In this article, we will update Key Changes in Corporate Income Tax (CIT) applying from fiscal year 2025: CIT Law 2025 No. 67/2025/QH15 issued on 14Jun2025, Decree No. 320/2025/ND-CP issued on 15Dec2025 and Circular No. 20/2026/TT-BTC issued on 12Mar2026.
- Tax Incentives for SMEs:
- Rate 15% for enterprises with Revenue not exceeding 3billion VND.
- Rate 17% for enterprises with Revenue between 3billion VND and 50 billion VND.
- Standard Rate 20% for enterprises with Revenue exceeding 50 billion VND.
- Capital gain tax (CGT) declaration method
Foreign enterprises conducting direct and indirect capital transfers are subject to a deemed 2% tax rate on Transfer price. In many years, tax rate of transferring capital in Vietnam was 20% on profit (Transfer price- Purchase price- Transfer expenses).
- Foreign e-commerce and digital businesses pay CIT on income derived in Vietnam
Foreign companies engaged in e-commerce and digital-based businesses pay Vietnamese CIT on income derived in Vietnam, regardless of whether they have a permanent establishment in the country.
- CIT Exempted Profit:
- Profits from agriculture, forestry, fisheries and salt production;
- Profits from technology transfer;
- Profits from “green finance” and environmental instruments can be exempt from CIT where conditions in the Decree are met;
- Profits from the Government investment support fund
- Deductible and non-deductible expenses
There are adjustments of defining conditions and supporting documents for deductible and non-deductible expenses in which significant change is Noncash payment threshold. The VND 5 million threshold for mandatory noncash payment applies from the effective date of Decree 320/2025/ND-CP 15Dec2025 and is not retroactively applied to the entire 2025 tax year.