“
The current
standard CIT rate is
22 percent for both
domestic and foreign
invested enterprises.”
1.2 Corporate Income Tax
Corporate income tax (CIT) is a direct tax levied on the profits earned by companies or organizations.
In general, profits are considered gross revenue minus expenses. The Corporate Income Tax Law was
approved by the National Assembly on June 3, 2008 and came into effect on January 1, 2009. On June
19, 2013, law number 32/2013/QH13 Amending and Supplementing a Number of Articles of the Law was
approved and came into effect on January 1, 2014.
”
Taxpayers include business entities in all economic sectors, professional organizations, and foreign
corporations with production and trading activities in Vietnam. Individuals and families conducting
business are also subject to Personal Income Tax (PIT) (discussed later in the Personal Income Tax section).
CIT declaration and payment is required every three months and is compulsory at the end of the fiscal year.
Businesses
Income subject to CIT?
Income arising inside Vietnam
Income arising outside Vietnam
Local and foreign businesses established and
operating according to Vietnam’s Enterprise Law
Yes
Yes
Enterprises established under foreign laws with
Vietnam-based permanent establishments (e.g.,
branches, executive offices and factories)
Yes
Yes
Foreign enterprise without any Vietnam-based
establishment
Yes
No
Tax rates
The current standard CIT rate is 22 percent for both domestic and foreign invested enterprises. The CIT
rate will be reduced to 20 percent on January 1, 2016. For companies involved in seeking, exploring
and exploiting petroleum and gas and other precious natural resources, the CIT rate is between 32
percent and 50 percent depending on the project and business establishment.
For small and medium-sized enterprises (SMEs), defined in Vietnam as a company with a total annual
turnover not exceeding VND 20 billion, the CIT rate is 20 percent. Eligibility for this 20 percent tax
rate is judged by the turnover of the preceding year.
Taxable income
Taxable income includes income from production and/or trading of goods and provision of services,
as well as other incomes, including:
• Income from capital transfer and real estate transfer;
• Income from ownership of or rights to use assets;
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