A different perspective on Vietnam’s economy and doing business in Vietnam. Make sure to  subscribe.

how to guides

cheat sheets

snapshots

Corporate Income Tax in Vietnam 2024: Quick Read

This article is sponsored by: your accounting firm here→learn more


There are a number of taxes that foreign business owners in Vietnam should be aware of. One of these taxes is Vietnam’s corporate income tax which is particularly important for foreign firms looking to manufacture in Vietnam. With this in mind, this article runs through what this tax is, what it applies, and the key elements that apply to foreign business persons.

What is Corporate Income Tax in Vietnam?

Vietnam’s Corporate Income Tax–or CIT–is the tax applied to the profits of corporations operating in Vietnam. The details of this tax are outlined in the Law on Corporate Income Tax approved in January of 2023.

What is the CIT rate in Vietnam?

The standard tax rate in Vietnam is 20 percent per Article 10 of the Law on Corporate Income Tax, however, there are exceptions.

Firstly, the corporate income tax rate applicable to petroleum operations can range from 25 percent to 50 percent which will depend on what is negotiated when the project is approved. Similarly, the exploration and extraction of other natural resources can attract CIT rates of anywhere between 32 and 50 percent. This is set on a case-by-case basis.

Also of note, however, is that tax incentives in the form of a reduction in the corporate income tax rate for new businesses, are also common and can reduce a firm’s income tax liability considerably.

Corporate Income Tax Incentives in Vietnam

Foreign-invested manufacturing enterprises in Vietnam have historically been able to receive a number of corporate income tax incentives. The extent of these incentives largely varies depending on several criteria, however, most manufacturing firms generally qualify for a 10 percent CIT rate for the first 15 years. 

That said, many foreign firms also often qualify for a 50 percent CIT reduction for the first four years which can be extended up to 9 years in some circumstances.

Furthermore, it is not unusual for individual provinces to provide their own tax incentives as well and the national government often affords foreign firms additional tax discounts on an ad-hoc basis.

Top-up Tax

All of that said, in 2023, Resolution 107 was passed by Vietnam’s National Assembly in response to the OECD’s Global Minimum Tax initiative. This will see multinationals paying less than 15 percent tax, required to make up the difference in Vietnam. This is only a relatively new development and will likely have a substantial impact on the tax incentives outlined below. That said, the government has said that it intends to use the additional tax revenue to provide foreign firms with other benefits. As of December 2023, it was unclear what those alternative benefits might be.

When is corporate income tax paid?

The corporate income tax year follows the calendar year. A corporate income tax return needs to be filed no later than 90 days after the last day of the calendar year. 

Corporate income tax is, however, often required to be paid quarterly.

What’s next?

The introduction of the Global Minimum Tax has thrown a spanner in the works in terms of CIT breaks. That said, a new incentives scheme for foreign firms is in the works that will aim to substitute said tax breaks. This process, however, could be quite long with a number of drafts and feedback periods likely. With this in mind, firms considering starting a company in Vietnam can best keep abreast of the latest CIT developments by subscribing to the-shiv.

Last updated

June 8, 2024: Rewrote Corporate Income Tax Incentives in Vietnam for clarity, added a few more specifics.

share

get connected with an expert
contribute a guest post
send a letter to the editor
submit a press release

latest news

Vietnam-US Trade Tracker: May 2024 Update [data set]

The United States is the biggest buyer of Vietnam’s exports and together the two countries engage in over US$100 billion worth of trade each year. This tracker looks at what is imported from the US and exported to the US from Vietnam using the most recent data available.

Read More »

Proposal to increase foreign ownership limits in airlines in Vietnam rejected

The Vietnam airline industry has been struggling broadly as a result of government regulated ticket prices, increasing fuel costs, and a debt hangover from the COVID-19 pandemic when the industry more-or-less ground to a halt. Bamboo Airways, in particular, only took to the skies in 2019 the year before the pandemic broke out. It also started life as a subsidiary of FLC Group which has been heavily mired in controversy after its leader was arrested back in 2022. This saw the airline spun off but the new independent entity has never had much success and has repeatedly downsized its fleet and the number of routes it offers…

Read More »

Adidas, New Balance suppliers struggling to find workers in southern Vietnam

Some of the challenges raised in this article, with respect to hiring workers, is that workers have more job options other than factory work, workers no longer need to move to population centres with many manufacturing operations opening in tier two cities and provinces, and workers that moved back to their hometowns during the COVID-19 pandemic have still not returned on the back of the general uncertainty that the pandemic created.

Read More »

Korea’s Daewoo looking at making cars in Vietnam

Vietnam’s automotive industry is huge but dominated by motorcycles. That said, cars are becoming more popular with just shy of 5 million registered vehicles at the end of 2020. This does, however, represent just 5 percent of the population of 100 million people which means there is plenty of room for car sales to grow…

Read More »

Russian president could be in Vietnam next week: Reuters

Vietnam has remained cordially with Russia throughout the Ukraine War. The Southeast Asian nation is heavily dependent on Russia for its arms supplies but also has a strong bond with the country on account of their similar political pasts. This has seen Russian tourist arrivals grow by 80 percent in the first five months of this year over the first five months of 2023 and…

Read More »
Contents

advertising enquiry

submit a press release

Note that it will be marked as a press release/sponsored post.

guest post

We publish guest posts of 800 to 1000 words from experts who have something unique to say on topics relevant to our audience. 

get connected with an expert

letters to the editor

We review letters for quality and authority and generally only publish views that add to the discussion from experts in their field.