NEW POINTS IN THE LAW ON CORPORATE INCOME TAX 2025

The Law on Corporate Income Tax No. 67/2025/QH15 was promulgated by the National Assembly on June 14, 2025, with many changes compared to the current law. We summarize some notable new points of the Law on CIT 2025 as follows:

1. Expanding the scope of regulation for foreign enterprises providing goods and services in Vietnam through e-commerce platforms and digital technology platforms

According to Point d, Clause 2, Article 2, foreign enterprises that do not have permanent establishments in Vietnam, including e-commerce businesses and businesses based on digital platforms, must pay tax on taxable income arising in Vietnam.

Supplementing the principle of determining taxable income of foreign enterprises in Vietnam as incomes received originating from Vietnam, regardless of the location of conducting business (according to Clause 3, Article 3).

2. Regarding tax incentives

2.1. Reduction of the tax exemption period for incomes from the sale of new technology products

According to Clause 4, Article 4 of the Law on Corporate Income Tax 2025: Income from the performance of contracts on scientific research, technology development and innovation, digital transformation; income from the sale of products made from new technologies applied for the first time in Vietnam; income from the sale of products produced on a trial basis during the trial production period includes and controlled trial production in accordance with law. Income under this Clause shall be exempt from tax for a maximum of 03 years.

Previously, the above incomes were exempt from tax for a maximum of 05 years.

2.2. Expansion of tax-exempt subjects

Some new types of income will be added to the tax exemption in Clause 10, Article 4 of the Law on Corporate Income Tax 2025, including:

• Incomes from the transfer of emission reduction certificates or carbon credits for the first time after issuance of enterprises granted emission reduction certificates and carbon credits; income from green bond interest;
• Income from the transfer of green bonds for the first time after issuance.

2.3. Cases eligible for the tax rate of 15% or 17% Pursuant to Article 10 of the Law on Corporate Income Tax 2025:

The CIT rate is 20%, the tax rate of 15% applies to enterprises with a turnover of not more than VND 3 billion, 17% for enterprises with a turnover of over VND 3 billion to VND 50 billion.

However, this regulation does not apply to enterprises that are subsidiaries or companies with associated relations where the enterprises in the associated relationship are not enterprises that meet the conditions for applying preferential tax rates. (Pursuant to Clause 4, Article 18 Law on Corporate Income Tax 2025).

2.4. Addition of high-tech agricultural zones to areas eligible for tax incentives

2.5. Projects to support small and medium-sized enterprises with tax incentives of 17% for 10 years

Clause 4, Article 13 of the Law on Corporate Income Tax 2025 supplements the subjects entitled to the preferential tax rate of 17% for 10 years as follows:

• Business investment projects on technical establishments to support small and medium-sized enterprises, small and medium-sized enterprise incubators;
• Business investment projects on co-working areas to support innovative start-ups of small and medium-sized enterprises in accordance with the Law on Support for Small and Medium Enterprises.

3. Losses from real estate transfer shall be offset against taxable incomes

According to Article 7 of the Law on Corporate Income Tax 2025, if an enterprise has many production and business activities in the tax period, the taxable income from production and business activities is the total income of all production and business activities. In case of losses in production and business activities, the losses shall be offset against the taxable incomes of production and business activities with incomes selected by enterprises (except for incomes from real estate transfers, investment project transfers, transfer of the right to participate in non-clearing investment projects with incomes from production and business activities that are enjoying tax incentives). The remaining income after clearing shall be subject to the corporate income tax rate of production and business activities that still have income.

4. Amendments to regulations on deductible expenses

Compared to the previous provisions, Article 9 of the Law on Corporate Income Tax 2025 amends a number of regulations on deductible expenses when determining taxable income as follows:

4.1. Addition of a number of deductible expenses when determining taxable incomes

– Actual expenses for persons seconded to participate in the administration, administration and control of credit institutions under special control and commercial banks that are compulsorily transferred in accordance with the Law on Credit Institutions;

– A number of expenses in service of production and business of the enterprise but not corresponding to the revenue generated in the period as prescribed by the Government;

– A number of expenses to support the construction of public works, and at the same time serve the production and business activities of enterprises;

– Expenses related to the reduction of greenhouse gas emissions in order to neutralize carbon and net zero, reduce environmental pollution, and at the same time related to the production and business activities of enterprises;

– A number of contributions to funds established under the Prime Minister’s decision and the Government’s regulations.

4.2. The input VAT amount which has not been fully deducted but is not refundable shall be included in the deductible expenses

The value-added tax (VAT) paid by the deduction method shall not be included in the deductible expenses, excluding the VAT portion of input goods and services directly related to the production and business of the enterprise which has not been fully deducted but is not subject to tax refund.

The input VAT amount, when it has been included in the deductible expenses, shall not be deducted from the initial VAT amount

The new Law on Corporate Income Tax takes effect from October 1, 2025 and applies to the corporate income tax period 2025 onwards.