| NATIONAL ASSEMBLY OFFICE | THE SOCIALIST REPUBLIC OF VIETNAM |
| No. 01/VBHN-VPQH | Hanoi, January 30, 2023 |
Pursuant to the Law on Corporate Income Tax No. 14/2008/QH12 dated June 3rd 2008 of the National Assembly of Vietnam, effective from January 1st 2009, amended by:
1. Pursuant to the Law No. 32/2013/QH13 dated June 19th 2013 on amendments to some Articles of the Law on Corporate Income Tax, effective from January 1st 2014;
2. Pursuant to the Law No. 71/2014/QH13 dated November 26th 2014 of the National Assembly of Vietnam amending some Articles of tax laws, effective from January 1st 2015;
3. The Law on Investment No. 61/2020/QH14 dated June 17th 2020, effective from January 1st 2021;
4. The Law on Petroleum No. 12/2022/QH15 dated November 14th 2022 of the National Assembly of Vietnam, effective from July 1st 2023;
5. The Law on Medical examination and treatment No. 15/2023/QH15 dated January 9th 2023 of the National Assembly of Vietnam, effective from January 1st 2024.
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10;
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This Law provides for corporate income taxpayers, taxable incomes, tax-exempt incomes, tax bases, tax calculation methods, and tax incentives.
1. Taxpayers are organizations earning taxable income from goods production and/or service provision production as prescribed by this Law (hereinafter referred to as "enterprises", including:
a) Enterprises established under Vietnamese law;
b) Enterprises established under foreign laws (hereinafter referred to as "foreign enterprises") with or without Vietnam-based permanent establishments;
c) Organizations established under the Law on Cooperatives;
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dd) Other organizations earning income from production and business operation.
2. Enterprises having taxable incomes under Article 3 of this Law shall pay corporate income tax as follows:
a) Enterprises established under Vietnamese law shall pay tax on taxable incomes generated in and outside Vietnam;
b) Foreign enterprises with Vietnam-based permanent establishments shall pay tax on taxable incomes generated in Vietnam and taxable incomes generated outside Vietnam which are related to the operation of such establishments;
c) Foreign enterprises with Vietnam-based permanent establishments shall pay tax on taxable incomes generated in Vietnam which are not related to the operation of such permanent establishments;
d) Foreign enterprises without Vietnam-based permanent establishments shall pay tax on taxable incomes generated in Vietnam.
3. The permanent establishments of a foreign enterprise are the places through which the foreign enterprise carries out part or the whole business in Vietnam, including:
a) Branches, executive offices, factories, workshops, means of transport, oil fields, gas files, miles or other natural resource extraction sites in Vietnam;
b) Construction sites;
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d) Agents of foreign enterprises;
e/ Vietnam-based representatives, in case of representatives which are competent to conclude contracts in the name of foreign enterprises or representatives which are incompetent to conclude contracts in the name of foreign enterprises but regularly deliver goods or provide services in Vietnam.
1. Taxable incomes include income from goods and service production and business activities and other incomes specified in Clause 2 of this Article.
2. Other incomes include: income from transfer of capital, transfer of the right to capital contribution; income from real estate transfer, transfer of construction projects, transfer of the right to participate in construction projects, transfer of the right to mineral exploration, mineral extraction, and mineral processing; income from the right to enjoyment of property, right to ownership of property, including income from intellectual property rights defined by law; income from transfer, lease, liquidation of assets, including valuable papers; income from deposit interest, loan interest, sale of foreign exchange; collection of debts that were cancelled; receipts from debts without creditors; incomes from business operation in previous years that were committed, and other incomes.
With regard to Vietnamese companies making investments in the countries with which Vietnam have Double Taxation Agreement and transfer incomes exclusive of corporate income tax paid overseas to Vietnam, regulations of such Double Taxation Agreements shall apply. If investments are made in countries with which Vietnam has not had Double Taxation Agreements, and if corporate income tax incurred in such countries is lower than that imposed by the Law on Corporate income tax of Vietnam, the tax difference shall be paid.
