August 01, 10, Law on Corporate Income Tax (CIT) 2025 officially come into effect, bringing many preferential policies to the business community. Correctly identifying incentive mechanisms, tax exemptions and reductions is not only a mandatory legal requirement for all businesses, but also helps to proactively optimize costs and manage risks. This article systematizes the important regulations in Articles 12, 13, 14, 15; helping to determine the scope of application by industry/profession - location, preferential time frame, and principles applied to each specific type of investment project.
I. Principles and applicable subjects
1. Principles
According to the Article 12 Chapter III Corporate Income Tax Law 2025, corporate income tax incentives are implemented according to 2 criteria: Industry, profession incentives and location endow.
In case another Law stipulates corporate income tax incentives that are inconsistent with this Law, the provisions of this Law shall apply, except for the Law on the Capital and resolutions of the National Assembly on special and specific mechanisms and policies.
When simultaneously eligible for multiple tax incentives for the same income, a business is entitled to: choose the most favorable offer.
The Government prescribes the application of tax incentives in the following cases:
- Cases of applying tax incentives according to local criteria;
- Tax incentives in the fields of agriculture, forestry, fishery and salt industry;
- In case the first tax period generates revenue or income from an enterprise's investment project (including new investment projects, expansion investments, high-tech enterprises, high-tech agricultural enterprises, science and technology enterprises) and the time of generating revenue/income enjoying tax incentives is less than 12 months. (*)
💡 Understand correctly
(*) Many projects come into operation in the middle of the year, the first tax period is often not a full 12 months. From this reality, it is necessary to determine the correct time frame for applying tax incentives according to the relevant Articles and Clauses so that businesses are not disadvantaged in terms of the incentive period.
Enterprises newly established or having investment projects from mergers, consolidations, divisions, separations, ownership conversions or business type conversions shall inherit tax obligations (including penalties, if any) and corporate income tax incentives (including uncapped losses) of the enterprises/projects before carrying out the above transactions if they continue to meet the conditions for corporate income tax incentives and loss transfer according to the provisions of law.
2. Subjects of application
a) Preferential industries and occupations
Industries and occupations with preferential corporate income tax as prescribed in Clause 2 Article 12 include:
|
Point |
Group of industries and occupations with preferential corporate income tax |
|
1 |
Application of high technology, venture investment for high technology development in the list of high technologies prioritized for investment and development according to the provisions of the Law on High Technology; application of strategic technology according to the provisions of law; incubation of high technology, incubation of high technology enterprises; investment in construction and business of high technology incubation facilities, incubation of high technology enterprises. |
|
2 |
Manufacturing software products; manufacturing network information security products and providing network information security services ensuring conditions according to regulations of law on network information security; manufacturing products, providing key digital technology services, manufacturing electronic equipment according to regulations of law on digital technology industry; researching and developing, designing, manufacturing, packaging, testing semiconductor chip products; building artificial intelligence (AI) data centers. |
|
3 |
Production of supporting industrial products List of priority supporting industrial products for development as prescribed by the Government and meeting one of the following criteria:
|
|
4 |
Production of renewable energy, clean energy, energy from waste disposal; environmental protection; production of composite materials, light construction materials, rare materials; production of national defense, security and industrial mobilization products according to the provisions of law on national defense, security and industrial mobilization industry; production of key chemical industrial products and key mechanical products according to the provisions of law. |
|
5 |
Investment in the development of water plants, power plants, water supply and drainage systems, bridges, roads, railways, airports, seaports, river ports, airfields, stations and other especially important infrastructure works as decided by the Prime Minister. |
|
6 |
High-tech enterprises, agricultural enterprises applying high technology as prescribed by the Law on High Technology; science and technology enterprises as prescribed by the Law on Science, Technology and Innovation. |
|
7 |
Investment projects in the manufacturing sector must meet the following conditions:
|
|
8 |
