Vietnam corporate tax rate, incentives, filing dates, and compliance explained

Why expand to Vietnam?

Thanks to its economic and political stability and strategic location, Vietnam has cemented its position as a top business destination. For companies looking to expand into Southeast Asia, Vietnam presents a strong alternative to China with its manufacturing prowess, large workforce, rapidly growing domestic market, and accessibility to major trade routes.

Furthermore, Vietnam actively encourages foreign investment through corporate income tax incentives, free trade agreements, regulatory support, and other business-friendly policies. Its second-place finish in the 2025 Asia Manufacturing Index is a testament to its business acumen. And, its assurance of a record 10% GDP growth in 2026 (from 8% in 2025) shows its confidence.

While there's no doubt that Vietnam is a top attraction for foreign companies, a successful foray into this dynamic market requires a deep understanding of its corporate tax system.

Vietnam corporate tax

All enterprises established under Vietnamese laws are subject to corporate income tax at the rate of 20%, and it applies equally to domestic and foreign-invested enterprises.

Vietnam applies a source-based taxation system. Accordingly:

• Vietnamese tax-resident enterprises are taxed on their worldwide income.
  
• Foreign enterprises with a permanent establishment (PE) in Vietnam are taxed on income attributable to that PE and derived from Vietnam.
  
• Foreign enterprises without a PE are taxed only on Vietnam-sourced income, typically through withholding mechanisms such as foreign contractor tax.
  

Certain enterprises are eligible for statutory reduced corporate income tax rates or tax incentives, depending on their size, industry, location, or investment characteristics.

Tax administration and enforcement are overseen by the General Department of Taxation (GDT) under the Ministry of Finance.

Vietnam corporate tax rates and structures

Under the Law on Corporate Income Tax, effective from 1 October 2025, Vietnam introduced a tiered statutory CIT rate system based on annual revenue, marking a structural shift in how small and medium-sized enterprises are taxed.

The applicable corporate income tax rates are as follows:

• 15% CIT rate for micro-enterprises with total annual revenue not exceeding VND 3 billion
  
• 17% CIT rate for small enterprises with total annual revenue above VND 3 billion and up to VND 50 billion
  
• 20% CIT rate for all other enterprises
  

These rates are statutory corporate income tax rates, not temporary incentives or tax holidays. Eligibility is subject to conditions set out in the law and its implementing regulations, including anti-avoidance provisions for related-party structures.

In addition to these standard rates, preferential CIT rates of 10% or 17% may apply to qualifying investment projects in encouraged sectors or locations, such as high technology, software production, research and development, manufacturing, and infrastructure development. These preferential rates typically apply for a fixed incentive period, after which the standard rate applies.

Higher corporate income tax rates apply to certain extractive industries:

• Oil and gas operations are subject to CIT rates ranging from 25% to 50%, depending on the project.
  
• Mineral prospecting, exploration, and exploitation activities may be subject to CIT rates between 40% and 50%.
  

What is taxable income?

In Vietnam, taxable income comprises income from the production and trading of goods and services and from other sources, such as capital and real estate transfers, ownership, leasing, or liquidation of assets, interest on loans or deposits, recovery of bad debt, etc.

Certain business expenses are deductible, such as:

• Startup expenses
  
• Bad debts
  
• Interest expenses
  
• Depreciation and amortisation costs (to an extent)
  
• Net operating losses can be carried forward for five years.
  

However, some expenses are non-deductible, such as:

• Fines and penalties
  
• Taxes
  
• Employee remuneration expenses that aren't paid or stated in labour contracts
  
• Staff welfare expenses exceeding a specific limit
  
• Severance allowance payments exceeding prescribed amounts under the Labour Code
  
• Service fees that don't meet certain conditions.
  

Certain types of income are altogether exempt from corporate income tax, such as:

• Income from agricultural activities
  
• Income from technical services directly linked to agricultural production
  
• Income from scientific research and technological development contracts
  
• Income from business activities reserved for employees with disabilities, employees with HIV, or reformed addicts
  
• Income from occupational training activities reserved for ethnic minorities, people with disabilities, children living in difficult conditions, and reformed offenders
  
• Expenses related to hiring women by enterprises engaged in manufacturing, construction, and transport.
  

