From January 01, 10, Law on Corporate Income Tax (CIT) 2025 No. 67/2025/QH15 officially effective, replacing and consolidating many previous regulations. One of the important contents that business owners and accountants need to understand is Article 4 – Tax-exempt incomeUnderstanding and correctly applying this regulation not only helps businesses optimize tax costs but also ensures compliance with the law.
I. Income from agricultural, forestry, fishery and salt production activities
According to the Article 4 Corporate Income Tax Law 2025, exempt from corporate income tax the following income:
- Clause 1:
- Operating income fishing;
- Enterprise income from production of crops, forestry products, livestock, aquaculture, agricultural and aquatic product processing (including cases of purchasing agricultural and aquatic products for processing) in areas with particularly difficult socio-economic conditions;
- Income of cooperatives and cooperative unions from production of crops, planted forests, livestock, aquaculture, processing of agricultural and aquatic products (including cases of purchasing agricultural and aquatic products for processing), and salt production.
- Clause 2: Income of cooperatives and cooperative unions operating in the fields of agriculture, forestry, fishery, and salt production in areas with difficult socio-economic conditions or in areas with especially difficult socio-economic conditions.
At first glance, the provisions for cooperatives and cooperative unions in Clause 1 and Clause 2 seem similar. But in essence, these two provisions are different in the following points:
- Clause 1: Based on specific production activities:
- Tax exemption for cooperatives/cooperative unions for specific activities listed;
- No restrictions on operating area.
- Article 2: Based on field and area of operation:
- Tax exemption for cooperatives/cooperative unions operating in the fields of agriculture, forestry, fishery, and salt production in general;
- Right meet the conditions of the operating area in difficult or especially difficult areas.
According to the Circular 96 / 2015 / TT-BTCIncome from products and goods processed from agricultural and aquatic products that are eligible for tax incentives must simultaneously satisfy the following conditions:
- The ratio of the value of raw materials such as agricultural and aquatic products to the cost of production of goods and products (production cost of goods and products) is from 30% or more;
- Products and goods from agricultural and aquatic product processing are not subject to special consumption tax, except in cases decided by the Prime Minister upon proposal of the Ministry of Finance.
II. Income from technical services directly serving agriculture
Clause 3 Article 4 tax exemption for income from technical services directly serving agriculture.
The Law does not specifically guide the services in this Clause. However, according to Circular 78 / 2014 / TT-BTC, services may include:
- Irrigation, plowing, dredging intra-field canals;
- Pest and disease control for crops and livestock;
- Harvesting agricultural products.
III. Income from scientific research, technology development and transfer, innovation and digital transformation
According to the Clause 4 Article 4, enterprises are exempted from corporate income tax for the following incomes during the period max 03 years:
- Contracts for scientific research, technology development, innovation, digital transformation;
- Selling products made from new technology applied for the first time in Vietnam;
- Sell test products during the pilot production phase.
According to the Article 3 Circular 151 / 2014 / TT-BTC, the income exempted from tax under this Clause must satisfy the following conditions:
- Have a certificate of registration for scientific research activities (for revenue from contract performance);
- Certified by the competent State science management agency.
💡 The new point compared to the previous old regulations is that the scope of application is expanded to include contracts. innovation and digital transformation, and at the same time standardize the tax exemption period applicable to income from products made from new technology applied for the first time. 03 years instead of 05 years as before.
Also, at Clause 13 Article 4Income from technology transfer in priority fields for organizations and individuals in areas with particularly difficult socio-economic conditions is also considered for corporate income tax exemption.
IV. Income from using specific labor
Clause 5 Article 4 Regulations: Exemption from corporate income tax on income from production and business activities of goods and services of enterprises that meet the following conditions:
- 30% or more of the average annual workforce are people with disabilities, people after drug rehabilitation, or people infected with HIV/AIDS;
- Has an average number of employees per year of 20 or more.
⚠️ Note: Not applicable to businesses operating in the financial and real estate sectors.