Investment projects subject to incentives and special investment support as stipulated in Clause 2, Article 20 of the Investment Law. The Government shall specify in detail the time for disbursement of the total registered investment capital of these projects. |
|
9 |
Planting, tending and protecting forests; producing, propagating and crossbreeding plant and animal breeds; investing in post-harvest preservation of agricultural products, preservation of agricultural products, aquatic products and food; producing, exploiting and refining salt, except for salt production specified in Clause 1, Article 4 of the Law on Corporate Income Tax 2025. |
|
10 |
Forestry. |
|
11 |
Products of crops, forests, livestock, aquaculture, agricultural and aquatic product processing. |
|
12 |
Production of high-grade steel; production of energy-saving products; production of machinery and equipment for agricultural, forestry, fishery and salt production; production of irrigation equipment; production of animal feed, poultry and aquatic products. |
|
13 |
Automobile manufacturing and assembly; manufacturing of other digital technology products. |
|
14 |
Investing in technical facilities to support small and medium-sized enterprises and incubators for small and medium-sized enterprises; investing in co-working spaces to support small and medium-sized enterprises starting up and creating according to the provisions of the Law on Support for Small and Medium-sized Enterprises. |
|
15 |
People's credit funds, microfinance institutions, cooperative banks. |
|
16 |
Cooperatives and cooperative unions operating in the fields of agriculture, forestry, fishery and salt industry. |
|
17 |
Socialization in the fields of education - training, vocational training, healthcare, culture, sports, environment according to the List of types, scale criteria, and standards prescribed by the Prime Minister; judicial expertise. |
|
18 |
Investing in the construction of social housing for sale, lease, or hire-purchase for beneficiaries of social housing support policies according to the provisions of the Housing Law. |
|
19 |
Published in accordance with the provisions of the Publishing Law. |
|
20 |
Press (including newspaper advertising) as prescribed by the Press Law. |
Lookup table of 20 groups of industries and occupations with corporate income tax incentives in 2025
b) Preferential locations
According to the Clause 3 Article 12, preferential corporate income tax areas as prescribed by the Government, including:
- Areas with particularly difficult socio-economic conditions;
- Areas with difficult socio-economic conditions;
- Economic zones, high-tech zones, high-tech agricultural zones, concentrated digital technology zones.
II. Preferential tax rates
1. Application method
According to the Article 13, preferential corporate income tax rates are applied as follows:
|
STT |
Preferential tax rates |
Applicable cases |
|
1 |
10% in 15 years |
⮞ Enterprise income from implementing new investment projects specified in the points 1, 2, 3, 4, 5; ⮞ Income of enterprises belonging to 6 points; ⮞ Enterprise income from implementing investment projects belonging to points 7, 8; ⮞ Enterprise income from implementing new investment projects in areas with particularly difficult socio-economic conditions ⮞ Enterprise income from implementing new investment projects in high-tech zones, high-tech agricultural zones, concentrated digital technology zones; new investment projects in economic zones located in areas with difficult or especially difficult socio-economic conditions; ⮞ In case an investment project in an economic zone has its implementation location located in both tax-incentive and non-tax-incentive areas, the determination of tax incentives for this project shall be prescribed by the Government. |
|
2 |
10% |
⮞ Business income from activities belonging to points 10, 11 in areas with difficult socio-economic conditions; ⮞ Business income from activities belonging to points 9, 17, 18; ⮞ Publisher's income as prescribed by the Publishing Law ⮞ Income of cooperatives and cooperative unions operating in the fields of agriculture, forestry, fishery, and salt production not located in tax-incentive areas (Clause 3, Article 12); ⮞ Income of press agencies (including newspaper advertising) according to the provisions of the Press Law |
|
3 |
15% |
Business income from operations 11 points not in the tax incentive area as prescribed; Note: Income from processing agricultural and aquatic products specified in this section must satisfy the conditions specified in Clause 1, Article 4 of the Law on Corporate Income Tax 2025; |
|
4 |
17% over 10 years |
⮞ New investment projects belong to points 12, 13, 14: ⮞ New investment projects implemented in areas with difficult socio-economic conditions; ⮞ New investment projects in economic zones not located in areas with difficult or especially difficult socio-economic conditions |
|
5 |
17% |
People's credit funds, microfinance institutions, cooperative banks |
Lookup table of preferential corporate income tax rates 2025
⚠️ Note:
The period of application of preferential tax rates to income from the implementation of new investment projects of enterprises specified in Article 13 (including projects specified in Point 7 according to the lookup table above) is calculated from the first year the new investment project of the enterprise has revenue.
