income Tax Law 2025, the scope of corporate income tax exemption is expanded to include: Income from the transfer of emission reduction certificates, the initial transfer of carbon credits after issuance by enterprises granted emission reduction certificates or carbon credits; income from interest on green bonds; and income from the initial transfer of green bonds after issuance.

BeerAdding certain expenses that are deductible when determining taxable income.

Article 9 of the Corporate Income Tax Law 2025 adds deductible expenses when determining taxable corporate income, specifically as follows:

Actual expenditure for seconded personnel participating in the management, operation, and control of credit institutions under special supervision and commercial banks that are compulsorily transferred according to the provisions of the Law on Credit Institutions;

Some expenses incurred by enterprises for production and business purposes do not correspond to the revenue generated during the period, as stipulated by the Government;

Some expenditures support the construction of public works, while also serving the production and business activities of enterprises;

Costs related to reducing greenhouse gas emissions to achieve carbon neutrality and net zero, reducing environmental pollution, and also related to the production and business activities of enterprises; some contributions to funds established by government decision.

Fixleveltax ratetcorporate income

In addition to the standard corporate income tax rate of 20% as stipulated in the old regulations, Article 10 of the 2025 Corporate Income Tax Law stipulates additional tax rates based on revenue:A tax rate of 15% applies to businesses with total annual revenue not exceeding 3 billion VND; a tax rate of 17% applies to businesses with total annual revenue from over 3 billion VND to not exceeding 50 billion VND.

The law also stipulates corporate income tax rates for certain specific business sectors, including: for oil and gas exploration and production activities, from 25% to 50%...