How much is corporate income tax? is an important question for the business community in the context of many changes in the economy in 2025. According to the report of the General Department of Taxation, in 2023, revenue from corporate income tax reached more than 471 trillion VND, accounting for about 25% of total domestic revenueThis figure shows the key role of corporate income tax in balancing the national budget and managing the macro economy.
From October 1, 2025, the Law corporate income tax 2025 The new law officially took effect, with the general tax rate reduced from 20% to 17%, while still maintaining the incentives of 10% and 15% for priority sectors. This change not only facilitates businesses but also helps Vietnam approach international standards in attracting investment.
Understanding how much corporate income tax is and related regulations will help businesses proactively build financial plans, optimize costs and comply with the law.
Definition of corporate income tax (CIT)
In the Vietnamese tax system, corporate income tax (CIT) is considered one of the pillar taxes, playing an important role in ensuring budget revenue and maintaining fairness in society. This is a direct tax, meaning it is levied directly on the taxable income of organizations, enterprises, and establishments producing and trading goods and services.
The fundamental difference compared to indirect taxes such as value added tax (VAT) is that corporate income tax only arises when a business has positive profits, that is, after deducting reasonable and valid expenses recognized by law.
What is corporate income tax?
More specifically, corporate income tax is a financial obligation that businesses must pay to the State when they generate profits. Paying taxes represents the sharing of benefits between businesses and society, when a portion of profits is converted into public resources to serve common development goals.
For example, Company A has revenue of VND 50 billion in 2025, with reasonable deductible expenses of VND 40 billion. Thus, the remaining pre-tax profit is VND 10 billion. With a corporate income tax rate of 20%, the enterprise will have to pay VND 2 billion in tax to the budget. This calculation clearly illustrates the nature of corporate income tax: it is directly linked to business results, only appears when the enterprise makes a profit, and therefore encourages enterprises to optimize operations, control costs and have transparent accounting books.
The role of corporate income tax
Corporate income tax not only contributes financially to the state budget but also has broad macroeconomic impacts.
First of all, it is a stable source of revenue, accounting for about 20–251 TP3T of total domestic revenue annually, thereby helping the State maintain resources for infrastructure investment, spending on health care, education and social security.
In addition to its function of collecting budget revenue, CIT is also considered a tool to regulate investment and production. The State can apply preferential policies of lower tax rates (10%, 15%) for priority sectors such as high technology, high-tech agriculture, and renewable energy. This will both encourage capital flows into sectors that need to be promoted and contribute to shifting the economic structure towards sustainability.
From a business perspective, corporate income tax creates incentives for more transparent and efficient management. Businesses that want to optimize costs and profits are forced to comply with accounting regimes and make full declarations, thereby promoting a fair competitive environment. Internationally, a country's corporate income tax rate is also an important factor in attracting foreign direct investment (FDI).
Investors often compare tax rates between countries before deciding where to locate a factory or service center. Therefore, CIT not only affects the budget and operations of domestic enterprises, but is also closely linked to Vietnam's competitive position in the global value chain.
| Aspect | Content | Meaning |
| State budget | Contributes 20–25% of annual domestic revenue | Ensuring stable resources for regular expenditure and public investment |
| Investment policy | Tax incentives 10–15% for high-tech, agriculture, energy industries | Attracting FDI, orienting sustainable economic development |
| Business Administration | Linking tax obligations with business performance | Create incentives for bookkeeping transparency, increase management efficiency |
| International integration | Tax rates are a competitive factor in the global investment environment. | Increase Vietnam's attractiveness compared to other countries in the region |
Legal basis related to corporate income tax
The legal system on corporate income tax in Vietnam has been continuously formed and adjusted over the past 20 years, to suit the economic context of each period as well as the process of international integration. For businesses, mastering the legal basis not only helps them fulfill their tax obligations in accordance with regulations but also takes advantage of preferential tax policies, thereby reducing costs and improving competitiveness.
Related legal documents
The legal framework on corporate income tax is built from Law on Corporate Income Tax No. 14/2008/QH12, which has been amended and supplemented many times. To date, the latest version is the Corporate Income Tax Law 2025 (No. 67/2025/QH15) passed by the National Assembly at the May 2025 session, effective from October 1, 2025. This is an important milestone because the new law has added many provisions related to tax rates, incentives and tax management mechanisms according to international standards.
