Corporate Income Tax under Vietnamese Law

What is corporate income tax? How is corporate income tax calculated?

1. What is corporate income tax?

Under Article 3 of the Law on Corporate Income Tax 2025 (No. 67/2025/QH15, effective from 01/10/2025), taxable income is as follows:

– Taxable income includes income from production and business of goods and services and other income in Clause 2 of this Article.

– Other income includes: income from capital transfer and contributed capital right transfer; income from real estate transfer, investment project transfer, investment project participation right transfer, mineral exploration, exploitation and processing right transfer; income from asset use rights and asset ownership rights, including income from intellectual property rights as prescribed by law; income from asset transfer, lease and liquidation, including valuable papers; income from deposit interest, capital lending and foreign currency sales; receipts from bad debts written off and now recovered; receipts from unidentified payables; income from business of previous years omitted and other income.

A Vietnamese enterprise investing abroad that repatriates income after paying corporate income tax abroad to Vietnam: for countries with which Vietnam has signed a double taxation avoidance agreement, it is implemented under the agreement; for countries with which Vietnam has not signed a double taxation avoidance agreement, where the corporate income tax rate in the countries from which the enterprise repatriates is lower, the difference is collected against the corporate income tax calculated under Vietnam’s Law on Corporate Income Tax.

Accordingly, corporate income tax is a type of tax the state directly collects into the state budget, calculated on the taxable income of enterprises (organizations producing and trading goods and services).

2. 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), taxpayers are as follows:

– Corporate income taxpayers are organizations producing and trading goods and services with taxable income under this Law (hereinafter called enterprises), including:

+ Enterprises established under Vietnamese law;

+ Enterprises established under foreign law (hereinafter called 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 with production and business activities earning income.

– Enterprises with taxable income 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 activities 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 activities of the permanent establishment;

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

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

+ Branches, executive offices, factories, workshops, transport vehicles, oil fields, gas fields, mines or other natural resource exploitation sites in Vietnam;

+ Construction sites, construction projects, installation and assembly;

+ Service provision facilities, including consulting 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 the representative is not authorized to sign contracts in the name of the foreign enterprise but regularly delivers goods or provides services in Vietnam.”

Accordingly, assuming your company is established under Vietnamese law, your company falls within the category subject to corporate income tax.