Corporate Income Tax Exempt Income from Dec 15, 2025

Corporate Income Tax Exempt Income from Dec 15, 2025, is detailed in Decree 320/2025/ND-CP and the Law on Corporate Income Tax 2025. These tax incentives are crucial tools to support enterprise development. This article outlines the regulations on CIT exemption and reduction.

Cases of exemption and reduction of corporate income tax from December 15, 2025

Based on Article 4 of the Law on Corporate Income Tax 2025, there are 14 categories of exempt income:

1. Agriculture & Fishery: Income from fishing; production of crops/livestock/aquaculture/processing in specially difficult socio-economic areas; income of cooperatives from these activities and salt production.
2. Cooperatives: Income of agricultural/forestry/fishery/salt-making cooperatives in difficult or specially difficult areas.
3. Technical Services: Income from technical services directly serving agriculture.
4. R&D and Tech: Income from scientific research/tech development contracts; sale of products from new technologies applied for the first time in Vietnam; sale of experimental products (max exemption 3 years).
5. Social Enterprises: Income from businesses with 30%+ average employees being disabled persons, recovering addicts, or HIV/AIDS patients (min 20 employees, excluding finance/real estate).
6. Vocational Training: Income from vocational training for ethnic minorities, disabled persons, children in special circumstances, and social vice subjects.
7. Dividends: Income divided from capital contribution, share purchase, or joint ventures with domestic enterprises (after CIT has been paid).
8. Sponsorships/Grants: Sponsorships for education, culture, charity, scientific research; direct state budget support; state compensation.
9. Revaluation: Difference from asset revaluation for equitization of 100% state-owned enterprises.
10. Green Finance: Income from transfer of emission reduction certificates/carbon credits (first time); interest from green bonds; transfer of green bonds (first time).
11. State Tasks: Income of Vietnam Development Bank, VBSP, VAMC, and state financial funds operating not-for-profit.
12. Undistributed Income: Undistributed income of socialized establishments (education, health) retained for investment; indivisible funds of cooperatives.
13. Tech Transfer: Income from transferring priority technology to organizations/individuals in specially difficult areas.
14. Public Service Units: Income from providing basic/essential public services or services in specially difficult areas.

Other cases of exemption or reduction of corporate income tax according to Decree 320/2025

According to Article 21 of Decree 320/2025/ND-CP:

• Female Labor: Manufacturing/construction/transport enterprises employing many female workers receive a tax reduction equal to the additional expenditure for female labor.
• Ethnic Minority Labor: Tax reduction equal to additional expenditure for ethnic minority labor (training, housing, insurance).
• Tech Transfer: 50% CIT reduction on income from transferring priority technology to difficult areas.
• Household to Enterprise Conversion: SMEs converted from household businesses are CIT exempt for 02 years from the date of taxable income generation.
• Science & Tech Organizations: Exemption for certain public science/tech organizations and universities.

>>> See more: 2025 Corporate Income Tax Rate Changes

Conditions for businesses to enjoy corporate income tax incentives from December 15, 2025, according to Decree 320/2025/ND-CP.

According to Article 23 of Decree 320/2025/ND-CP:

1. Separate Accounting: Enterprises must separately account for income from incentive-eligible activities and non-eligible activities.
2. Best Option: If eligible for multiple incentives for the same income, the enterprise chooses the most beneficial one.
3. Timing: Incentives apply from the time of licensing or investment registration. If laws change, enterprises can choose to continue old incentives or switch to new ones for the remaining period.
4. New Projects: For new projects with <12 months of revenue in the first year, enterprises can choose to apply incentives immediately or from the next tax year.
5. Inheritance: Enterprises formed from restructuring (merger, division, conversion) inherit existing incentives if conditions are still met.
6. Non-compliance: If conditions are not met in a tax period, incentives do not apply for that period (standard rate applies).

>>>See more: When do businesses receive preferential corporate income tax rates?

Preferential corporate income tax rates:

According to Article 11 of Decree 320/2025/ND-CP:

• Standard Rate: 20%.
• SME Rates:
  • 15%: Annual revenue $\le$ 3 billion VND.
  • 17%: Annual revenue > 3 billion VND but $\le$ 50 billion VND.
• Resource Extraction: 25% – 50% (Oil, gas, rare resources).
  • 50%: Exploration/extraction of rare resources (gold, silver, gems, etc.).
  • 40%: If 70% of the mine area is in specially difficult areas.

Taxable income for corporate income tax

Taxable income includes income from production, business, and other income (capital transfer, real estate transfer, project transfer, asset liquidation, interest, etc.).

• Foreign Enterprises: Income originating in Vietnam is taxable regardless of business location.
• Overseas Investment: CIT paid abroad can be deducted from CIT payable in Vietnam (not exceeding the Vietnam tax amount).
• Global Minimum Tax: Additional CIT paid for Global Minimum Tax (IIR) is deductible from CIT payable in Vietnam.

Frequently Asked Questions about Income Exempt from Corporate Income Tax

Understanding tax-exempt income for corporate income tax can raise many questions, and below are some frequently asked questions for your reference:

What is the CIT tax period?

It follows the calendar year or the fiscal year chosen by the enterprise. (Legal Basis: Article 5, Law on CIT 2025).

Are welfare expenses deductible?

Yes, provided they do not exceed 01 month’s average actual salary in the tax year. (Legal Basis: Point d, Clause 4, Article 10, Decree 320/2025/ND-CP).

What is the duration of incentives?

Typically 10 to 15 years, including tax exemption for 2-4 years and 50% reduction for the subsequent 4-9 years. (Legal Basis: Article 14, Law on CIT 2025).

How is annual revenue determined for SME rates?

It is the total proceeds from sales/services.

• Deduction Method: Revenue excludes VAT.
• Direct Method: Revenue includes VAT. (Legal Basis: Article 8, Decree 320/2025/ND-CP).

Conclusion

Understanding Corporate Income Tax Exempt Income from Dec 15, 2025 helps optimize financial obligations. Long Phan Consulting Company is committed to accompanying clients in legal compliance. Please contact Hotline 1900636389 for immediate support.