Some other important documents include: Decree No. 218/2013/ND-CP guidelines for implementing the Law on Corporate Income Tax, along with the amending decrees as follows: Decree 91/2014/ND-CP, Decree 12/2015/ND-CP, Decree 20/2017/ND-CP on tax management for enterprises with related transactions. In addition, the Ministry of Finance's circular system such as Circular 78/2014/TT-BTC, Circular 96/2015/TT-BTC and related guidance documents are also mandatory references for businesses in determining valid expenses, declaring and settling corporate income tax.
Regularly updating these legal documents is very important because if businesses apply the regulations on deductible expenses or preferential tax rates incorrectly, they can be subject to additional tax collection or administrative penalties. According to the General Department of Taxation's report in 2024, during tax inspections and audits, up to 32% of businesses had their tax obligations adjusted directly related to the determination of invalid expenses according to the provisions of the Law on Corporate Income Tax.
Corporate Income Tax Law 2025: New regulations updated
The 2025 Corporate Income Tax Law has a number of new highlights that businesses need to pay special attention to. First of all, the basic tax rate is adjusted in line with international trends. Specifically, from October 1, 2025, the standard tax rate for most businesses will remain at 20%, but the law supplements regulations applying a lower preferential tax rate for small and medium-sized enterprises (from 15-17%) and raising the tax rate to a higher level (22-25%) for some industries with particularly high profits such as resource exploitation and commercial real estate.
Second, the new law clarifies eligible deductible expenses, especially those related to digital transformation, research and development (R&D), and training of high-quality human resources. This is an important step forward, both reducing the tax burden for businesses and encouraging investment in sustainable and high-value-added sectors.
In addition, the 2025 Corporate Income Tax Law also adds provisions on the anti-base erosion and profit shifting (BEPS) mechanism as recommended by the Organization for Economic Cooperation and Development (OECD). This is especially important in the context of many multinational corporations tending to shift profits to countries with low tax rates. With the new regulations, Vietnam demonstrates its commitment to integration and compliance with global standards on tax transparency.
From a business perspective, these new points bring both opportunities and challenges. The opportunity lies in the fact that many small and medium-sized enterprises enjoy lower tax rates, reducing cost pressures and increasing room for reinvestment. However, enterprises with cross-border operations or using complex affiliated transaction structures will face stricter management requirements, minimizing the risks of tax adjustments due to violations of transfer pricing principles.
Subjects subject to corporate income tax
In the Vietnamese legal system, the correct determination corporate income tax (CIT) is a prerequisite for accurate tax declaration and payment. This is also a content that is often confused between domestic enterprises and organizations with foreign elements.
Subjects of corporate income tax include organizations engaged in production and business of goods and services with taxable income according to the provisions of this Law; regardless of form of ownership, economic sector or field of operation.
This means that any organization that generates legal income from production and business activities in Vietnam is subject to corporate income tax, regardless of whether it is a state-owned enterprise, joint stock company, limited liability company, cooperative, or revenue-generating public service unit.
Domestic enterprises
The first group is enterprises established and operating under the Law on Enterprises of Vietnam. They are subject to corporate income tax on all income generated within and outside the territory of Vietnam. For example, a software company in Hanoi has revenue from exporting products to Japan, the profit from this contract must still be declared as taxable income in Vietnam.
Foreign Direct Investment (FDI) Enterprises
FDI enterprises are also subject to corporate income tax in Vietnam for profits generated within Vietnam. This ensures fairness and healthy competition between domestic and foreign enterprises.
Other organizations with business activities
In addition to enterprises, other organizations such as cooperatives, people's credit funds, and career organizations with production, business and service activities must also pay corporate income tax if they generate profits.
Illustrative example of corporate income tax subject
A specific case: Company B is a Vietnamese enterprise with domestic revenue of VND30 billion and pre-tax profit of VND5 billion. At the same time, this company has a branch in Singapore that generates a profit of VND1 billion. When finalizing, Company B must declare and pay corporate income tax on the total profit of VND6 billion in Vietnam, due to the global tax principle applied to resident enterprises.
| Target group | Taxable income range | Policy implications |
| Domestic enterprises | All income in and out of Vietnam | Ensuring global tax obligations |
| FDI enterprises | Income generated in Vietnam | Create fair competition with domestic enterprises |
| Cooperatives, other organizations | Income from production and business activities | Expanding the scope of budget regulation |
How much is corporate income tax?
How much is corporate income tax? is the central question for businesses when planning financial strategies in 2025. According to the 2025 Corporate Income Tax Law (No. 67/2025/QH15), from October 1, 2025, the new tax rate has been clearly defined and applied to different groups of businesses depending on revenue and sector. Understanding this policy helps businesses optimize tax costs and make more accurate business plans.