1. Income from farming, breeding, cultivation and processing of agriculture and aquaculture products, salt production of cooperatives; income of cooperatives engaged in agriculture, forestry, aquaculture, or salt production in disadvantaged areas or extremely disadvantaged areas; income of companies from farming, breeding, cultivation and processing of agriculture and aquaculture products in disadvantaged areas; income from marine fisheries.
2. Income from the application of technical services directly for agriculture.
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4. Incomes from production and sale of goods and services of enterprises that have at least 30% of the employees are disabled people, detoxified people, suffers of HIV/AIDS, and have at least 20 employees, except for enterprises engaged in finance and real estate business.
5. Income from job-training activities exclusively reserved for ethnic minority people, the disabled, children in extremely disadvantaged circumstances and persons involved in social evils.
6. Incomes distributed for capital contribution, joint venture or association with domestic enterprises, after corporate income tax has been paid under the provisions of this Law.
7. Received donations used for educational, scientific research, cultural, artistic, charitable, humanitarian and other social activities in Vietnam.
8. Incomes from the transfer of Certified Emissions Reductions (CERs) of enterprises issued with CERs.
9. Incomes from the performance of tasks of the Vietnam Development Bank, which are assigned by the State, in credit for development and export; incomes from granting credit to the poor and beneficiaries of policies of Vietnam Bank for Social Policies; incomes of state financial funds and other state funds serving non-profit purpose incomes of organizations, of which 100% charter capital is possessed by the State, that are established by the Government to settle bad debts of Vietnamese credit institutions.
10. The undistributed part of income of medical establishments retained for investment in development of those medical establishments; the undistributed part of income of private health facilities which are not medical establishments providing medical examination and treatment services, and the undistributed part of income of private facilities in the education – training, other sectors needing the private-sector involvement that is retained to invest in those facility’s development in accordance with laws on education – training, health, and other sectors needing the private-sector involvement; the undistributed part of income forming assets of cooperatives that are established and operated in accordance with the Law on Cooperatives.
11. Incomes from transfer of technologies that are prioritized to be to organizations and individuals in extremely disadvantaged areas.
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2. Separately incurred corporate income tax shall be declared in accordance with Point c and Point d Clause 2 of this Law.
TAX BASES AND TAX CALCULATION METHODS
Tax bases include assessable income and tax rate.
Article 7. Determination of assessable income
1. Assessable income in a tax period is the taxable income minus tax-exempt incomes and losses carried forward from previous years.
2. Taxable income is revenue minus deductible expenses for production and business activities plus other incomes, including income received outside Vietnam.
3. Incomes from transfers of real estate, project of investment, the right to participate in projects of investments, the right to explore, extract, and process minerals must be separated. The loss on transfers of projects of investment (except for mineral exploration and mineral extraction projects), incomes from transfers of the right to participate in projects of investment (except for transfer of the right to participate in mineral exploration and mineral extraction projects), losses on transfer of real estate (if any) shall be offset against the profit in the tax period.
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Revenue is the total sales, processing remuneration, service provision charges, subsidies and surcharges enjoyed by enterprises. Revenue is expressed as Vietnam dong (Vietnam); foreign currency revenue, if any, must be converted into VND at the average exchange rate on the inter-bank foreign currency market announced by the State Bank of Vietnam at the time foreign-currency revenue is generated.
The Government shall elaborate this Article.
Article 9. Deductible and non-deductible expenses upon determination of taxable incomes
1. Except for the expenditures mentioned in Clause 2 of this Article, all expenditures are deductible when calculating taxable income if they meet the conditions below:
a) Actual expenditures on business operation of the enterprise; expenditures on vocational education; expenditures on the enterprise's national defense and security duties as prescribed by law;
b) Expenditures that have adequate invoices and documents according to law. The invoice for any purchase of goods or services of at least 20 million VND must be enclosed with proof of cashless payment, except for the cases in which proof of cashless payment is not required by law.