In case an enterprise is granted Certificates or Incentive Confirmations after the time of revenue generation, the period of application of preferential tax rates is calculated from the year in which the above certificates are granted.
Certificates and Certificates of Incentives include:
- Certificate of high-tech enterprise;
- Certificate of high-tech agricultural enterprise;
- Certificate of Science and Technology Enterprise;
- Certificate of high-tech application project;
- Certificate of incentives for supporting industrial product manufacturing projects.
2. Extension of preferential tax rate application period
According to the Clause 6, Article 13, The extension of the preferential tax rate application period is stipulated as follows:
- The Prime Minister decides to extend the period of application of preferential tax rates for a maximum of 15 years for the following projects:
- New investment projects belong to the points 1, 2, 4, 5 have a minimum investment capital of 6,000 billion VND, have a large economic and social impact and need special encouragement;
- Investment projects specified in 7 points meet one of the following criteria:
- Producing globally competitive products, with revenue reaching over VND 20,000 billion/year within 05 years at the latest from the date of revenue from the investment project;
- Regularly employing over 6,000 workers as determined by labor law;
- Investment projects in the field of economic and technical infrastructure, including: Investment in the development of water plants, power plants, water supply and drainage systems, bridges, roads, railways, airports, seaports, river ports, airports, train stations, new energy, clean energy, energy-saving industry, petrochemical projects.
- For new investment projects eligible for incentives and special investment support as prescribed in 8 pointsThe Prime Minister decides to apply a tax rate reduction of no more than 50% of the tax rate prescribed in Clause 1 Article 13; The period of application of preferential tax rate shall not exceed 1.5 times the period of application of prescribed preferential tax rate and may be extended for no more than 15 years but shall not exceed the term of the investment project.
III. Tax exemption and reduction
1. Subject and duration
a) Exemption from corporate income tax for 04 years
According to the Clause 1 Article 14Enterprises are exempted from corporate income tax for a maximum of 04 years and have 50% reduction in corporate income tax payable for a maximum of 09 years after the tax exemption period expires for the income of enterprises subject to:
- Enjoy a 10% tax rate for 15 years as prescribed in Clause 1 Article 13;
- Socialization activities in the fields of education - training, vocational training, healthcare, culture, sports, environment according to the List of types, scale criteria, and standards prescribed by the Prime Minister; judicial appraisal in areas with difficult and especially difficult socio-economic conditions;
- In case of not being located in the area as prescribed above, tax exemption is granted for a maximum of 04 years and 50% reduction of tax payable for a maximum of 05 years following the end of the tax exemption period.
b) Exemption from corporate income tax for 02 years
According to the Clause 2 Article 14Enterprises are exempted from corporate income tax for a maximum of 02 years and have their corporate income tax payable reduced by 50% for a maximum of no more than the next 04 years for the income of enterprises eligible for a tax rate of 17% for a period of 10 years as prescribed in Clause 4, Article 13.
2. Time to start tax exemption and reduction
According to the Clause 4 Article 14The time to start applying tax exemption and tax reduction is prescribed as follows:
- Begin calculated from the first year of taxable income from investment projects;
- Case no taxable income in the first 03 years, tax exemption period, tax reduction is from the 04th year.
In case an enterprise is granted a Certificate or Certificate of Incentive, the time to start applying tax exemption or reduction is stipulated as follows:
- If granted a Certificate after the time of income generation time of application from the year the Certificate is issued;
- If in the year of issuance of the Certificate the enterprise no income time of application from the first year of income;
- If in The first 03 years from the year of issuance of the Certificate that businesses no taxable income time of application calculated from the 04th year from the year of issuance of the Certificate.
