{"id":4483,"date":"2026-02-04T09:18:07","date_gmt":"2026-02-04T02:18:07","guid":{"rendered":"https:\/\/thue.man.net.vn\/?p=4483"},"modified":"2026-02-04T09:18:17","modified_gmt":"2026-02-04T02:18:17","slug":"chinh-sach-uu-dai-thue-tndn-theo-dia-ban","status":"publish","type":"post","link":"https:\/\/thue.man.net.vn\/en\/chinh-sach-uu-dai-thue-tndn-theo-dia-ban\/","title":{"rendered":"Corporate income tax incentives based on geographical location: Analysis of Official Letter 1785\/CTBDU-TTHT"},"content":{"rendered":"

Corporate income tax incentives based on geographical location are an important financial leverage tool for the Government to regulate investment and economic development in different regions. Proper application of these regulations not only helps businesses reduce their financial burden but also creates a sustainable competitive advantage in economic zones or disadvantaged areas.<\/span><\/p>\n

According to data from the General Department of Taxation, businesses enjoying corporate income tax incentives based on geographical location account for a large proportion of total tax settlements, especially in Binh Duong. Understanding the nature of new investment projects and the conditions for enjoying incentives is a mandatory requirement for accountants to avoid the risk of tax arrears and administrative penalties.<\/span><\/p>\n

The current legal basis for corporate income tax incentives based on geographical location.<\/b><\/h2>\n
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The current legal basis for corporate income tax incentives based on geographical location.<\/figcaption><\/figure>\n

Corporate income tax incentives based on geographical location are strictly regulated by the legal framework. Businesses need to clearly identify the applicable legal document at the time revenue is generated to properly exercise their rights.<\/span><\/p>\n

Key regulations include <\/span>Investment Law 2020<\/span><\/a>, <\/span>Tax Administration Law 2019<\/span><\/a> and <\/span>Circular 96\/2015\/TT-BTC<\/span><\/a>. These documents define the legal framework regarding preferential tax rates, tax exemption periods, and tax reductions for economic entities nationwide.<\/span><\/p>\n

Understanding these documents helps businesses confidently exercise their right to self-calculate, self-declare, and self-pay taxes under Vietnam's modern tax management mechanism.<\/span><\/p>\n

Decoding the concept of new investment projects in corporate income tax incentives based on geographical location.<\/b><\/h2>\n
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Decoding the concept of new investment projects in corporate income tax incentives based on geographical location.<\/figcaption><\/figure>\n

To qualify for corporate income tax incentives based on geographical location, a prerequisite is usually a new investment project. According to the 2020 Investment Law, this must be a first-time project or independent of the enterprise's existing projects.<\/span><\/p>\n

In the field of taxation, this concept is specified in Circular 96\/2015\/TT-BTC. New investment projects are typically projects that received their first Investment Certificate from January 1, 2014, or domestic projects associated with the establishment of enterprises with capital under 15 billion VND.<\/span><\/p>\n

The distinction between new projects and expansion investments is a crucial boundary. It results in different tax outcomes when businesses calculate the applicable corporate income tax incentives based on their geographical location.<\/span><\/p>\n

List of geographical areas and corporate income tax incentives by geographical area.<\/b><\/h2>\n

Corporate income tax incentives are differentiated based on the geographical location of the project. Typically, incentive areas are divided into three main groups with different levels of financial support.<\/span><\/p>\n

Summary of common corporate income tax incentives by geographical area<\/b><\/h3>\n

Below is a summary table of the levels. <\/span>corporate income tax incentives<\/span><\/a> Currently, this is a common practice, applied according to each type of investment location. The content focuses on comparing preferential tax rates, tax exemption periods, and tax reduction periods, helping businesses quickly determine the appropriate policy when planning investments and optimizing their tax obligations.<\/span><\/p>\n\n\n\n\n\n\n
Summary table of corporate income tax incentives by geographical area<\/b><\/caption>\n
Type of area<\/b><\/td>\nPreferential tax rate<\/b><\/td>\nTax-free period<\/b><\/td>\nTax reduction period (50%)<\/b><\/td>\n<\/tr>\n
Areas with particularly difficult conditions\/Economic zones<\/span><\/td>\n10% in 15 years<\/span><\/td>\n4 years<\/span><\/td>\n9 years<\/span><\/td>\n<\/tr>\n
Difficult terrain<\/span><\/td>\n17% in 10 years<\/span><\/td>\n2 years<\/span><\/td>\n4 years<\/span><\/td>\n<\/tr>\n
Industrial zones (excluding favorable locations)<\/span><\/td>\nAccording to the standard tax rate<\/span><\/td>\n2 years<\/span><\/td>\n4 years<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Note regarding industrial zones in favorable locations.<\/b><\/h3>\n

Not all projects in industrial parks receive corporate income tax incentives based on location. If the industrial park is located in an area with favorable socio-economic conditions (such as an inner-city district of a special urban area), the enterprise will not be eligible for this policy.<\/span><\/p>\n

This requires the accounting department to carefully review the list of preferential areas in the current Decrees before implementation. <\/span>corporate income tax settlement<\/span><\/a> year.<\/span><\/p>\n

Determining income eligible for corporate income tax incentives based on geographical location.<\/b><\/h2>\n
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Determining income eligible for corporate income tax incentives based on geographical location.<\/figcaption><\/figure>\n

A common misconception is that businesses assume all income generated is eligible for tax incentives. In reality, corporate income tax incentives based on geographical location only apply to income directly derived from business operations within that location.<\/span><\/p>\n

Income not eligible for preferential treatment.<\/b><\/h3>\n

According to <\/span>Official document 1785\/CTBDU-TTHT<\/span><\/a>, The following income is subject to tax at rate 20%:<\/span><\/p>\n