Is a Cooperative’s Fruit Tree Income Subject to CIT?

Who must pay corporate income tax?

Under Article 2 of the Law on Corporate Income Tax 2025 (No. 67/2025/QH15, effective from 01/10/2025) on taxpayers as follows:

(1) Corporate income taxpayers are organizations engaged in production and business of goods and services with taxable income under this Law (hereinafter referred to as enterprises), including:

– Enterprises established under Vietnamese law;

– Enterprises established under foreign law (hereinafter referred to as foreign enterprises) with or without a permanent establishment in Vietnam;

– Organizations established under the Law on Cooperatives;

– Public service units established under Vietnamese law;

– Other organizations engaged in production and business with income.

(2) Enterprises with taxable income as provided in Article 3 of this Law must pay corporate income tax as follows:

– Enterprises established under Vietnamese law pay tax on taxable income arising in Vietnam and taxable income arising outside Vietnam;

– Foreign enterprises with a permanent establishment in Vietnam pay tax on taxable income arising in Vietnam and taxable income arising outside Vietnam related to the operations of that permanent establishment;

– Foreign enterprises with a permanent establishment in Vietnam pay tax on taxable income arising in Vietnam that is not related to the operations of the permanent establishment;

– Foreign enterprises without a permanent establishment in Vietnam pay tax on taxable income arising in Vietnam.

(3) A permanent establishment of a foreign enterprise is a production or business facility through which the foreign enterprise conducts part or all of its production and business activities in Vietnam, including:

– Branches, executive offices, factories, workshops, means of transport, oil fields, gas fields, mines or other natural resource extraction sites in Vietnam;

– Construction sites, construction, installation and assembly projects;

– Service provision facilities, including consultancy services through employees or other organizations or individuals;

– Agents for foreign enterprises;

– Representatives in Vietnam where the representative is authorized to sign contracts in the name of the foreign enterprise, or a representative not authorized to sign contracts in the name of the foreign enterprise but regularly delivering goods or supplying services in Vietnam.

How is the corporate income tax period determined?

Under Article 5 of the Law on Corporate Income Tax 2025 (No. 67/2025/QH15, effective from 01/10/2025) on tax periods as follows:

“1. The corporate income tax period is determined by calendar year or fiscal year, except as provided in Clause 2 of this Article.

2. The corporate income tax period per income occurrence applies to foreign enterprises as provided in points c and d, Clause 2, Article 2 of this Law.”

Is a cooperative’s income from fruit trees subject to corporate income tax?

Under Article 4 of the Law on Corporate Income Tax 2025 (No. 67/2025/QH15, effective from 01/10/2025) on tax-exempt income as follows:

– Income of cooperatives from cultivation, husbandry, aquaculture, processing of agricultural and aquatic products, and salt production; income of cooperatives operating in agriculture, forestry, fishery and salt production in areas with difficult or exceptionally difficult socio-economic conditions; income of enterprises from cultivation, husbandry, aquaculture and processing of agricultural and aquatic products in areas with exceptionally difficult socio-economic conditions; income from offshore fishing activities.

– Income from technical services directly serving agriculture.

– Income from scientific research and technology development contracts, products in trial production, and products made from new technology applied for the first time in Vietnam.

– Income from production and business of goods and services of enterprises with 30% or more of the average annual workforce being persons with disabilities, persons after drug rehabilitation, persons infected with the human immunodeficiency virus (HIV/AIDS), and with an average annual workforce of twenty or more persons, excluding enterprises operating in finance and real estate business.

– Income from vocational training activities exclusively for ethnic minorities, persons with disabilities, children in exceptionally difficult circumstances, and victims of social evils.

– Income distributed from capital contributions, joint ventures and associations with domestic enterprises, after corporate income tax has been paid under this Law.

– Sponsorship received for use in education, scientific research, culture, arts, charity, humanitarian and other social activities in Vietnam.

Accordingly, a cooperative’s income from fruit trees is tax-exempt and therefore not subject to corporate income tax.