This regulation applies to Certificates and Confirmations such as:
- Certificate of high-tech application project;
- Certificate of high-tech enterprise;
- Certificate of high-tech agricultural enterprise;
- Certificate of Science and Technology Enterprise;
- Certificate of incentives for supporting industrial product manufacturing projects.
For new investment projects eligible for incentives and special investment support as prescribed in Clause 2, Article 20 of the Investment Law, the Prime Minister shall decide to extend the tax exemption and reduction period by a maximum of no more than 1.5 times the tax exemption and reduction period as prescribed in Clause 1, Article 14 of this Law.
3. Tax incentives for expansion investment projects
According to the Clause 5 Article 14:
a) For projects enjoying incentives
- When the business Expanding operating projects in preferential industries, occupations and locations According to Article 12 and still in the period of enjoying tax incentives, the additional income from the expansion activities preferential treatment as the existing project for the remaining preferential period, and not separately accounted for additional income over and above the income of the operating project.
- Project expansion includes: expanding scale, increasing capacity, innovating technology, reducing pollution or improving the environment.
b) For projects whose incentive period has expired
- In case the existing project has expired its preferential period, the additional income from expansion investment is still tax exemption and reduction if meeting the criteria in Clause 6 of Article 14 but not entitled to preferential tax rates. The exemption and reduction period for the additional income is equal to the exemption and reduction period applied to new investment projects in the same industry, profession, and location with preferential corporate income tax and calculated from the year the project completed the registered investment capital.
- Business & Investment must be accounted for separately The additional income from expansion investment is used to apply incentives. In case it is not possible to account for it separately, the income from expansion investment is determined based on the ratio between the original cost of newly invested fixed assets put into use and the total original cost of fixed assets of the enterprise.
⚠️ Note:
Tax incentives specified in Clause 5 of this Article do not apply for expansion investment cases mergers and acquisitions business or investment project in operation.
c) Applicable criteria
According to the Clause 6 Article 14, an expansion investment project that enjoys incentives when the existing project's incentive period has expired must meet one of the following criteria:
- The original value of the additional fixed assets at the time of completion of disbursement of registered expansion investment capital reaches the minimum level prescribed by the Government, corresponding to the cases of expansion projects in industries, occupations, and areas with preferential corporate income tax;
- The proportion of original cost of fixed assets at the time of completion of disbursement of registered expansion investment capital must increase by at least 20% compared to the total original cost of fixed assets before starting expansion investment;
- The additional design capacity at the time of completion of disbursement of registered expansion investment capital must reach at least 20% compared to the design capacity before implementing the expansion investment.
4. Other cases of tax exemption and reduction
According to the Article 15Other tax exemption and reduction incentives include:
- Enterprises operating in production, construction, and transportation that employ many female workers are entitled to a reduction in corporate income tax equivalent to the additional expenses for female workers;
- Enterprises employing many ethnic minority workers are entitled to a reduction in corporate income tax equivalent to the additional expenses for ethnic minority workers;
- Enterprises transferring technology in priority fields to organizations and individuals in areas with difficult socio-economic conditions, or public service units providing public services in these areas, are entitled to a 50% reduction in corporate income tax calculated on income from technology transfer and income from providing public services in areas with difficult socio-economic conditions;
- Enterprises specified in Clause 2, Clause 3, Article 10 According to the Law on Corporate Income Tax 2025, when newly established from a business household, it is exempted from corporate income tax for 02 consecutive years from the time of taxable income generation;
- Public scientific and technological organizations and public higher education institutions operating on a non-profit basis are exempt from tax according to Government regulations.
- The Government shall specify this Article in detail.
In a context of constantly updating tax policies, the most effective approach remains: compliance as the foundation, data as the basis, and process as the tool. Enterprises should standardize accounting, set up incentive tracking timelines, store complete documents, and periodically review applicable policies to promptly optimize costs and control risks. A systematic tax strategy—linked to financial and operational plans—will create a legal safety margin, improve cash flow, and enhance long-term competitiveness.