On June 14, 2025, the National Assembly passed the Corporate Income Tax (CIT) Law 2025, effective October 1, 2025. The law introduces important changes in tax policies, investment incentives, and obligations, particularly in the areas of digital economy, green growth, and global integration. 𝐒𝐨𝐦𝐞 𝐚𝐛𝐛𝐫𝐞𝐯𝐢𝐚𝐭𝐢𝐨𝐧𝐬 𝐚𝐫𝐞 𝐮𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐚𝐫𝐭𝐢𝐜𝐥𝐞, 𝐚𝐧𝐝 𝐏𝐡𝐚𝐦 𝐃𝐨 𝐋𝐚𝐰 𝐰𝐢𝐥𝐥 𝐞𝐱𝐩𝐥𝐚𝐢𝐧 𝐭𝐡𝐞𝐦 𝐚𝐭 𝐭𝐡𝐞 𝐞𝐧𝐝 𝐟𝐨𝐫 𝐫𝐞𝐚𝐝𝐞𝐫𝐬’ 𝐜𝐨𝐧𝐯𝐞𝐧𝐢𝐞𝐧𝐜𝐞.
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𝐈. 𝐄𝐱𝐩𝐚𝐧𝐬𝐢𝐨𝐧 𝐨𝐟 𝐓𝐚𝐱𝐚𝐛𝐥𝐞 𝐄𝐧𝐭𝐢𝐭𝐢𝐞𝐬 – 𝐅𝐨𝐫𝐞𝐢𝐠𝐧 𝐄𝐧𝐭𝐞𝐫𝐩𝐫𝐢𝐬𝐞𝐬 𝐖𝐢𝐭𝐡𝐨𝐮𝐭 𝐚 𝐏𝐡𝐲𝐬𝐢𝐜𝐚𝐥 𝐏𝐫𝐞𝐬𝐞𝐧𝐜𝐞 𝐢𝐧 𝐕𝐢𝐞𝐭𝐧𝐚𝐦
According to Point d, Clause 2, Article 2 of the CIT Law 2025, the scope of taxpayers is extended. From October 1, 2025, foreign enterprises supplying goods or services in Vietnam through e-commerce or digital platforms are subject to tax on income generated in Vietnam.
Clause 3, Article 3 clarifies that taxable income for foreign enterprises is determined as income originating from Vietnam, regardless of where the business activities occur. This aims to ensure fairness between domestic and foreign enterprises in line with digital trade trends.
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𝐈𝐈. 𝐒𝐡𝐨𝐫𝐭𝐞𝐧𝐞𝐝 𝐓𝐚𝐱 𝐄𝐱𝐞𝐦𝐩𝐭𝐢𝐨𝐧 𝐏𝐞𝐫𝐢𝐨𝐝 𝐟𝐨𝐫 𝐍𝐞𝐰 𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐬
According to Clause 4, Article 4 of the CIT Law 2025:
* Income from scientific research, technology development, innovation, and digital transformation contracts is tax-exempt for up to 3 years.
* Income from selling products made from new technology applied for the first time in Vietnam is tax-exempt for up to 3 years from the date revenue is generated (previously 5 years).
* Income from selling trial production products, including controlled pilot production, is also tax-exempt for up to 3 years.
From October 1, 2025, when the CIT Law takes effect, the tax exemption period for products from new technology applied for the first time in Vietnam will officially decrease from 5 years to 3 years, ensuring tax policy fairness and encouraging innovation.
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𝐈𝐈𝐈. 𝐄𝐱𝐩𝐚𝐧𝐬𝐢𝐨𝐧 𝐨𝐟 𝐂𝐈𝐓-𝐄𝐱𝐞𝐦𝐩𝐭 𝐈𝐧𝐜𝐨𝐦𝐞
Clause 10, Article 4 adds new CIT-exempt income categories:
* Income from the transfer of emission reduction certificates and the first-time transfer of carbon credits after issuance.
* Income from interest on green bonds and the first-time transfer of green bonds after issuance.
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𝐈𝐕. 𝐎𝐟𝐟𝐬𝐞𝐭𝐭𝐢𝐧𝐠 𝐋𝐨𝐬𝐬𝐞𝐬 𝐟𝐫𝐨𝐦 𝐑𝐞𝐚𝐥 𝐄𝐬𝐭𝐚𝐭𝐞 𝐓𝐫𝐚𝐧𝐬𝐟𝐞𝐫𝐬
According to Clause 3, Article 7 of the CIT Law 2025, the rules on loss offsetting have been significantly changed:
* New regulation: Businesses may offset production and business losses against taxable income from other activities, except income from real estate transfers, investment project transfers, or project participation rights under tax incentives.
