Tax Authorities' Perspectives on the Application of CIT Incentives for FDI Enterprises
The 2025 Law on Corporate Income Tax (CIT), Resolution No. 198/2025/QH15, and their guiding documents have introduced various tax incentive policies aimed at supporting investment activities and enterprise development.
During the implementation of these policies, particularly concerning Foreign Direct Investment (FDI) enterprises, some tax authorities have issued differing guidelines regarding the determination of conditions and the scope of applying CIT incentives.
To assist enterprises in monitoring the perspectives of tax authorities, Crowe Vietnam has summarized several notable official documents concerning the application of CIT incentives for FDI enterprises as follows:
| Tax Authority / Document | Guidance Content | Rationale |
| Ho Chi Minh City Tax Department: Official Letter No. 4128/TPHCM-QLDN3 dated April 21, 2026 | Foreign Direct Investment (FDI) enterprises, despite meeting the criteria for small and medium-sized enterprises (SMEs), are not eligible for the 03-year CIT exemption under Resolution 198/2025/QH15 and Decree 20/2026/ND-CP. | Based on the objectives of Resolution No. 198/2025/QH15 regarding private sector economic development, thereby asserting that the tax exemption policy does not apply to FDI enterprises. |
| Tax Department: Official Letter No. 3896/CT-CS dated June 11, 2026 | Affirming that FDI enterprises remain eligible for the 03-year CIT exemption if they are established under Vietnamese law, obtain their first-time Enterprise Registration Certificate, meet the SME criteria, and do not fall under the exclusion cases stipulated in Point b, Clause 3, Article 7 of Decree 20/2026/ND-CP. | Based on Resolution No. 198/2025/QH15, Decree No. 20/2026/ND-CP, the Law on Support for SMEs, and the Law on Enterprises. These regulations do not differentiate between domestic enterprises and foreign-invested enterprises when determining eligible subjects for incentives. |
Crowe Vietnam's Perspective
From the aforementioned documents, it is evident that during the initial implementation phase of Resolution No. 198/2025/QH15 and Decree No. 20/2026/ND-CP, there have been varying interpretations regarding the application of CIT incentive policies for Foreign Direct Investment (FDI) enterprises.
Notably, Official Letter No. 3896/CT-CS dated June 11, 2026, issued by the Tax Department, clarified that the foreign investment capital factor is not a basis for excluding an enterprise from the 03-year CIT exemption under Resolution No. 198/2025/QH15. Accordingly, FDI enterprises established under Vietnamese law can still enjoy these incentives provided they fully meet the prescribed conditions.
Concurrently, several previous documents from local tax authorities indicate a tendency to strictly scrutinize FDI enterprises when applying tax incentive policies. Therefore, enterprises should not solely focus on the foreign ownership factor but must comprehensively review the conditions regarding SMEs, newly established status, and the exclusion cases under Article 7 of Decree No. 20/2026/ND-CP.
>>> Download Official Letter No. 4128/TPHCM-QLDN3
>>> Download Official Letter No. 3896/CT-CS