2. Non-deductible expenses upon determination of taxable incomes include:
a) Expense not fully satisfying the conditions specified in Clause 1 of this Article, except the uncompensated value of losses caused by natural disasters, epidemics or other force majeure circumstances;
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c/ Expense already covered by other funding sources;
d/ Business administration expense allocated by foreign enterprises to their Vietnam-based permanent establishments in excess of the level calculated according to the allocation method prescribed by Vietnamese law;
e/ Expense in excess of the law-prescribed norm for the deduction and setting up of provisions;
e) The expenditure on interest on loans that are not given by credit institutions or economic organizations and exceed 150% of basic interest rates announced by the State bank of Vietnam when the loan is taken.
g) Improper depreciation of fixed assets;
h) Improper prepaid expenses;
i) Wages and remunerations of owners of sole proprietorships; wages of founders that do not participate in business management; wages, remunerations, and amounts payables to the employees that are not actually paid or do not have invoices according to law;
k) The expenditures on loan interests corresponding to the charter capital deficit;
l) Deducted input VAT, VAT paid using the credit-invoice method, corporate income tax;
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n) Donations, except for donations for education, health, scientific research, disaster recovery, houses of unity, houses of gratitude, houses for beneficiaries of social policies according to law, donations for extremely disadvantaged areas according to state programs;
o) Voluntary payments to retirement funds or social security funds, payments for voluntary retirement insurance for employees that exceed the limits imposed by law;
p) Expenditures on business operations: banking, insurance, lottery, securities, and some other special businesses specified by the Minister of Finance.
3. Expenditures in foreign currency, unless to serve the calculation of taxable incomes that must be converted into VND, according to the average exchange rates on the interbank foreign currency market that are announced by the State bank of Vietnam when the expenditures occur.
The Government shall elaborate this Article.
1. The corporate income tax rate is 22%, except for the cases in Clause 2 and Clause 3 of this Article and beneficiaries of tax incentives prescribed in Article 13 of this Article.
From January 1st 2016, the tax rate of 20% shall apply to the cases to which the tax rate of 22% in this Clause applies.
2. Any enterprise whose total revenue in the year does not exceed 20 billion VND shall be eligible for applying the tax rate of 20%.
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3. The corporate income tax rate applicable to petroleum operations ranges from 25% to 50% depending on each petroleum contract; the corporate income tax rate applicable to the exploration and extraction of other rare and precious resources in Vietnam ranges from 32% to 50 depending on each project and each business establishment.
The Government shall elaborate this Article.
Article 11. Tax calculation method
1. Corporate income tax payable in a tax period equals (=) assessable income multiplied by (x) tax rate; in case an enterprise has paid income tax outside Vietnam, the paid tax may be deducted but the deduction must not exceed the corporate income tax payable under the provisions of this Law.
2. The tax calculation method applicable to enterprises prescribed in Points c and d, Clause 2, Article 2 of this Law shall comply with regulations of the Government of Vietnam.
Article 12. Places for tax payment
Enterprises shall pay tax at tax authorities of local areas where they are headquartered. In case an enterprise has a dependent accounting unit operating in a province or centrally run city other than the place of its headquarters, tax payable shall be calculated according to the ratio of the unit's expenses to the headquarters' expenses. Revenues from collected tax shall be managed and used in accordance with the Law on State Budget.
The Government shall elaborate this Article.
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Article 13. Tax rate incentives
1. The tax rate of 10% shall apply for 15 years to:
a) Incomes of enterprises from the execution of new investment projects in extremely disadvantaged areas, economic zones, and hi-tech zones;
b) Incomes of enterprises from the execution of new investment projects, including: research and development (R&D); application of high technologies in the list of prioritized high technologies according to the Law on High Technologies; cultivation of high technologies, cultivation of hi-tech enterprises; investment of venture capital in the development of high technologies in the list of prioritized high technologies according to the Law on High Technologies; investment in crucial infrastructure of the State; software production; production of composite materials, light building materials, rare materials, renewable energy, clean energy, energy from waste destruction; development of biological technology, and environment protection;
c) Incomes of hi-tech enterprises and agricultural enterprises that apply high technologies according to the Law on High Technologies;
d) Incomes of enterprises from the execution of new investment projects in production (except for the production of articles subject to excise duties and mineral extraction projects), which meet one of the two criteria below:
- Any project of which the investment capital is at least 6 thousand billion VND that is disbursed within 3 years from the day on which the Investment Certificate is issued, and the total revenue reaches at least 10 thousand billion VND within 3 years from the first year in which revenue is generated;
- Any project of which the capital is at least 6 thousand billion VND that is disbursed within 3 years from the day on which the Investment Certificate is issued, and employs more than 3 thousand workers.
dd) Income of enterprises from execution of new investment projects in manufacturing of products on the List of ancillary products given priority and satisfying one of the following conditions:
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- Ancillary products serving the manufacturing of the following industries: textile – garment; leather - footwear; electronic - IT; automobile manufacturing & assembling; mechanical engineering, provided they cannot be manufactured in Vietnam up to January 1st 2015, or can be manufactured in Vietnam and satisfy technical standards established by EU or the equivalent.
