Corporate income tax rate in 2025 is an important question that many businesses ask when making financial plans and cost forecasts. According to published dataIn 2023, corporate income tax revenue will reach about VND 310,482 billion (excluding crude oil), accounting for 17.71% of total state budget revenue; if crude oil is included, the figure is VND 357,682 billion, equivalent to 20.161% of total budget revenue. These figures show that corporate income tax is always a stable source of revenue and plays a strategic role in balancing the national budget.
From October 1, 2025, new regulations of the Corporate Income Tax Law will officially take effect, requiring businesses to update and adjust promptly to ensure compliance with the law and optimize costs.
Overview of corporate income tax
In the Vietnamese tax system, corporate income tax (CIT) always plays a particularly important role. It is not only a large source of revenue for the state budget but also a tool for macro-regulation, investment orientation and promotion of transparency in business activities. To understand better, it is necessary to consider the basic concept and the key roles that CIT brings.
What is corporate income tax?
Corporate income tax (CIT) is a direct tax, levied directly on the taxable income of organizations producing and trading goods and services. Unlike indirect taxes such as value added tax, corporate income tax only arises when the enterprise makes a profit, that is, after deducting reasonable and valid expenses according to the law.
The role of corporate income tax
Corporate income tax is an important financial tool, not only contributing greatly to the budget but also having many macro and micro roles:
- Supplementing stable financial resources for the state budget.
- Ensure social justice when businesses make profits they must share a portion with the State.
- As an investment orientation tool, through tax incentives for priority sectors such as high technology, renewable energy, and clean agriculture.
- Promote financial transparency, encourage businesses to manage costs effectively and improve competitiveness.
| Aspect | Content | Meaning |
| State budget | Corporate income tax contributes about 17-20% of total annual state budget revenue | Stable revenue source, ensuring balanced public spending |
| Investment policy | Tax incentives for priority sectors (10%, 15%) | Attracting FDI, promoting innovation and sustainable development |
| Business Administration | Link tax obligations to profits earned | Create incentives for financial transparency and improve operational efficiency |
Subjects subject to corporate income tax
According to Article 2 of the Law on Corporate Income Tax, corporate income tax subject are all organizations that produce and trade goods and services and generate taxable income in Vietnam, regardless of ownership form or nationality.
Enterprises established under Vietnamese law
Including limited liability companies, joint stock companies, private enterprises, cooperatives, cooperative unions, and public service units with production and business activities.
For example: A joint stock company in Ho Chi Minh City operating in the construction sector, whether making a profit or a loss, is still subject to corporate income tax declaration. If a profit is made, it must pay according to the prescribed tax rate.
Foreign Direct Investment (FDI) Enterprises
Organizations established abroad but having permanent establishments or generating income in Vietnam must also pay corporate income tax.
For example: A Japanese technology company with a branch in Hanoi earned a profit of VND50 billion from providing software services. This income is subject to corporate income tax in Vietnam.
Other organizations with income-generating activities
Including investment funds, project management boards, public service units with production and business activities.
For example: A public university organizes short-term training services and makes a profit, but this profit must still be declared and paid corporate income tax.
| Target group | Illustrative example | Corporate income tax obligations |
| Domestic enterprises | Construction joint stock company in Ho Chi Minh City | Declare and pay taxes according to generated profits |
| Enterprises with FDI capital | Japanese company branch in Hanoi | Pay tax on profits generated in Vietnam |
| Other organizations with taxable income | Public universities open short-term training courses | Must declare and pay taxes according to regulations |
Detailed corporate income tax rates
One of the most important contents of corporate income tax is the corporate income tax rate. This is the factor that directly determines the amount of tax that enterprises must pay, and at the same time reflects the regulatory orientation of the State. The corporate income tax rate system is both stable to ensure budget revenue and flexibly adjusted in each period to support enterprises and suit the economic context.
Current corporate income tax rate
In the Vietnamese legal system, corporate income tax rates are clearly regulated to create a common standard framework for production and business activities. Up to now, the current corporate income tax rates are mainly applied according to Corporate Income Tax Law 2008, as amended thereafter, and shall remain in effect until October 1, 2025.
General corporate income tax rate
The most basic corporate income tax rate today is 20%, applicable to most businesses in all industries. This rate is considered reasonable compared to the region, because it both ensures budget obligations and does not put too much burden on business profits.
For example: A trading company has taxable profit in 2024 of 5 billion VND. Corporate income tax payable = 5 billion × 20% = 1 billion VND.
Specific corporate income tax rates for certain sectors
Besides the common 20% rate, there are industries subject to higher corporate income tax rates, because they are considered to have high profit potential or the State wants to regulate them tightly:
- Oil, gas and rare resources: ranges from 32% – 50%, depending on the project and exploitation conditions.
