OVERVIEW 

The National Assembly of Vietnam officially passed the new corporate income tax (CIT) law on 14 June 2025^[1]. This new CIT law is set to take effect from 1 October 2025 and is applicable from the tax year 2025.  
 
Primary CIT incentives under the new CIT law are as follows:

1. Sector-based CIT incentives

Several sectors are eligible for CIT incentives (subject to conditions), such as:

• High-tech application, high-tech development venture capital; strategic technology application; high-tech incubation, high-tech business incubation; investment in construction/business of high-tech incubation facilities, high-tech business incubation.
• High-tech enterprises, high-tech applied agricultural enterprises; science and technology enterprises.
• Software product manufacturing; network information security products and services; key digital technology products and services; manufacture of electronic equipment under the law provisions on digital technology industry.
• Research & development, design, production, packaging, testing of semiconductor chip products; construction of artificial intelligence data centers.
• Production of priority supporting industrial products (e.g., serving high-tech, serving production of products in textile - garment, leather - footwear, electronics - information technology industries (including semiconductor design and manufacturing), automobile manufacturing/ assembly, etc.).
• Production of renewable energy, clean energy, energy from waste disposal; environmental protection.
• Production of high-grade steel; production of energy-saving products.
• Automobile manufacturing/assembly; manufacturing of other digital technology products.

2. Location-based CIT incentives

The key notable change is the removal of industrial zones from the list of incentivized locations, implying that new investment projects or business expansions in these zones will generally not be entitled to location-based CIT incentives.

3. CIT incentives for expansion investment projects

Several notable points include:

• If a currently operating project is still entitled to a tax incentive, an additional income from a qualified expansion investment project shall enjoy the same tax incentive as applicable to the currently operating project for the remaining period.
• If the currently operating project no longer has any tax incentive and incurs an additional income from a qualified expansion investment project, such additional income can be entitled to the CIT holiday scheme (tax exemption years followed by tax reduction years). The law allows the CIT holiday scheme applied to this qualified expansion project to be the same as if the qualified expansion investment project was a completely qualified new investment project.
• In principle, the CIT holiday in this case will be triggered from the year the investment project fulfills the registered investment capital disbursement.

4. CIT incentive applications and transitional clauses

Several notable points include:

• The current standard CIT rate is 20%. CIT incentives could include the preferential CIT rate (e.g., 10%, 15% and 17% CIT rate) and CIT holiday (certain years of CIT exemption following by a number of years of 50% CIT reduction), subject to meeting the incentivized conditions. 
• At the same time, if an enterprise is entitled to different tax incentives according to the provisions of this Law for the same income, the enterprise may choose to apply the most favorable tax incentive.
• Enterprises can opt to apply CIT incentives based on the CIT provisions at the licensing time or based on the new CIT regulations (if qualified) for the remaining period. 
• If an investment project is entitled to CIT incentives based on the new CIT Law (and not yet entitled to CIT incentives based on previous CIT regulations), it can be entitled to CIT incentives under the new CIT law from the tax year 2025 for the remaining period.
• If there are differences between this new CIT law and other laws regarding tax incentives, the rules in the new CIT law will apply—unless the Law on Capital or special resolutions approved by the National Assembly say otherwise.

Further guidance is expected via the upcoming decree and circular.

HOW BUSINESS SHOULD PREPARE

This legislative update marks a significant shift in Vietnam’s CIT incentive framework, directly impacting investment planning and compliance strategies. Businesses should proactively assess how their current and future projects align with the revised CIT incentive rules to identify risks and maximize potential benefits. Strategic review of all CIT incentive schemes—whether for new ventures or expansions—will be essential to safeguard compliance, optimize tax positions, and support long-term financial planning.

HOW CAN A&M HELP?

To support your business in navigating these developments, we are available to further discuss the implications of these evolving CIT incentives in Vietnam and can provide more information.

Our A&M Vietnam Tax team stands ready to support enterprises in adapting to the new regulations, especially on CIT incentive schemes.

The A&M Vietnam Tax team is closely monitoring these developments and is ready to assist in:

• Reviewing CIT incentives for new or expansion investment projects.
• Advising CIT incentives possibility for new or expansion investment projects.
• Supporting tax compliance readiness ahead of the implementation in October 2025. 

Please contact us if you would like to discuss how these changes may impact your investments in Vietnam. 

[1] Luật số 67/2025/QH15 của Quốc hội: Luật Thuế thu nhập doanh nghiệp