Decree regulates corporate income tax incentives

According to a newly issued decree from the Government, a preferential corporate income tax is available for a number of businesses.

Under Decree 320/2025/ND-CP detailing the implementation of the Law on Corporate Income Tax, the standard corporate income tax (CIT) rate is 20 percent, except for specific cases and cases eligible for the preferential rates.

Specifically, a CIT rate of 15 percent applies to enterprises with a total revenue in the preceding year of not more than VND 3 billion (USD 114,000), while a CIT rate of 17 percent applies to enterprises with a total revenue in the preceding year of over VND 3 billion but not more than VND 50 billion.
 

Total revenue used as the basis for determining eligibility for the above-mentioned 15 percent and 17 percent tax rates includes total revenue from sales of goods and provision of services (excluding revenue deductions), revenue from financial activities and other income according to the enterprise’s business result statements.

The new decree also regulates deductible expenses in determining taxable income for CIT.

Deductible expenses in determining taxable income for CIT include expenses for the purchase of goods, services and other payments of VND 5 million or more per transaction with non-cash payment documents.

Expenses that can be deducted also include market research costs; research costs for products and services serving the development of new products and services; and investment costs for projects to develop new products and services that are unsuccessful or must be discontinued.

Deductible expenses are also recognized for output VAT on goods given as gifts to customers free of charge.

- (VNS/VLLF)