- Some mineral exploitation activities: from 40% – 50%.
For example: A mining enterprise has taxable profit of 100 billion VND, with tax rate 40% → corporate income tax payable = 40 billion VND.
Tax incentives and exemptions
In order to encourage investment, especially in priority areas, the State issues preferential policies on corporate income tax rates:
- Enterprises investing in high-tech fields, high-tech agriculture, or projects in special economic zones can apply preferential corporate income tax rate 10% for 15 years.
- Some other sectors are subject to tax rates of 15% or 17% for 10 years.
- In addition, newly established enterprises can also be exempted from tax for 2-4 years, and have 50% reduced for the next 4-9 years, depending on the scale and field.
Example: A software startup is eligible for the preferential tax rate 10% for 15 years. With a profit of 20 billion VND/year, the corporate income tax payable is only 2 billion VND, instead of 4 billion VND if applying the common rate 20%.
The meaning of the current corporate income tax rate mechanism
The allocation of multiple corporate income tax rates not only helps the State to be flexible in management but also creates leverage to direct investment capital into the areas that need to be encouraged. At the same time, the common rate of 20% is currently considered competitive compared to countries in the ASEAN region, where many countries still apply rates from 22% - 25%.
Corporate income tax rates updated from October 1, 2025
According to Law on Corporate Income Tax 2025 (67/2025/QH15), starting from October 1, 2025, the corporate income tax rate in Vietnam will be applied according to the revenue stratification mechanism. This is one of the most important changes, directly affecting the financial plans of most businesses.
Corporate income tax rates are determined according to revenue levels, to encourage small and medium-sized enterprises while ensuring fairness among business groups.
This change is consistent with the reality in Vietnam, where small and medium enterprises account for more than 97% of the total number of enterprises, contributing nearly 45% of GDP. With lower tax rates, this group of enterprises will have more room to accumulate capital, reinvest and convert from individual business households to formal models. Including:
- Enterprises with revenue not exceeding 3 billion VND/year → tax rate 15%.
- Enterprises with revenue from over 3 billion to 50 billion VND/year → tax rate 17%.
- Enterprises with revenue over 50 billion VND/year → tax rate remains 20%.
- Enterprises exploiting oil and gas, rare resources → special tax rate bracket 25% – 50%.
| Revenue group/year | Before October 1, 2025 | After October 1, 2025 | Main meaning |
| Not more than 3 billion VND | 20% | 15% | Reducing the burden on micro-enterprises |
| Over 3 - 50 billion VND | 20% | 17% | Encourage medium-sized enterprises to expand production |
| Over 50 billion VND | 20% | 20% | Stable, unchanging |
| Oil and gas, a rare resource | 25% – 50% | 25% – 50% | Continue to apply the specific framework |
Comparison of corporate income tax rates in Vietnam and the world
Corporate income tax rates not only reflect domestic fiscal policy but are also an important competitive factor in attracting foreign investment. In the context of globalization, many countries are constantly adjusting tax rates to balance budget revenues and the ability to create a favorable business environment. Therefore, it is necessary to compare Vietnam with ASEAN and OECD countries to clearly see the current advantages and challenges.
Southeast Asia (ASEAN) region
In the ASEAN region, corporate income tax (CIT) rates vary significantly among countries, reflecting investment attraction strategies and specific socio-economic conditions. Vietnam currently applies a general tax rate of 20%, lower than the period before 2016 (22%). Compared to some countries:
| Nation | General corporate income tax rate | Key Notes |
| Vietnam | 20% | There is a discount of 10% - 15% for priority projects, small and medium enterprises. |
| Thailand | 20% | 17% for small and medium enterprises |
| Indonesia | 22% (reduced to 20% from 2025) | There are incentives for listed enterprises and technology enterprises. |
| Malaysia | 24% | 17% for small and medium enterprises with low profits |
| Singapore | 17% | Many exemption and reduction policies actually reduce the effectiveness to only 10-12% |
| Philippines | 25% | There is a roadmap to reduce to 20% for small businesses. |
| Cambodia | 20% | Small businesses can apply lower rates. |
| Laos | 24% | There are incentives for investment in infrastructure and agriculture. |
It can be seen that Vietnam's corporate income tax rate of 20% is currently in the low-middle group in ASEAN, more competitive than Malaysia (24%) or the Philippines (25%), but still higher than Singapore (17%). This both ensures budget revenue and maintains attractiveness in the eyes of investors.