Current corporate income tax rate
Currently, the corporate income tax (CIT) rate is being applied according to the Corporate Income Tax Law No. 14/2008/QH12 and the amended and supplemented Laws of 2013 and 2014. The common tax rate is 20%, but depending on the field, industry or locality, a higher rate may be applied or a lower incentive may be enjoyed. The table below summarizes the rates. corporate income tax rate 2025 according to the law:
| Legal basis | Applicable objects | Current tax rate |
| Article 10, Corporate Income Tax Law No. 14/2008/QH12 (amended by Law No. 32/2013/QH13) | General businesses (not subject to preferential or special treatment) | 20% |
| Clause 2, Article 10, Law No. 14/2008/QH12 | Enterprises operating in oil and gas exploration and exploitation | 32% – 50% (depending on location and operating conditions) |
| Clause 3, Article 10, Law No. 14/2008/QH12 (amended by Law No. 71/2014/QH13) | Enterprises exploiting rare resources (gold, silver, precious stones, rare earth) | 40% – 50% |
| Article 13, Law No. 14/2008/QH12 and Law No. 32/2013/QH13 | Enterprises in investment incentive sectors and areas; high-tech application projects, scientific research, small and medium enterprises (according to specific regulations) | Can enjoy preferential tax rates 10%, 15%, 17% or tax exemption or reduction for a certain period of time |
Corporate income tax rates updated from October 1, 2025
According to Corporate Income Tax Law 2025 No. 67/2025/QH15, the tax rates and conditions are prescribed as follows:
| Case | New tax rate |
| Most businesses, not eligible for special incentives | 20% |
| Enterprises with total annual revenue of no more than 3 billion VND | 15% |
| Enterprises with total revenue from over 3 billion VND to no more than 50 billion VND | 17% |
| Special cases (resources, oil and gas, mining, exploitation of rare resources) | There are still higher fluctuating tax rates, such as 25% – 50% depending on the type, location, and service conditions of the new Law. |
Comparison of old and new corporate income tax rates
To clearly see the policy change, it is necessary to put the current CIT rate and the new tax rate (applied from October 1, 2025 according to the 2025 CIT Law No. 67/2025/QH15) side by side. The table below shows the difference between the old and new tax rates for each group of enterprises:
| Element | Before 10/01/2025 (Current) | From 01/10/2025 (New Law) |
| Common tax rates for medium and large businesses | 20% | Still 20% if revenue > 50 billion VND or not eligible for incentives |
| Small Business Offers | Yes, but not as clear as the new law on the small turnover threshold to reduce the lower tax rate | Clear reduction: 15% if revenue ≤ 3 billion VND; 17% if revenue over 3 – ≤ 50 billion VND |
| Scope of application of the offer | Applicable to some small businesses, projects, specific industries | More clearly, with clearly defined revenue conditions, with regulations to avoid preferential treatment (e.g. subsidiaries, affiliates) |
| Special cases (resources, oil and gas, rare minerals) | High tax rate (32%–50% depending on type), incentives available but limited | While maintaining high levels for this specific type, the new Law continues to provide for lower preferential or specific levels in special cases (for example, rare resources in difficult areas). |
Illustrative examples of corporate income tax rates
Suppose Company C has a total revenue of 40 billion VND in 2026. According to regulations, the applicable tax rate is 17%, because the enterprise does not exceed the threshold of 50 billion VND. If Company C's taxable profit is 5 billion VND, then the corporate income tax payable is 5 billion × 17% = 850 million VND.
| Scope of application | Tax rate |
| Enterprises with revenue ≤ 3 billion VND/year | 15% |
| Enterprises with revenue from >3 billion to ≤50 billion VND | 17% |
| Other businesses (general tax rate) | 20% |
| Oil and gas exploitation | 25% – 50% (according to the Prime Minister's decision) |
| Rare resources | 50%, difficult areas reduced to 40% |
Comparing Vietnam's corporate income tax rate with international
When asking the question “How much is corporate income tax?”, it is impossible to separate the comparison with other countries in the region. Vietnam is applying the rate of 20% — this is the average figure compared to Asia – ASEAN.
- Singapore maintains a rate of 17%, the lowest in the region and is a factor that helps this country attract FDI capital flows.
- Indonesia applies 22%, higher than Vietnam, reflecting large budget needs but still maintaining incentives for key industries.
