Are you looking for important changes in the Corporate Income Tax (CIT) Law? The new CIT Law will officially take effect in October 2025. Understanding these changes is extremely important. It helps enterprises optimize their tax obligations. DNP Vietnam Law Firm provides the following summary. We analyze key updates in the Corporate Income Tax Law applicable from October 2025. Businesses should review them carefully to ensure full compliance.
1. Expansion of Corporate Income Tax Subjects
According to Article 2 of the Corporate Income Tax Law 2025, taxable entities are defined in greater detail. The law applies to all organizations engaged in business activities that generate taxable income, regardless of their legal form or ownership structure.
One notable change is the broader scope of taxable entities.
– The new law adjusts and clarifies applicable subjects.
– It covers both enterprises and other organizations that conduct business activities in goods and services.
– This regulation also captures new forms of business models.
– It ensures fairness and strengthens state budget revenue.
2. New Changes Related to Corporate Income Tax Rates
The new CIT Law introduces changes to tax rates. These adjustments directly affect business expenses.
2.1. Standard Corporate Income Tax Rate
– The standard CIT rate remains at 20%.
– However, the law offers more detailed rules on cases where this rate applies.
– Therefore, enterprises can clearly identify their taxable obligations.
Legal Basis: Clause 1, Article 11 of the CIT Law 2025.
2.2. Preferential Corporate Income Tax Rates
– The new law expands cases eligible for preferential tax rates.
– Investment-encouraged sectors are granted preferential rates.
– Businesses operating in high-tech zones will benefit from reduced tax rates. Applicable rates may be 15% or 10%, depending on the sector or geographic location.
– The duration of these incentives is also specified.
– Therefore, enterprises must assess their eligibility.
Legal Basis: Clauses 2 and 3, Article 13 of the CIT Law 2025.
2.3. Tax Rate Applicable to Mineral Exploration and Extraction
– Mineral exploration and extraction activities are subject to special CIT rates.
– These rates may reach 32%, 40%, or even 50%.
– The applicable rate depends on reserves and exploitation conditions.
Legal Basis: Article 12 of the CIT Law 2025.
3. New Regulations on Taxable Incomes
The amended CIT Law provides clearer definitions of taxable income.
– It includes income from the production and trading of goods and services.
– As well as other income such as gains from capital transfers and real estate transfers.
– It also covers interest from deposits, loans, and foreign currency trading.
– The law clearly states that such income must be included in taxable income.
Legal Basis: Article 7 of the CIT Law 2025.
4. Changes in Deductible Expenses for CIT Purposes
The 2025 CIT Law introduces stricter requirements on documentation and adjusts limits for certain expenses such as welfare, advertising, and marketing. These regulations aim to prevent tax loss.
– The law clarifies invoice and document requirements.
– Deductible expenses must relate to business operations.
– Limits on advertising, marketing, and commission expenses are adjusted.
– Businesses must pay close attention to avoid disallowed expenses during tax finalization.
Legal Basis: Clause 2, Article 9 of the CIT Law 2025.
5. Supplemented Regulations on Loss Carry-Forward
– The new law continues to allow loss carry-forward.
– The maximum carry-forward period remains 5 years.
– The law clarifies principles and procedures for loss carry-forward.
– This reduces tax burdens in later years.
Legal Basis: Article 10 of the CIT Law 2025.
6. More Detailed Rules on Related-Party Transactions
– These regulations aim to prevent transfer pricing and base erosion.
– The new law clarifies methods for determining arm’s length pricing.
– Documentation requirements for transfer pricing compliance become stricter.
– Enterprises engaged in related-party transactions must pay special attention.
– The purpose is to ensure transparency and fairness in CIT obligations.
Legal Basis: Article 17 of the CIT Law 2025.
7. Other Changes in CIT Exemptions and Reductions
– The law supplements additional cases eligible for CIT exemptions and reductions.
– Priority is given to science and technology firms, educational institutions, and healthcare providers.
– Conditions and procedures for applying tax incentives are defined more clearly.
– Enterprises should assess these rules to maximize tax benefits.
Legal Basis: Articles 14 and 15 of the CIT Law 2025.
Understanding key amendments to the CIT Law effective from October 2025 is crucial. These changes significantly affect enterprise financial planning. DNP Vietnam Law Firm is proud to offer professional tax law advisory services with a highly specialized team of lawyers. We support enterprises in reviewing internal processes and applying these new rules. Our goal is to help your business comply with tax regulations effectively.
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