OECD countries
In the group of countries belonging to the Organization for Economic Cooperation and Development (OECD), corporate income tax rates are often higher than in the ASEAN region, but the trend in recent years has been to cut them to encourage investment.
| Nation | General corporate income tax rate | Key Notes |
| USA | 21% | Sharp reduction from 35% to 21% from 2018 (Tax Cuts and Jobs Act) |
| Japan | ~23,2% | May be higher if local taxes are included |
| Korea | 22% – 25% | Applying progressive tax rates, large enterprises pay higher taxes |
| Virtue | 29.8% (including federal + local taxes) | Highest effective tax rate in G7 group |
| France | 25% | Down from previous level of 33.3% |
| Older brother | 25% (from 2023) | Increase from 19% to offset post-COVID-19 budget |
| Canada | 26.5% (including federal + state) | There are incentives for small and high-tech enterprises. |
| Australia | 30% (25% for small businesses) | One of the countries with high tax rates |
Compared to OECD, Vietnam (20%) is much lower, only equivalent to the United States (21%) and lower than Japan, South Korea, Germany or France. This creates an advantage in attracting FDI, especially when multinational corporations are considering moving their supply chains out of China. However, when the global minimum tax of 15% (Global Minimum Tax) is applied from 2024, this advantage will decrease, forcing Vietnam to combine tax incentives with non-tax support policies such as infrastructure, human resources and administrative procedure reform.
Impact of corporate income tax rates on businesses and Vietnam's socio-economy
Corporate income tax rates are not just technical figures on financial obligations but also have a profound impact on business behavior and economic development. Changes in policy, especially from October 1, 2025, will directly impact the cost of capital, profits and competitiveness of domestic and foreign enterprises.
For business
When the corporate income tax rate is kept at a reasonable level, businesses will have more room to reinvest and expand production. For example, with the general tax rate of 20%, a business with pre-tax profit of 100 billion VND must pay 20 billion VND, the remaining 80 billion VND can be allocated for reinvestment or dividends. However, if the corporate income tax rate increases to 22% like some neighboring countries, the amount of tax payable will increase by 2 billion VND, reducing the already weak competitiveness of Vietnamese businesses.
For the socio-economic
Corporate income tax rates account for about 20-251 TP3T of total annual domestic revenue, which is an important source of finance for public spending. Maintaining a reasonable tax rate ensures revenue for the budget while not creating too much of a burden for businesses. At the same time, tax incentives for high-tech industries, renewable energy, high-tech agriculture, etc. contribute to orienting social investment capital flows towards a sustainable development strategy.
One notable point is that global tax competition is increasingly fierce. If Vietnam maintains a tax rate that is too high compared to the ASEAN region, its ability to attract FDI will be limited. Conversely, if the corporate income tax rate is reduced too low, the budget may lack revenue, affecting public investment and social security.
Some frequently asked questions about corporate income tax rates
What is the current corporate income tax rate?
From now until September 30, 2025, the general tax rate applicable to most businesses is 20% on taxable income. Some specific industries may apply higher tax rates (32–50%) or enjoy lower incentives (10%, 15%).
From October 1, 2025, how will corporate income tax rates change?
According to the 2025 Corporate Income Tax Law, the standard tax rate remains at 20%, but the scope of preferential application is narrowed, and tax rates are adjusted to increase for some resource exploitation industries to limit over-exploitation and protect the environment.
Do small and medium enterprises enjoy tax incentives?
Yes. Small and medium enterprises that meet the conditions on capital, labor and revenue are entitled to the preferential tax rate 15% for a certain period of time. This policy aims to support young enterprises to accumulate capital and increase competitiveness.
What income is exempt from corporate income tax?
Some income is exempt from tax by law, such as: income from performing scientific and technological tasks, income from implementing investment projects in areas with particularly difficult socio-economic conditions, income from transferring emission reduction certificates (CERs)...
What happens if a business underpays corporate income tax?
Enterprises that underpay taxes will have to pay the underpayment, plus late payment fees, and may be subject to administrative penalties. In cases of tax fraud and evasion, criminal liability may be prosecuted under the provisions of the Penal Code.
Conclude
The 2025 corporate income tax rate is not only a technical number, but also reflects Vietnam's economic development orientation in the context of deep international integration. Maintaining the standard tax rate 20%, while adjusting incentives and tightening management for specific industries, helps balance investment attraction, ensuring fairness and increasing budget revenue. This is both an opportunity for small and medium-sized enterprises to take advantage of incentives and a challenge for industries with high corporate income tax rates.
To adapt effectively, businesses need to proactively update policies, calculate financial strategies and optimize tax accounting activities. This not only helps minimize legal risks, but also contributes to enhancing reputation and creating a foundation for sustainable development.
If your business is looking for a comprehensive solution for tax and accounting management, MAN – Master Accountant Network Always ready to accompany. With a team of experts knowledgeable in tax law, modern management tools and in-depth consulting services, we are committed to helping businesses optimize tax obligations, save costs and improve business efficiency.
Contact information for corporate income tax services at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
