Vietnam new corporate income tax law: key points to know

The Vietnam new corporate income tax law was passed by the National Assembly on 14 June 2025 and takes effect on 1 October 2025. It keeps the standard rate at 20 percent. It changes who gets tax breaks, how small firms are taxed, and which costs a company can deduct. If your firm runs in Vietnam, read this before the new rules begin.

Sources: Vietnam Briefing, "2025 CIT Law: New Rates Established and Industrial Park Incentive Removed", 25 June 2025 (vietnam-briefing.com).

Dates and the standard rate

The National Assembly approved the amended law on 14 June 2025. The law takes effect on 1 October 2025. The headline rate does not change. The standard corporate income tax rate stays at 20 percent.

That 20 percent rate is the same one companies paid under the old law. What changes is who gets a lower rate and who gets a tax break, as the next sections show.

Sources: Vietnam Briefing, 25 June 2025.

New rates for small firms

Small firms get the biggest change. The law sets two reduced rates based on yearly revenue.

• Revenue up to VND 3 billion: 15 percent.
• Revenue above VND 3 billion and below VND 50 billion: 17 percent.

There is a catch. The reduced rates do not apply if a subsidiary or affiliated company does not meet the required conditions. A small firm that is part of a larger group should check this first. Ask your tax adviser to test your group structure before you plan around the lower rate.

Sources: Vietnam Briefing, 25 June 2025.

Incentives move from place to priority

The old system gave breaks mainly by location. A company in an industrial park could get a two year tax exemption, then a four year 50 percent cut. Under the new law, location alone no longer qualifies. New or expanded projects in industrial parks do not get that package automatically.

The new focus is on priority industries. These include high-tech manufacturing, semiconductors, renewable energy, green hydrogen and products that support global supply chains. Qualifying income in these areas may get a 10 percent rate for up to 15 years. New projects are also expected to support the country's digital transformation agenda.

Sources: Vietnam Briefing, 25 June 2025.

What happens to projects you already have

The new rules apply to projects licensed on or after 1 October 2025. Existing incentives continue for the period set in your certificate or approval. You keep what you were promised.

You also have options. An existing project that meets the new criteria can switch to the new system for the rest of its period. If you expand a project, you can use the remaining original incentives. If they have run out, new investment in the same place or sector may qualify at the standard rate. You must keep separate accounts for the new investment.

Sources: Vietnam Briefing, 25 June 2025.

Deductions and records

The law expands the list of costs a company can deduct, with clearer descriptions. It also expands the list of costs that cannot be deducted. Every deduction must be backed by proper invoices and non-cash payment records. Cash-only paper trails are a risk.

Some new cases are worth noting. Spending to cut emissions, save energy or manage waste is deductible even if it does not directly create taxable revenue. Research and development spending and infrastructure co-financing get greater deductibility, and a later decree will set the percentages. Private money spent on public infrastructure in industrial zones, such as roads or drainage, is also deductible.

Sources: Vietnam Briefing, 25 June 2025.

Other changes for foreign and digital business

E-commerce platforms and digital service providers fall within the scope of the law. Foreign companies that use these platforms in Vietnam are treated as having a permanent establishment. Overseas income is taxed when it is earned, not when it is brought home. Credits for foreign tax paid remain available.

When a company transfers capital, including through an indirect sale, the seller is taxed at a deemed rate on gross proceeds. The seller stays taxable even when the sale makes a loss.

A short checklist for the months ahead:

• Work out your revenue band and your group structure.
• List your incentives and note when each one ends.
• Check that all invoices and payment records meet the new standard.
• Watch for the decree that sets the R&D percentages.

This is general information, not tax advice. Talk to a qualified adviser about your own case.

Sources: Vietnam Briefing, 25 June 2025.

Sources

• Vietnam Briefing, "2025 CIT Law: New Rates Established and Industrial Park Incentive Removed", 25 June 2025: https://www.vietnam-briefing.com/news/2025-cit-law-manufacturing-companies-in-industrial-parks.html/