Historical tax rates and recent reforms

Vietnam’s corporate income tax regime has undergone sustained reform over the past two decades. The standard CIT rate has progressively declined from 35% in 1998 to 28% in 2004, 25% in 2009, and ultimately to 20% in 2016, where it remains today.

The 2025 Law on Corporate Income Tax represents the most significant reform in recent years. Key changes include:

• Preferential CIT rates for small and micro enterprises (mentioned above).
  
• Additional preferential tax rates of 10%, 15%, and 17% (mentioned above).
  
• Changes to the taxation policy of foreign enterprises with/without PE (also mentioned above).
  
• Additions to the list of corporate tax-exempt income, such as income from the implementation of innovation and digital transformation activities, funds received for scientific research, technology development, innovation, and digital transformation, government grants, etc.
  
• Additions to the list of deductible expenses, such as contributions to public infrastructure development, expenses incurred on reducing greenhouse gas emissions, etc.
  
• Additions to the list of non-deductible expenses, such as costs not meeting the requirement for payments under relevant laws, interest on loans paid to non-credit institutions above a prescribed cap, etc.
  

Also in 2025, Vietnam joined a growing list of countries to have implemented the 15% global minimum tax. This tax requires all constituent entities of a multinational enterprise with consolidated revenue of at least EUR 750 million to pay a minimum 15% top-up tax, even if they're eligible for reduced tax rates under double taxation agreements, tax holidays, or other tax incentives.

Tax incentives and exemptions

Vietnam offers two types of corporate income tax incentives—reduced rates for a given period or for the duration of a project, and tax holidays—usually centred around encouraged sectors and locations.

Some major tax incentives include:

• Tax exemption up to 4 years and 50% reduction up to 9 subsequent years in the high-tech, software, and renewable energy sectors.
  
• Tax exemption up to two years and 50% reduction up to 4 subsequent years for new investment projects in priority industries.
  
• Large or R&D projects may be eligible for a 5% CIT rate for 37 years, a tax exemption for 6 years and a 50% reduction for the next 13 years.
  

Generally, eligible companies can avail of preferential tax rates of 10% for 15 years or 17% for 10 years.

Encouraged sectors include education, healthcare, high tech, infrastructure development, software production, etc.

Encouraged locations include high-tech zones, high-tech agricultural zones, and places designated as difficult socio-economic areas.

Furthermore, Vietnamese companies with earnings from overseas investment receive a foreign tax credit on corporate income tax paid in a foreign country. The credit cannot exceed the corporate tax amount payable in Vietnam.

When to file tax returns

The standard tax year in Vietnam is the same as the calendar year, although companies are free to pick a different year-end with the tax authorities' approval.

Companies are required to file their annual corporate tax returns by the end of the third month following the end of the tax year. The return must be accompanied by audited financial statements.

Quarterly provisional tax payments are mandatory, to be paid by the 30th day of the next quarter. The total provisional payment must not be less than 80% of the annual tax liability. Any final payment, if required, must be made by the tax filing deadline. Payments must be in VND.

Reducing tax burden with double taxation agreements

Foreign companies can significantly lower their tax burden in Vietnam under the provisions of a double taxation agreement (DTA). Vietnam has DTAs with more than 80 countries, including Singapore. These tax treaties are primarily aimed at helping companies with cross-border operations avoid paying tax on the same income in two jurisdictions.

To avail of tax relief under a DTA, foreign corporations must submit an application to the Vietnamese tax authorities 15 days before the tax is due.

As Vietnam doesn't levy corporate income tax on dividends, it doesn't provide tax relief on dividend income under DTAs. However, income from interest and royalties, usually taxed at 5% and 10%, might receive a tax exemption or reduction under a tax treaty.

Under the Singapore-Vietnam double taxation agreement, a Singapore company with a PE in Vietnam will pay corporate income tax in Vietnam on profits attributed to its PE but receive a tax credit in Singapore on the taxes paid in Vietnam.

Under this specific treaty, withholding tax on interest is capped at 10%, with interest arising in one contracting state and paid to the government of the other contracting state, receiving a tax exemption in the first state.

Similarly, withholding tax on royalties is capped at 5% with respect to patents, designs, secret formulas, processes, or equipment, and 15% for all other royalties.