China is at 25%, among the highest, but combined with large-scale tax incentives for high technology. - Malaysia maintains 24%, but has preferential tiers for small businesses.
- Thailand applies 20%, equivalent to Vietnam, with a reduction mechanism for SMEs.
| Nation | Standard tax rate | Key Notes |
| Vietnam | 20% | Regional average |
| Singapore | 17% | Lowest, strong competition |
| Indonesia | 22% | Higher than VN, with industry incentives |
| China | 25% | High, with technology incentives |
| Malaysia | 24% | There are incentives for SMEs |
| Thailand | 20% | Vietnam equivalent |
In general, Vietnam's corporate income tax rate of 20% is at the average level in the ASEAN-Asia region. While Singapore is competitive thanks to its lowest rate (17%), many other countries such as Indonesia, Malaysia, and China apply higher taxes but in return have strong incentives for key industries. Thailand is on par with Vietnam but supports SMEs better. This shows that Vietnam needs to consider expanding incentives or support policies to increase its competitiveness in attracting investment.
Impact of corporate income tax rates on businesses and Vietnam's socio-economy
How much corporate income tax is not only a financial technical issue but also directly affects the development strategy of the economy. With the current level of 20%, corporate income tax policy is leaving many clear impacts.
For business
Corporate income tax governs cash flow and investment decisions. Highly profitable businesses must balance their tax obligations with their reinvestment needs. In some preferential industries (10% or 15%), businesses have more room to reduce costs and expand their scale. On the contrary, industries that are not eligible for incentives still have to bear the 20% level, causing considerable pressure on maintenance costs, especially for small and medium-sized businesses.
For the economy
Corporate income tax contributes about 20–251 TP3T of total domestic revenue each year, providing a stable source of revenue for the budget. In addition, the tax mechanism also plays a role in regulating foreign investment flows. Moderate tax rates help Vietnam maintain its competitive position in the region, while limiting the “race to reduce taxes” that can cause budget losses.
For society
From a social perspective, corporate income tax contributes to maintaining fairness: when businesses make profits, they must share a portion with the State. This revenue is reallocated to infrastructure, education, and healthcare, creating a foundation for sustainable development.
| Aspect | Main impact | Long-term meaning |
| Business | Impact on profits, reinvestment plans | Promote cost management, prioritize industry orientation |
| Economy | Contribute 20–25% domestic revenue | Stable revenue, maintaining FDI attraction |
| Society | Enterprises share profits with the State | Resources for public welfare |
Some questions about corporate income tax rates
How much is corporate income tax now?
Currently, the general tax rate is 20% applicable to most businesses. Some preferential sectors such as agriculture, high technology, education, healthcare, renewable energy enjoy lower rates of 10% or 15%.
When will the new corporate income tax rate apply?
According to the 2025 Corporate Income Tax Law, from October 1, 2025, new regulations on tax rates will officially take effect. Enterprises need to review contracts, financial statements and the timing of income recognition to avoid errors during the transition period.
Do loss-making businesses have to pay corporate income tax?
If the business results in a loss after deducting eligible expenses, the enterprise does not have to pay corporate income tax. The loss can also be carried forward to the following years to be deducted from taxable income (up to 5 years).
Is there a difference between domestic enterprises and FDI enterprises?
The basic tax rate is the same, but FDI enterprises can enjoy special incentives depending on the industry and investment location. This is a tool to attract foreign investment and encourage the development of strategic sectors.
In which cases are corporate income tax incentives enjoyed?
Projects in the fields of high technology, supporting product manufacturing, renewable energy, education and healthcare often enjoy incentives. In addition, enterprises located in difficult or extremely difficult areas can also apply lower tax rates.
Conclude
Corporate income tax is an important pillar of the Vietnamese tax system, contributing to creating sustainable revenue and promoting social equity. The 2025 Corporate Income Tax Law with tax rate adjustment from October 1, 2025 marks a step forward in modernizing fiscal policy, simplifying procedures and enhancing transparency. This change not only poses a cost challenge but also opens up opportunities for businesses to restructure governance, optimize profits and increase long-term competitiveness.
If your business is looking for a reliable companion to advise, declare and settle corporate income tax accurately and effectively, please contact us. MAN – Master Accountant NetworkWith a team of experts knowledgeable in tax law, modern management technology and experience working with many large and small businesses, MAN is committed to providing comprehensive, safe and optimal corporate income tax solutions.
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
