NEW FEATURES OF THE CORPORATE INCOME TAX LAW 2025

The National Assembly passed the Corporate Income Tax Law 2025 on June 14, 2025, which takes effect on October 01, 2025, and applies to the tax year 2025. Several new provisions are important for enterprises to consider, including:

1. Foreign enterprises are subject to tax on all income generated within Vietnam

The Corporate Income Tax Law 2025 expands its scope of stipulation to include foreign enterprises without permanent establishment in Vietnam that provide goods and services in Vietnam through e-commerce platforms and digital technology platforms (as stipulated in point d, clause 2, Article 2 of the Corporate Income Tax Law 2025). 

In addition, the Law also introduces a new principle for determining taxable income of foreign enterprises in Vietnam: income is deemed taxable if it originates from Vietnam, regardless of the place where business activities are conducted (as stipulated in clause 3, Article 3).

2. Tax rates based on revenue:

From 2025, instead of applying a single tax rate to all enterprises, the new Law classifies tax rates according to total revenue:

• 15%: Applies to enterprises with total revenue fewer VND 3 billion per year.
• 17%: Applies to enterprises with total revenue from VND 3 billion to fewer VND 50 billion.
• 20%: The general tax rate for the remaining enterprises. Some special cases will apply a tax rate of 25%-50%.

3. Expanding tax-exempt income:

Several new types of income have been added to the list of tax-exempt categories under Article 4 of the Corporate Income Tax Law 2025, including:

• Income from the initial transfer of carbon credits, from the initial transfer of green bonds after issuance; income from interest of green bonds.
• Direct support from the state budget and from the Government-established Investment Support Fund; compensation from the State as prescribed by law.

4. Deductible and non-deductible expenses when determining taxable income:

• Addition of deductible expenses include:

+ Addition of deductible expenses as a percentage of actual expenses incurred during the period related to the enterprise's research and development activities.

+ Addition of funding and expenses for scientific research, technological development, innovation, and digital transformation within the enterprise.

+ Addition of actual expenses incurred include: expenses for production and business activities that do not correspond to revenue generated during the period; expenses supporting the construction of public works that simultaneously serve the production and business activities of the enterprise; expenses related to reducing greenhouse gas emissions to achieve carbon neutrality and net zero, reducing environmental pollution, and are also related to the production and business activities of the enterprise; contributions to funds established by decision of the Prime Minister.

+ Input VAT that has not been fully deducted but not eligible for refund is included in deductible expenses.

• Non-deductible expenses: expenses exceeding the limit or expenses for activities that are not in accordance with specialized legal stipulations.

5. Industries eligible for preferential treatment

Based on Article 13 of the Corporate Income Tax Law, the industries eligible for incentive tax rates have undergone some changes as follows:

• Removal of some industries eligible for preferential treatment: 

• Production projects with a minimum investment capital of VND 6,000 billion;
• Investment projects in industrial parks.

• Addition of industries eligible for preferential treatment already specifically stipulated with corporate income tax preferential policies under current stipulations:

• Projects subject to special investment incentive and support as stipulated in clause 2, Article 20 of the 2020 Investment Law;
• Investment projects of technical facilities supporting small and medium-sized enterprises, small and medium-sized enterprises incubators; investment projects of co-working spaces for innovative start-ups, as defined under the Law on Provision of Assistance for Small and Medium-sized Enterprises.

We hereby have only quoted a list of some of new features of the Corporate Income Tax Law  2025 that the enterprises need to be aware of. Besides that, the Law also stipulates other stipulations regarding the tax period, tax calculation methods, and tax incentives for each specific case.

***Note:

-The translation is for reference only.