Key highlights of the 2025 Corporate Income Tax (CIT) law

On June 14, 2025, at the 9th Session of the XV National Assembly, the amended 2025 Corporate Income Tax Law was officially approved with 452/453 votes in favor. The Law takes effect from October 1, 2025, and applies to the 2025 CIT tax period. 

Below are key amendments based on the Draft Law submitted to the National Assembly: 

1. EXPANSION OF TAXPAYER SCOPE 

New tax obligations for foreign enterprises (FEs) operating in Vietnam through: 

• Branches, construction projects, agents, authorized representatives. 
• E-commerce/digital platforms supplying goods/services in Vietnam. 

Impact: FEs with e-commerce-derived income must declare and pay tax in Vietnam. 

2. CHANGES TO TAX INCENTIVE SECTORS AND ZONES 

Newly added sectors: 

• High-tech enterprises, high-tech agriculture enterprises. 
• Support facilities for SMEs (technical support, incubators, co-working spaces). 
• Press activities (including newspaper advertising). 

Excluded sectors: 

• Biotechnology; animal feed/poultry/aquaculture refining. 
• Projects with capital ≥ VND 6,000 billion; projects in high-tech zones not involving high-tech fields. 

Preferential zones: 

• Standard industrial parks no longer qualify for incentives. 
• Incentives maintained in: Economic zones, high-tech zones, high-tech agricultural zones, concentrated IT zones. 

3. NEW TAX RATES FOR SMALL AND MICRO ENTERPRISES 

Notes: 

• Does not apply to enterprises that are subsidiaries or affiliated entities where the linked enterprise does not satisfy the conditions for applying the tax rates specified in Clauses 2 and 3, Article 10 of the amended 2025 Corporate Income Tax Law. 
• Special rates: Oil & gas (25–50%), rare resources (40–50%). 

4. FLEXIBLE TAX EXEMPTION/REDUCTION POLICIES 

Maximum incentive: Tax exemption for 4 years + 50% tax reduction for 9 subsequent years. 

Expansion investments: 

• Additional income enjoys incentives equivalent to existing projects (no separate accounting required). 
• Conditions: ≥20% increase in fixed asset value or capacity versus pre-expansion. 

Exclusions: Incentives do not apply to expansions via M&A. 

Incentive accounting: Enterprises must separately account for income from incentivized vs. non-incentivized activities. If inseparable, incentivized income shall be determined by the ratio of incentivized revenue/costs to total revenue/costs.