Tiếng Việt
中文Short answer: The taxable income for corporate income tax (CIT) in a period is determined as taxable revenue minus tax-exempt income and carried-forward losses (Article 7 of the Law on Corporate Income Tax 2025). Enterprises file a centralized tax declaration with the tax authority directly managing the location of the head office, and at the same time allocate the tax liability to localities where business activities subject to allocation arise.
How is corporate income tax taxable income determined?
Under Article 7 of the Law on Corporate Income Tax 2025 (No. 67/2025/QH15, effective from 01/10/2025; guided by Decree 320/2025/ND-CP):
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1. Taxable income in a tax period is determined as taxable revenue minus tax-exempt income and losses carried forward from prior years.
2. Taxable revenue equals revenue minus deductible expenses of production and business activities plus other income, including income received outside Vietnam.
3. Income from transfers of real estate, transfers of investment projects, transfers of the right to participate in investment projects, and transfers of mineral exploration, exploitation and processing rights must be determined separately for tax declaration and payment. Income from transfers of investment projects (except mineral exploration and exploitation projects), income from transfers of the right to participate in investment projects (except transfers of the right to participate in mineral exploration and exploitation projects), and income from real estate transfers, if at a loss, may be offset against profits of production and business activities in the tax period.
The CIT payable in the period is then calculated as taxable income multiplied by the tax rate: the standard rate is 20%; 15% if total annual revenue does not exceed VND 3 billion; 17% if total annual revenue is above VND 3 billion up to VND 50 billion (based on revenue of the immediately preceding tax period), under Article 10 of the Law on Corporate Income Tax 2025.
Where is corporate income tax filed and paid?
Under the Law on Tax Administration 2025 (No. 108/2025/QH15, effective from 01/07/2026) and Decree 252/2026/ND-CP detailing the implementation of the Law on Tax Administration, the principles for declaring and paying corporate income tax are as follows:
- Enterprises file a centralized tax declaration with the directly managing tax authority at the head office location;
- Where the enterprise has business activities, dependent units or business locations in a province-level administrative unit other than the head office location and falls within a case subject to allocation, the enterprise calculates and allocates the payable tax liability to each locality entitled to the state budget revenue, under the guidance of the Minister of Finance;
- For corporate income tax, enterprises must still allocate to manufacturing facilities, including processing, assembly facilities and solar power facilities.
The decentralization, management and use of CIT revenue sources are carried out under the Law on State Budget.
Notes on applying current legal provisions
This article is presented for reference to help readers understand the legal issue at a general level. The allocation of tax liabilities has detailed guidance from the Ministry of Finance; the specific allocation ratios and methods must be checked against the guidance in force at the time of declaration. If you need to determine exactly the declaration, payment and allocation obligations for your enterprise, 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% tax rates of a superseded law;
- Confusing “taxable income” with “revenue” when determining preferential rates by revenue;
- Failing to allocate tax liability to the locality where a manufacturing facility is located;
- Filing tax with the wrong directly managing tax authority.
How can ANT Legal help?
ANT Legal assists in reviewing the determination of taxable income, applicable tax rates, and the obligations to declare, pay and allocate corporate income tax under current regulations. For quick advice, you may contact our lawyers at 0966.475.966.
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