The Government shall compile the List of ancillary products given priority mentioned in this Point;
e) Income of enterprises from execution of manufacturing projects, except for manufacturing of products subject to excise tax and mineral extraction, the capital investment in which is at least 12 thousand billion VND, the technologies applied are appraised in accordance with the Law on High-technology, the Law on Science and Technology, and the registered capital is disbursed within 05 years from the day on which the investment is permitted as prescribed by investment laws.
2. The tax rate of 10% shall apply to:
a) Incomes of private enterprises from investment in education, vocational training, health, culture, sports, and environment;
b) Incomes of enterprises from investment in social housing for sale, for lease, or for hire purchase according to Article 53 of the Law on Housing;
c) Incomes from press agencies from printing newspapers, including advertisements on printed newspapers according to the Law on Press; incomes of publishers from publishing according to the Law on Publishing;
d) Incomes of enterprises from: planting, cultivating, protecting forests; cultivating, processing agriculture and aquaculture products in disadvantaged areas; producing forestry products in a disadvantaged area; producing, propagating, cross-breeding plants and animals; producing and refining salt, except for the types of salt defined in Clause 1 Article 4 of this Law; investment in preservation of harvested farm produce, preservation of agriculture products, aquaculture products, and foods;
dd) Incomes of cooperatives from agriculture, forestry, fisheries, and salt production that are not located in disadvantaged or extremely disadvantaged areas, except for incomes of the cooperatives prescribed in Clause 1 Article 4 of this Law.
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a) Incomes of enterprises from the execution of new investment projects in disadvantaged areas;
b) Incomes of enterprises from the execution of new investment projects, including: production of high-grade steel; production of energy-saving products; production of machinery and equipment serving agriculture, forestry, aquaculture, salt production; production of irrigation equipment; production and refinement of feed for livestock, poultry, and aquatic organism; development of traditional trades.
From January 1st 2016, incomes of the enterprises prescribed in this Clause shall be eligible for the tax rate of 17%.
3a. 15% tax shall apply: incomes of enterprises from farming, breeding, processing of agriculture and aquaculture products in areas other than disadvantaged areas or extremely disadvantaged areas.
4. The tax rate of 20% shall apply to incomes of people's credit funds and microfinance institutions.
From January 1st 2016, incomes of people's credit funds and microfinance institutions shall be eligible for the tax rate of 17%.
5. Extension of preferential tax period:
a) With regard to any special project that needs to attract substantial investment and requires high technologies, the preferential tax period may be extended for up to 15 years.
b) If a project mentioned in Point e Clause 1 of this Article satisfies one of the following conditions:
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- More than 6,000 regular employees are hired;
- The project of investment involves economic – technical infrastructure, including: investment in water plants, power plants, water supply and drainage systems, bridges, roads, railroad, airports, seaports, river ports, train stations, new energies, clean energies, energy-saving industry, oil refinery.
The Prime Minister shall decide the extension of preferential tax period mentioned in this Point, provided the extension is not longer than 15 years.
5a. With respect to the investment projects specified in Clause 2 Article 20 of the Law on Investment, the Prime Minister shall decide to apply a preferential tax rate reducing by no more than 50% the preferential tax rate specified in Clause 1 of this Article. The duration of application of the preferential tax rate shall not exceed 1,5 times the duration of application of the preferential tax rate specified in Clause 1 and may be extended for no more than 15 years and must not exceed the duration of the investment project.
6. The period of preferential tax rates in this Article begins from the first year in which revenue from the new project of investment is earned; for hi-tech enterprises and agricultural enterprises that apply high technologies, this period begins from the day on which the certificate of hi-tech enterprise or certificate of hi-tech agricultural enterprise is issued; for projects of high technology application, this period begins from the day on which the certificate of hi-tech application project is issued.
