Partner
Attorney at Law (Germany)
Important changes in Vietnam´s new Corporate Income Tax Law
- From News from ASEAN - Q1 2026
- Expansion of CIT taxpayer base
- Preferential tax rates for SMES (small and medium-sized enterprises)
- CIT incentives
On 14 June 2025, the National Assembly of Vietnam issued Law No. 67/2025/QH15 on Corporate Income Tax (CIT), replacing the existing CIT Law. The new law will take effect from 1 October 2025.
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Below please see some of the key updates:
Expansion of CIT taxpayer base
Foreign enterprises without a permanent establishment (PE) in Vietnam, including those engaged in e-commerce or digital platform-based business activities, are now required to pay CIT on taxable income arising in Vietnam.
Preferential tax rates for small and medium-sized enterprises (SMEs)
New preferential CIT rates are introduced for small and medium-sized enterprises:
- 15 % for annual revenue up to VND 3 billion; and
- 17 % for annual revenue from VND 3 billion to VND 50 billion.
These reduced rates do not apply to SMEs affiliated with larger enterprises that are not themselves eligible for SMEs. Deemed CIT rates apply to small enterprises, cooperatives with identifiable revenue but unclear costs.
CIT Incentives
Removed incentive: Manufacturing projects with a minimum investment capital of VND 6,000 billion.
Expanded eligible incentives:
- Projects eligible for special investment incentives under Law on Investment 2020 includes:
- New (or expanded) investment projects establishing innovation centers or R&D centers with total investment ≥ VND 3,000 billion and disbursed ≥ VND 1,000 billion within 3 years from the date of investment registration or approval; includes National Innovation Centers established by the Prime Minister’s decision; and
- Investment projects in specially encouraged sectors with total investment ≥ VND 30,000 billion and disbursed ≥ VND 10,000 billion within 3 years from the date of investment registration or approval.
- Expansion of an investment project occurs when an enterprise expands its scale, enhances capacity, modernizes technology, reduces pollution or improves the project’s environmental performance.
R&D tax deductability
- Addition to R&D deductible expenses: Expenditures on scientific research, technological development and innovation and digital transformation may be deductible expenses for CIT purposes.
- Increased fund appropriation rate: The maximum appropriation rate to the science and technology development fund is increased from 10 % to 20 % of an enterprise’s annual taxable income.