Other taxes in Vietnam

Apart from corporate income tax, foreign companies need to be vigilant about paying the following taxes to maintain tax compliance in Vietnam:

VAT

Goods and services used for production, trading, and consumption attract value-added tax (VAT). In Vietnam, VAT is either zero-rated (exports), a reduced rate of 5% (essentials), or a standard rate of 10%.

The standard rate has also been reduced and is effectively 8% till 2026. Certain goods or services are exempt from VAT, including life insurance, public transport, transfer of technology, intellectual property rights transfer, etc. Companies subject to VAT must also file monthly VAT returns (quarterly for small businesses).

Foreign contractor tax

This is a type of withholding tax on large payments from companies in Vietnam to foreign contractors without a licensed presence in the country. Under this system, foreign contractors can opt to have CIT and VAT withheld by the contracting company in Vietnam at stipulated rates, or pay CIT at the standard 20% rate on net profit earned from the contract, along with VAT, or pay VAT through the first method and CIT through the second method.

Special sales tax

This is an excise tax applicable to certain goods manufactured in or imported into Vietnam, such as cigarettes, spirits, automobiles, airplanes, petrol, etc. Tax rates range from 5% to 150%.

Customs duties

A combination of import duty and import VAT is applicable on most imports, unless exempt. Preferential rates might apply under free trade agreements.

Property taxes

Foreign investors are required to pay rental fees for land use rights, with rates depending on location, infrastructure, and industry.

Green tax

These include a natural resource tax (1%-40%) on the extraction of resources like petroleum or seafood, and an environmental protection tax on the production and import of goods deemed harmful to the environment.

Tax compliance and registration

• Foreign companies must apply to the Department of Planning and Investment for an investment registration certificate as well as an enterprise registration certificate (the latter serves as a tax identification number).
  
• The next step is to set up an online tax account with the Tax Department through its online tax portal.
  
• Once a company is ready to pay corporate income tax, it must remember the deadline for filing tax returns, which is within 90 days of the end of the tax year.
  
• Corporate tax payments must be made provisionally in four instalments within 30 days of the end of each quarter. These four instalments must cover at least 80% of the company's annual tax liability. Any pending payment must be made at the time of filing returns.
  
• If a company is subject to VAT, it must remember to file monthly returns (quarterly if it is a small business).
  
• Companies are advised to always remain audit-ready by maintaining accurate records. Tax authorities in Vietnam are especially attentive to transfer pricing and documentation of expenses.
  
• Paying taxes and filing returns on time is crucial to avoiding late penalties, interest charges, and criminal action.
  

How Aspire can help your expansion into Vietnam

Entering a new market is fraught with challenges, even with the best plans in place. Aspire not only makes the transition smoother but gives wings to expansion strategies with its array of financial services, including:

• A multi-currency business account that lets you transfer funds in 30+ currencies across more than 130 countries. It comes with unlimited virtual corporate cards, the most competitive FX rates in the market, and transparent and low pricing that's hard to beat.
  
• A global payments platform that allows you to make same-day transfers in 15+ currencies, so you never miss a payment.
  
• Easy accounting integrations that automate your book-keeping, help you connect payroll to Aspire and gain access to a variety of payment gateways. With Aspire optimising workflows, you can focus on what matters most – growing your business in a new country.
  

Frequently asked questions

Is Vietnam a high-tax country?

With a corporate income tax rate of 20%, Vietnam is not considered a high-tax country. Its CIT rate is consistent with the Southeast Asian average.

What is the corporate income tax rate in Vietnam?

The standard corporate income tax rate in Vietnam is 20%, but eligible businesses can avail of reduced rates of 10%, 15%, and 17%.

Can foreigners own 100% of a business in Vietnam?

Yes, Vietnam permits 100% foreign ownership of a business in sectors such as manufacturing, IT, education, and so on. However, some sectors—agriculture, telecommunications, entertainment, travel and tours, etc—allow foreign investment only through a joint venture with a local business partner.

Which country has 0 percent corporate tax?

Various countries and territories have 0% corporate tax, such as Bahrain, the Bahamas, the British Virgin islands, and the Cayman Islands, to name a few.

Is Vietnam a tax haven?

While it offers multiple tax incentives, Vietnam is not considered a tax haven.