Corporate Income Tax (CIT) rates in Vietnam

Hi DMS Law office in Vietnam! Could you advise me about corporate income tax rates in Vietnam ? 

Hi!

Corporate Income Tax (CIT) rates in Vietnam:

The standard CIT rate (applicable from 01/01/2016) in Vietnam is 20%.

The CIT rates for oil and gas exploration and exploitation range from 32% to 50%;

The CIT rates for exploration and exploitation of precious natural mines range is 50% or 40% if prescribed conditions are met.

Corporate Income Tax (CIT) incentives:

Tax incentives are granted to new investment projects based on encouraged sectors, encouraged geographical areas and the size of projects.

CIT incentives include preferential tax rates, tax exemption and reduction periods.

Preferential tax rates in Vietnam:

Entities may be entitled to preferential tax rates of 10%, 15% or 17%,  subject to prescribed conditions, as follows:

Preferential tax rate of 10% for 15 years

The preferential tax rate of 10% for 15 years is applicable to corporate income earned from the implementation of new investment projects in:  geographical areas with particularly difficult economic-social conditions, economic zones, high-tech zones…., in the fields of scientific research and technology development, application of high-tech technologies, venture investment in development of high technologies and hi-tech enterprises…., investment in development water plants, power plants, water supply and drainage systems; bridges, roads, railways; airports, seaports, river ports; air fields, stations, production of software products; manufacture of composite materials, light building materials, precious materials; generation of renewable energies, clean energy and energy from the waste disposal; development of biotechnology….;

Based on the request of the Minister of Finance, The Prime Minister may decide to extend the preferential tax rate mentioned in this Clause may be extended but the extended period shall not exceed 15 years (Point c Clause 2 Article 19, Circular No. 26/2015/VBHN-BTC dated September 14, 2015. 

Preferential tax rate of 10% throughout the operation duration

The preferential tax rate of 10% throughout the operation duration is applicable to corporate incomes earned from: socialized education and training, job training, health care, culture, sports and environmental protection activities, judicial inspection (below referred to as socialized fields)...; incomes of publishing houses from publication activities in accordance with the Law on Publication…; incomes of press agencies from printed newspapers (including advertisements on printed newspapers) in accordance with the Press Law; incomes of enterprises from the implementation of projects on investment and trading in social houses for sale or lease to or hire-purchase by the objects specified in Article 53 of the Housing Law….; incomes of enterprises from the forest planting, tending and protection; agricultural cultivation, planting of forest trees and aquaculture in geographical areas with difficult socio-economic conditions…; incomes of cooperatives engaged in agriculture, forestry, fisheries or salt production and not located in geographical areas with difficult or particularly difficult socio-economic conditions.

Preferential tax rate of 15%:

The preferential tax rate of 15% is applicable to incomes of enterprises earned from cultivation, feeding, processing in agricultural and aquaculture fields located in geographical areas with difficult or particularly difficult socio-economic conditions.

Preferential tax rate of 17% throughout the operation duration

The preferential tax rate of 17% (from 01/01/2016) is applicable throughout the operation duration to people’s credit funds, cooperative banks and micro-finance institutions.

The duration to apply preferential tax rates

The duration to apply preferential tax rates specified in this Article shall be counted consecutively from the first year when enterprises generate revenue from new investment projects eligible for tax incentives. For hi-tech enterprises and agricultural enterprises applying high technologies, this duration shall be counted from the year when they are recognized as hi-tech enterprises or agricultural enterprises applying high technologies. For projects applying high technologies, this duration shall be counted from the year when they are granted certificates of projects applying high technologies (Clauses 1, 3 Article 11, Article 19, Circular No. 26/2015/VBHN-BTC, dated September 14, 2015).

Related topics:

Responsibility to submit VAT declaration in Vietnam

Conditions for input VAT deduction

Consulting services:

Phone: 0914 165 703 or email: dmslawfirm@gmail.com

Corporate Income Tax (CIT) rates in Vietnam