The Government shall elaborate this Article.
Article 14. Preferential duration of tax exemption and tax reduction
1. Incomes of enterprises from the execution of new investment projects provided for in Clause 1 and Point a Clause 2 Article 13 of this Law, incomes of hi-tech enterprises, hi-tech agricultural enterprises are eligible for tax exemption for up to 4 years, and eligible for 50% tax reduction for up to 9 more years.
1a. With respect to the investment projects specified in Clause 2 Article 20 of the Law on Investment, the Prime Minister shall decide to apply tax exemption for up to 6 years and grant 50% tax reduction for up to 13 more years.
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3. The period of tax exemption and tax reduction applicable to incomes of enterprises from the execution of new investment projects in Clause 1 and Clause 2 of this Article begins from the first year in which taxable income from the investment projects is earned. If no taxable income is earned in the first three years from the first year in which revenue from the project is earned, the period of tax exemption and tax reduction shall begin from the fourth year. The period of preferential tax rates applicable to hi-tech enterprises and agricultural enterprises that apply high technologies mentioned in Point c Clause 1 Article 13 of this Law begins from the date of issuance of the certificate of hi-tech enterprise or certificate of hi-tech agricultural enterprise.
4. When an enterprise, which has projects of investment in the fields or areas eligible for corporate income tax incentives according to this Law, expands the production scale, increases the productivity, upgrades production technologies (expansion), it may choose between tax incentives for operating projects for the remaining time (if any) or tax exemption or reduction for the additional incomes from expansion if one of the three criteria in this Clause is satisfied. The period of tax exemption and tax reduction for the additional incomes from expansion in this Clause is equal to the period of tax exemption and tax reduction for new projects of investment in the same field or local area that is eligible for corporate income tax incentives.
The expansion must satisfy one of the criteria below to be given incentives:
a) The cost of additional fixed assets reaches at least 20 billion VND when the investment project is completed and commenced, applicable to expanding investments in the fields eligible for corporate income tax incentives according to this Law, or at least 10 billion VND, applicable to expanding investments in disadvantaged or extremely disadvantaged areas;
b) The proportion of cost of additional fixed assets reaches at least 20% of the total cost of fixed assets before investment;
c) The designed capacity increases by at least 20% after investment.
In case an enterprise invests in expansion in a field or area eligible for tax incentives according to of this Law but fails to satisfy any of the three criteria above, the tax incentives shall apply to the remaining operating period of the project (if any).
If an enterprise is eligible for tax incentives for expansion, the additional income from expansion shall be recorded separately; if it is not able to be recorded separately, the income from expansion shall be determined according to the ratio of the cost of new fixed assets to the total cost of fixed assets of the enterprise.
The period of tax exemption and tax reduction in this Clause begins from the year in which the investment project is finished and its operation is commenced.
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The Government shall elaborate this Article.
Article 15. Other cases eligible for tax reduction
1. Production, construction or transport enterprises having many female employees are entitled to a reduction of corporate income tax which is equal to the additional expenses for female workers.
2. Enterprises having many ethnic minority employees are entitled to a reduction of corporate income tax which is equal to the additional expenses for ethnic minority workers.
3. Any enterprise that transfers prioritized technologies to other organizations and individuals in disadvantaged areas shall be eligible for 50% reduction in corporate income tax on the income from technology transfers.
The Government shall elaborate this Article.
Article 16. Carrying forward of losses
1. An enterprise may carry forward its loss to the next year; this loss may be deducted from assessable income. The period of loss carryforward must not exceed 5 years from the year succeeding the year in which the loss is incurred.
2. Enterprises whose losses still remain after offsetting their losses on transfers of real estate, transfers of investment projects, transfers of the right to participate in investment project, according to Clause 3 Article 7 of this Law, and enterprises having losses from transfers of the right to explore and extract minerals may carry forward the losses to the next year and offset them against the assessable incomes from such activities. The period of loss carryforward shall comply with Clause 1 of this Article.
