The first year of operation for an FDI enterprise in Vietnam typically involves heavy setup costs, unstable revenue, and an accounting–tax system still being built. The first corporate income tax (CIT) finalization is therefore a critical “stress test” — taking place under an entirely new CIT framework: the CIT Law 67/2025/QH15 (passed 14/6/2025, effective 01/10/2025, applicable from tax year 2025), replacing Law 14/2008/QH12 and its amendments, with guiding Decree 320/2025/ND-CP (issued 15/12/2025, effective 15/12/2025, applicable from tax year 2025). Here are 5 key points.
Note on legal currency: on 24/4/2026, the National Assembly passed Law 09/2026/QH16 (effective 24/4/2026) amending several articles of four tax laws, including the CIT Law. When applying the article numbers cited below to a specific case, cross-check the latest consolidated text (VBHN) of the CIT Law, as article numbering may have changed after the amendment.
1. Determine the correct rate: the 3-tier revenue-based framework
Article 10 of Law 67/2025 sets tiered CIT rates based on total revenue of the immediately preceding year: 15% (preceding-year revenue not exceeding VND 3 billion); 17% (over VND 3 billion up to VND 50 billion); 20% (all other cases).
Two cautions. First, the 15%/17% rates do not apply to certain income such as capital transfers, real estate transfers, oil and gas, minerals, prize-winning online games, or goods subject to special consumption tax (Article 23.9 of Decree 320/2025). Second, for a first-year enterprise — with no “immediately preceding year” revenue — how the rate is determined remains uncertain at the time of writing; do not assume the 15%/17% rates apply by default, and check Decree 320/2025 and the latest guidance directly.
2. Use incentives for new investment projects — but verify eligibility carefully
Law 67/2025 offers a significant incentive regime for new investment projects in incentivized sectors (Articles 12, 13, 14 and Decree 320/2025): a preferential rate of 10% for 15 years (Article 13); tax exemption for up to 04 years and a 50% reduction for up to the next 09 years (Article 14).
The commonly miscalculated point: the exemption/reduction period runs from the first year the project generates taxable income, not from the year of establishment; if there is no taxable income during the first 03 years from the first year of revenue, the period runs from the 4th year. Moreover, not every FDI project qualifies — detailed conditions on sectors, locations, and capital scale are in Decree 320/2025 and must be checked condition by condition before claiming incentives in the finalization return.
On transition (Article 20 of Law 67/2025): enterprises with projects already enjoying incentives under prior law may choose incentives under the old or new law for the remaining period (if meeting the new law’s conditions); projects not previously incentivized but incentivized under Law 67/2025 may apply the new incentives for the remaining period from tax year 2025.
3. Review deductible expenses: two common first-year traps
First-year FDI enterprises incur many setup costs — and these are also where expenses are most often disallowed at finalization. Two points deserve special attention:
- The non-cash payment voucher threshold has tightened to VND 5 million. Each payment for goods, services, salaries, or wages of VND 5 million or more must be supported by a non-cash payment voucher to be deductible (Law 67/2025; Decree 320/2025). The old VND 20 million threshold no longer applies.
- Interest on the unpaid portion of charter capital is not deductible. Under Decree 320/2025, interest paid on loans corresponding to the registered charter capital still unpaid per the capital contribution schedule (within the Enterprise Law deadline) is not deductible in determining taxable income. First-year FDI companies often contribute capital in tranches while borrowing from the parent company — this interest must be computed carefully before being booked as an expense.
Other sensitive items — depreciation, pre-operating expenses, loss carry-forward — should also be reviewed; this article flags them only as “items to review,” with specific figures to be checked against the current instruments.
4. Know the finalization deadline and the procedural transition
The CIT finalization dossier is due no later than the last day of the 3rd month following the end of the finalization period (Article 10.5.a of Decree 252/2026/ND-CP; procedural framework of the Tax Administration Law 108/2025/QH15, effective 01/7/2026). For a calendar-year period, the deadline is 31 March of the following year — not “90 days” as commonly phrased.
Transition note: finalization for tax year 2025 (due 31/3/2026) is still processed under Decree 126/2020 and Tax Administration Law 38/2019; from tax year 2026, Decree 252/2026 and Law 108/2025 apply. Also note: there is no exemption from finalization merely because “the first year generated no revenue.”
5. Major update: the license tax was abolished from 01/01/2026
Article 10.7 of Resolution 198/2025/QH15 provides for the “termination of license tax collection and payment from 01/01/2026”; Decree 362/2025/ND-CP repeals Decrees 139/2016 and 22/2020 on license tax. Consequence: FDI enterprises established in 2026 have no license tax obligation — never include “license tax payment” in a first-year compliance checklist.
As a matter of principle for the first finalization: quarterly provisional CIT payments should be reconciled against the annual finalized tax (per Decree 320/2025); check the decree’s full text directly before applying any specific ratio.
Related articles
- Year-end tax finalization for FDI companies in Vietnam
- Vietnam–China CIT comparison 2026: incentives and enforcement
Frequently asked questions
Is a first-year FDI enterprise exempt from CIT finalization?
No. There is no finalization exemption for the first year of operation; the dossier must still be filed by the 31 March deadline (for a calendar-year period).
What CIT rate applies in the first year with no prior-year revenue?
There is no certain answer at the time of writing — the 15%/17%/20% tiers are based on “immediately preceding year” revenue, and the first-year determination must be checked directly against Decree 320/2025. Do not assume 15%/17% by default.
Must an enterprise established in 2026 pay the license tax?
No. License tax collection and payment ended on 01/01/2026 (Resolution 198/2025/QH15; Decree 362/2025/ND-CP).
Legal bases: CIT Law 67/2025/QH15 (effective 01/10/2025, applicable from tax year 2025; amended by Law 09/2026/QH16 — check the latest VBHN); Decree 320/2025/ND-CP; Tax Administration Law 108/2025/QH15; Decree 252/2026/ND-CP; Resolution 198/2025/QH15; Decree 362/2025/ND-CP.
Is your FDI enterprise approaching its first CIT finalization? Reach us via the Contact page of FLAT Law Firm for a review of tax incentives, deductible expenses, and finalization dossiers under the new legal framework.
For reference only, not legal advice.
The legal content of this article is reviewed by FLAT’s AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.