Vietnam issues Decree 320/2025/ND-CP, regulating Corporate Income Tax 2025 rules, including progressive rates, capital transfer tax, R&D incentives, SME relief, and new investment incentives.
The Government of Vietnam has issued Decree No. 320/2025/ND-CP on 15 December 2025, regulating the implementation of the Law on Corporate Income Tax 2025 (Law No. 67/2025/QH15), which entered into force on 1 October 2025.
The Decree relates to significant reforms affecting enterprises, foreign investors, and small and medium‑sized enterprises.
CIT tax rates
The Decree outlines a progressive tax structure based on annual revenue, setting a standard rate of 20%, a reduced rate of 17% for enterprises with annual revenue between VND 3 billion and VND 50 billion, and 15% for small enterprises with annual revenue not exceeding VND 3 billion. Additionally, a higher rate ranging from 25% to 50% applies specifically to oil, gas, and rare resource exploration and extraction.
Capital transfers
Foreign corporate investors are now subject to a flat 2% tax on the value of capital transfers, replacing the previous 20% tax on net profit. This new rule applies to both direct and indirect transfers, including those involving offshore entities. Exemptions are available for intra‑group restructuring transactions, provided that the restructuring does not alter the ultimate parent company and does not generate taxable income.
Pillar 2 and foreign tax credit
Enterprises subject to additional tax under the Income Inclusion Rule may deduct this amount from corporate tax payable in Vietnam, but the combined deduction for IIR and foreign tax credits cannot exceed the total corporate tax liability.
Loss carry-forward
If an enterprise incurs a loss after settling its taxes, it can carry that loss forward to offset taxable income in future years. However, the loss must be applied consecutively and cannot be carried forward for more than five years.
Deductible expenses
The threshold for requiring non‑cash payment vouchers has been reduced from VND 20 million to VND 5 million per transaction, with multiple purchases from the same supplier in one day also requiring non‑cash documentation if they total VND 5 million or more. Enterprises must adjust deductible expenses if accrued costs are later paid without proper vouchers. Deductible contributions for voluntary pension or life insurance have been raised to VND 5 million per employee per month, and expenses paid by employees using personal non‑cash methods are deductible if reimbursed with proper authorisation.
Research and development
The Decree strengthens incentives for research and development. Enterprises may deduct up to 200% of actual R&D costs, provided the deduction does not result in a tax loss.
Loss offsetting
Losses from real estate transfers cannot be offset against incentivised business income, though they may be offset against non‑incentivised activities. Losses from mining exploration or exploitation rights must be calculated separately and cannot be offset against other operations.
Investment incentives
New sectors eligible for incentives include semiconductor chips, AI data centers, and digital technology services. Industrial parks are no longer automatically eligible. Income from products manufactured using new technology applied for the first time in Vietnam is exempt from corporate income tax for three years. Expansion projects may qualify for incentives if they meet specific criteria related to increased capital or capacity.
SME tax rates
Reduced tax rates of 15% for enterprises with revenue under VND 3 billion and 17% for those with revenue between VND 3 billion and 50 billion are confirmed. These rates do not apply to subsidiaries or affiliates of larger enterprises. Revenue thresholds are determined based on prior year finalisation, annualised figures for partial‑year operations, or estimated revenue for newly established businesses.
Simplified tax calculation
For enterprises with annual revenue not exceeding VND 3 billion, simplified tax rates based on revenue apply. Rates are set at 0.3% for distribution and supply of goods, 1.2% for production, transport, services with goods, and construction with raw materials, 1.5% for services and construction without materials (rising to 4% for asset leasing and agency services), 4% for digital content such as games, movies, music, and advertising, and 0.5% for other activities.
Effective dates and transitional rules
The Decree takes effect on 15 December 2025. Taxpayers may apply the new rules from the beginning of the 2025 tax period, from 1 October 2025 when the Law itself took effect, or from 15 December 2025 when the Decree entered into force. However, the provisions on capital transfers and non‑cash payment vouchers apply strictly from 15 December 2025.
Earlier, Vietnam’s National Assembly passed Law No. 67/2025/QH15 on 14 June 2025 , a major amendment to the Corporate Income Tax (CIT) Law, introducing sweeping changes to taxpayer definitions, tax rates, deductible expenses, and incentive regimes.