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1. Any enterprise established and operated according to Vietnam’s law may use up to 10% of its annual assessable income to establish its own science and technology development fund. Apart from establishing the science and technology development funds, state-owned enterprises must maintain minimum contributions to these funds according to the laws on science and technology.
2. Within five years after being established, if a scientific and technological development fund is not used, or has been used below 70% or used for unintended purposes, the enterprise shall transfer to state budget the corporate income tax on the income already deducted for setting up the fund but not used or properly used plus (+) interest on that corporate income tax.
The corporate income tax rate used for calculating tax arrears is the tax rate applicable to the enterprise during the time of operating the fund.
The interest rate for calculating the interest on the tax arrears on the unused fund is the interest rate for one-year term treasury bonds applicable at the time of collection, and the interest payment period is two years.
The interest rate for calculating interest on the tax arrears on the fund improperly used shall be the late payment interest rate under the provisions of the Tax Administration Law, and the interest payment period begins from the time a fund is set up and ends when tax arrears are collected.
3. Enterprises may not record expenses of their scientific and technological development funds as deductible expenses upon the determination of taxable incomes in a tax period.
4. Enterprises' scientific and technological development funds may be used only for scientific and technological investment in Vietnam.
Article 18. Conditions for tax incentives
1. Corporate income tax incentives specified in Articles 13, 14, 15, 16 and 17 of this Law apply only to enterprises which implement regulations on accounting, invoices and documents and pay tax according to declarations.
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2. Enterprises must separate incomes from the operations eligible for tax incentives prescribed in Article 13 and Article 14 of this Law from incomes from the operations that are not eligible for tax incentives; if these incomes cannot be separated, the income from the operations eligible for tax incentives shall be determined according to the ratio of the revenue from the operations eligible for tax incentives to the total revenue of the enterprise.
3. The tax rate of 20% in Clause 2 Article 10 and the tax incentives in Clause 1 and Clause 4 Article 4, Article 13, and Article 14 of this Law do not apply to:
a) Incomes from transfer of capital, transfers of the right to contribute capital; incomes from the transfers of real estate, except for social housing specified in Article 13 of this Law; incomes from transfers of investment projects, transfers of the right to participate in investment projects, transfers of the right to explore and extract minerals; incomes from operations outside Vietnam;
b) Incomes from the exploration and extraction of petroleum and other rare resources, and incomes from mineral extraction;
c) Incomes from services subject to excise duty according to the Law on Excise duty;
d) Other cases decided by the Government.
4. If an enterprise is eligible to multiple tax incentives for the same income at the same time, it may choose the most advantageous incentive.
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1. This Law comes into force January 1st 2009.
2. This Law replaces the Law on Corporate Income Tax No. 09/2003/QH11.
3. Enterprises enjoying corporate income tax incentives under the Law on Corporate Income Tax No. 09/2003/QH11 may continue enjoying those incentives for the remaining effective period of the Law on Corporate Income Tax No. 09/2003/QH11; in case corporate income tax incentives, including tax rate incentives and tax exemption and reduction duration, are less advantageous than the tax incentives specified in this Law, the tax incentives under this Law may be applied for the remaining duration.
4. Enterprises which are entitled to tax exemption or reduction duration under the Law on Corporate Income Tax No. 09/2003/QH11 but have no taxable income yet, the starting date of the tax exemption or reduction period shall comply with regulations of this Law and from the effective date of this Law.
Article 20. Implementation guidance
The Government of Vietnam shall elaborate Articles 4, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 18 and other necessary contents of this Law to meet management requirements./,
CERTIFIED BY
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File gốc của Integrated document No. 01/VBHN-VPQH dated January 30, 2023 Law on Corporate Income Tax đang được cập nhật.
Integrated document No. 01/VBHN-VPQH dated January 30, 2023 Law on Corporate Income Tax
Tóm tắt
| Cơ quan ban hành | Văn phòng quốc hội |
| Số hiệu | 01/VBHN-VPQH |
| Loại văn bản | Văn bản hợp nhất |
| Người ký | Bùi Văn Cường |
| Ngày ban hành | 2023-01-30 |
| Ngày hiệu lực | 2023-01-30 |
| Lĩnh vực | Doanh nghiệp |
| Tình trạng | Còn hiệu lực |