How Is Corporate Income Tax Calculated in Vietnam?

Short answer: Corporate income tax (CIT) is calculated as taxable income multiplied by the tax rate. Under the Law on Corporate Income Tax 2025 (No. 67/2025/QH15, effective from 01/10/2025), the standard rate is 20%; enterprises with total annual revenue not exceeding VND 3 billion apply 15%; revenue above VND 3 billion up to VND 50 billion apply 17%.

What is corporate income tax?

Under Article 3 of the Law on Corporate Income Tax 2025 (No. 67/2025/QH15), taxable income includes income from production and business of goods and services and other income such as: income from capital transfers, real estate transfers, transfers of investment projects; income from rights to use and own assets; income from transfers, leases and liquidation of assets; deposit interest and lending interest; other income as provided by the Law.

Who must pay corporate income tax?

Under Article 2 of the Law on Corporate Income Tax 2025, taxpayers are organizations engaged in production and business of goods and services with taxable income, including: enterprises established under Vietnamese law; foreign enterprises with or without a permanent establishment in Vietnam; organizations established under the Law on Cooperatives; public service units; and other organizations with production and business activities generating income.

How taxable income is determined

Under Article 7 of the Law on Corporate Income Tax 2025 (guided by Decree 320/2025/ND-CP):

Taxable income in a tax period is determined as taxable revenue minus tax-exempt income and losses carried forward from prior years.

Taxable revenue equals revenue minus deductible expenses of production and business activities plus other income, including income received outside Vietnam. Income from real estate transfers, transfers of investment projects, transfers of the right to participate in investment projects and certain specific activities must be determined separately for tax declaration and payment.

Current corporate income tax rates

Under Article 10 of the Law on Corporate Income Tax 2025 (No. 67/2025/QH15):

• 20% — standard rate;
• 15% — enterprises with total annual revenue not exceeding VND 3 billion;
• 17% — enterprises with total annual revenue above VND 3 billion up to VND 50 billion;
• 25% to 50% — oil and gas prospecting, exploration and exploitation;
• 50% — exploitation of rare resources (40% where eligible for areas with exceptionally difficult conditions).

Important note: the 15% and 17% rates are determined based on total revenue of the immediately preceding tax period, not on the taxable income of the current period. Enterprises with related-party relationships need to check additional exclusion conditions in Clause 4, Article 18 of the Law. The old 22% rate and the VND 20 billion revenue threshold of the Law on Corporate Income Tax 2008 (amended in 2013, 2014) no longer apply from 01/10/2025.

Illustrative example

Company A has total revenue of VND 40 billion in 2025 and taxable income of VND 2 billion in 2026. Since the immediately preceding year’s revenue (VND 40 billion) falls in the above-VND-3-billion-to-VND-50-billion bracket, the applicable rate for 2026 is 17%. The CIT payable for 2026 is: VND 2 billion × 17% = VND 340 million.

Notes on applying current legal provisions

This article is presented for reference to help readers understand the legal issue at a general level before preparing dossiers or fulfilling tax obligations. Legal provisions may change depending on the time and specific circumstances, especially the preferential rate provisions in Article 13 of the Law. If you need to determine exactly the applicable legal basis, please contact the lawyers of ANT Legal at 0966.475.966 for checking and advice before proceeding.

Common risks to note

• Applying the old 22%/20% rates of a superseded law;
• Confusing “taxable income” with “revenue” when determining the 15%/17% rates;
• Omitting other income or misdetermining deductible expenses;
• Failing to check preferential rate conditions before applying them.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking the determination of taxable income and applicable rates, and advising on compliance options for corporate income tax obligations under current regulations. For quick advice, you may contact our lawyers at 0966.475.966.

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