* Previous regulation: Losses from real estate or project transfers could offset profits from production activities.
Income from mineral exploration and processing must be separately declared and cannot offset other business profits or losses.
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𝐕. 𝐀𝐝𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐃𝐞𝐝𝐮𝐜𝐭𝐢𝐛𝐥𝐞 𝐄𝐱𝐩𝐞𝐧𝐬𝐞𝐬
According to Article 9 of the CIT Law 2025, new deductible expenses are added for CIT calculation, including:
– Expenses for seconded personnel managing credit institutions under special control.
– Certain business expenses not directly linked to generated revenue.
– Expenses supporting construction of public facilities connected to business.
– Costs for greenhouse gas reduction, carbon neutrality, and pollution reduction.
– Contributions to funds decided by the Prime Minister.
These provisions expand legitimate deductible costs, promoting sustainable business practices.
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𝐕𝐈. 𝐔𝐧𝐜𝐫𝐞𝐝𝐢𝐭𝐞𝐝 𝐈𝐧𝐩𝐮𝐭 𝐕𝐀𝐓 𝐚𝐬 𝐃𝐞𝐝𝐮𝐜𝐭𝐢𝐛𝐥𝐞 𝐄𝐱𝐩𝐞𝐧𝐬𝐞𝐬
Input VAT paid under the credit method is generally not deductible, except where directly related to production/business, cannot be credited fully, and is not refundable. Once input VAT is treated as a deductible expense, it cannot be credited against output VAT.
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𝐕𝐈𝐈. 𝐑𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 𝐑𝐚𝐭𝐞
The standard CIT rate is reduced from 22% to 20%. Preferential rates are also introduced:
-> 15%: Enterprises with annual revenue not exceeding VND 3 billion.
-> 17%: Enterprises with annual revenue between VND 3 billion and VND 50 billion.
-> 25% – 50%: For oil and gas extraction, depending on reserves and conditions.
Compared with the previous law, the general tax rate is reduced and more clearly tiered by business size, supporting small and medium-sized enterprises (SMEs).
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𝐕𝐈𝐈𝐈. 𝐂𝐡𝐚𝐧𝐠𝐞𝐬 𝐭𝐨 𝐓𝐚𝐱-𝐈𝐧𝐜𝐞𝐧𝐭𝐢𝐯𝐢𝐳𝐞𝐝 𝐒𝐞𝐜𝐭𝐨𝐫𝐬
Some sectors lose incentives, such as projects with investment capital of VND 6,000 billion and projects in industrial zones under old rules. New incentive sectors are added:
* Projects eligible for special investment incentives under Clause 2, Article 20 of the Investment Law 2020.
* Projects in technical infrastructure, incubators, and coworking spaces supporting startups and SMEs.
These changes aim to align tax incentives with economic development goals and better support SMEs.
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𝐈𝐗. 𝐇𝐢𝐠𝐡𝐞𝐫 𝐏𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐭𝐢𝐚𝐥 𝐓𝐚𝐱 𝐑𝐚𝐭𝐞 𝐟𝐨𝐫 𝐀𝐮𝐭𝐨𝐦𝐨𝐛𝐢𝐥𝐞 𝐌𝐚𝐧𝐮𝐟𝐚𝐜𝐭𝐮𝐫𝐢𝐧𝐠 𝐚𝐧𝐝 𝐀𝐬𝐬𝐞𝐦𝐛𝐥𝐲
The preferential CIT rate for new automobile manufacturing and assembly projects increases from 10% to 17% for 10 years (Article 12). This adjustment supports technological advancement, product quality, and investor confidence while balancing state revenues.
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𝐗. 𝐏𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐭𝐢𝐚𝐥 𝟏𝟕% 𝐓𝐚𝐱 𝐑𝐚𝐭𝐞 𝐟𝐨𝐫 𝟏𝟎 𝐘𝐞𝐚𝐫𝐬 𝐟𝐨𝐫 𝐏𝐫𝐨𝐣𝐞𝐜𝐭𝐬 𝐒𝐮𝐩𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐒𝐌𝐄𝐬
Clause 4, Article 13 of the CIT Law 2025 adds beneficiaries of a 17% preferential tax rate for 10 years, including:
* Investment projects in technical infrastructure and incubators for SMEs.
* Investment projects in coworking spaces supporting innovative startups under the Law on Support for SMEs.
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Explanation of Abbreviations
* CIT: Corporate Income Tax
* VAT: Value-Added Tax
* CSPL: Legal Basis – clauses, articles, or legal documents cited as reference
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