Corporate Income Tax in Vietnam
1 Executive Summary
The Corporate Income Tax (CIT) is applied with the general rate of 20% from the
beginning of 2016 (reduced from 22% which was applied from 1 January 2014 until
31 December 2015). A variety of tax reductions and –exemptions is applied
depending on the type and region of the investment.
2.1 General information
Corporate Income Tax is levied on the income of business organizations and
governed by the 2009 law on CIT, first amended on 16 June 2013 by Law
32/2013/QH13 and latest amended by Law 71/2014/QH13 dated 26 November
2014. The current tax rate applicable to corporate income is 20%.
In contrast to common tax systems, the Vietnamese law on CIT does not focus only
on corporate enterprises. Sole Proprietorships are also subject to CIT.
2.2 Tax liability
The law on CIT stipulates that any organization conducting activities of production,
business in goods and services that earns taxable income must pay corporate income
tax to the Vietnamese State. Whereas the term organization according to Article 2 of
the law on CIT comprises:
i. Enterprises established pursuant to the laws of Vietnam.
ii. Enterprises established pursuant to foreign laws doing business in Vietnam or
with a Vietnamese party regardless whether a permanent establishment in
Vietnam is constituted; this is subject to certain conditions.
iii. Enterprises established pursuant to the law on Co-Operatives.
iv. Professional entities established pursuant to the law of Vietnam.
v. Any other organization conducting activities of production or business that
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