Follow the instructions at Circular 78 / 2014 / TT-BTCEnterprises with tax-exempt income as prescribed in this Clause must satisfy the following conditions:
- When employing disabled workers (including war invalids and sick soldiers), there must be confirmation from a competent health authority about the number of disabled workers;
- When employing a drug addict after rehabilitation, there must be a certificate of completion of rehabilitation from a rehabilitation facility or confirmation from a relevant competent authority;
- When employing HIV-infected workers, there must be confirmation from a competent health authority about the number of HIV-infected workers.
V. Income from vocational training and education activities for specific subjects
According to the Clause 6 Article 4, enterprises are exempt from tax on income from vocational training activities specifically for:
- Ethnic minorities;
- Người khuyết tật;
- Children in special circumstances;
- Social evils
At Clause 5 Article 4 Decree 218 / 2013 / ND-CPIn case the vocational training facility also has other subjects, the tax-exempt income is determined according to the ratio between the number of students in the above categories and the total number of students of the facility.
Income from vocational training activities is exempt from tax and must meet the following conditions:
- Vocational training facilities are established and operate in accordance with the provisions of guiding documents on vocational training;
- There is a list of students who are ethnic minorities, people with disabilities, children in special circumstances, and social evils.
VI. Income from capital contribution, share purchase, joint venture and domestic association activities
According to the Clause 7 Article 4:
- Income distributed to investors from capital contribution, share purchase, joint venture, and association activities with domestic enterprises – after such enterprises have paid corporate income tax according to regulations – will be exempt from corporate income tax on the investor side;
- Applicable to cases where enterprises receive capital contributions, issue shares, joint ventures, and associations that are enjoying corporate income tax incentives.
💡 This rule helps avoid double taxation of the same domestic profit and encourage capital contribution and association within the economy.
VII. Income from sponsorship, support and compensation
According to the Clause 8 Article 4 tax exemption for the following items:
- Sponsorship received for educational, cultural, artistic, charitable, humanitarian and other social activities in Vietnam;
- Funding received from non-affiliated enterprises (domestic or foreign) for scientific research, technology development and innovation, digital transformation;
- Direct support from the state budget, from the Investment Support Fund established by the Government;
- State compensation according to law.
⚠️ Note: If an enterprise uses the funding for purposes other than those specified in this Clause, the enterprise will be subject to tax collection and penalties in accordance with the law.
VIII. Income from the transfer of certified emission reductions (CERs)
Certified Emission Reductions (CERs) are certificates issued by the International Executive Board of the Clean Development Mechanism (CDM) for CDM projects. CERs are a special type of commodity that can be exchanged or traded between countries or businesses in need.
According to the Clause 10 Article 4, the income from the transfer of CERs, carbon credits, and green bonds for the first time of enterprises granted these credits is exempt from corporate income tax. Subsequent transfers will be taxed according to regulations.
IX. Undistributed income
According to the Clause 12 Article 4, corporate income tax exemption for undistributed income of socialized enterprises in the fields of education - training, health care and other socialized fields. This undistributed income is only subject to tax exemption if:
- Used to reinvest and develop that business;
- Meet the minimum ratio prescribed by the Government.
⚠️ Note:
In case the undivided income is left over and the enterprise divides or uses it for the wrong purpose or invests in expanding other business lines or activities not in the above fields, it will be subject to corporate income tax collection at the tax rate at the time of division or misuse and will be subject to penalties for tax law violations according to regulations.
X. Income of public service units from providing public service
According to the Clause 14 Article 4, corporate income tax exemption for income of public service units from providing public service services including:
- Basic and essential public career services in the list of public career services using the state budget issued by competent authorities;
- Public career services that the State must support and ensure operating costs because service provision costs are not fully included in service prices;
- Public career services in areas with especially difficult socio-economic conditions.
The Corporate Income Tax Law 2025 No. 67/2025/QH15 clearly stipulates tax-exempt income, creating a "preferential corridor" with clear application criteria. To take advantage of and effectively promote these incentives, businesses need to pay attention to accounting for income, fully and systematically storing records, invoices, and documents for tax declaration and payment. Approaching mindset “Understand correctly – Do correctly” is a solid foundation to help businesses optimize operating costs, limit legal risks and protect the legitimate rights of businesses.