An LLC wants to convert into a joint-stock company to raise capital: must it re-register its tax code? File a tax settlement up to the conversion date? Does asset revaluation on conversion trigger CIT? The general principle: converting an enterprise type is NOT dissolution/re-establishment — the post-conversion enterprise inherits all rights and obligations (including tax obligations) of the pre-conversion enterprise. This article analyzes each tax obligation under the current legal framework.
1. Inheritance principle and unchanged tax code
Type conversion (e.g., LLC → JSC) is a continuation of the legal person, not a termination of operations. The direct consequence: the tax code stays unchanged — this principle is maintained in the new tax registration framework under Tax Administration Law 108/2025, specifically Circular 90/2026/TT-BTC guiding tax registration, which keeps the rule that “the tax code of an enterprise after type conversion… remains unchanged” (referring to Article 10.2 of Law 108/2025/QH15). We do not cite Article 30.3.dd of Tax Administration Law 38/2019 — that law expired on 30/6/2026.
2. CIT: asset revaluation differences → other income
On conversion, if the enterprise revalues assets as prescribed by law, the upward difference (between the revalued amount and the residual book value — detailed in point o of Decree 320/2025/ND-CP) is booked once as other income subject to CIT in the period (Article 3.2.k of CIT Law 67/2025); a downward difference reduces other income. Exemption: differences from revaluation for equitization or restructuring of state enterprises 100% state-owned (Article 4.9 of Law 67/2025). Conversely, if the conversion involves no asset revaluation → no taxable income arises from the conversion. For land use rights specifically, Decree 320/2025 has its own rules (one-time or gradual allocation) — verify the original text directly before applying.
3. VAT: transferred assets are not subject to VAT
Assets transferred on enterprise type conversion are not subject to VAT (no invoice issued) — on condition of an asset transfer order accompanied by the asset origin dossier (Article 6.1.c of Decree 181/2025/ND-CP, effective 1/7/2025). Note: do not cite Circular 219/2013/TT-BTC as the current basis — it has been replaced by Circular 69/2025/TT-BTC.
4. Tax incentives: no “new investment project” treatment
CIT incentives for new investment projects do not apply to type conversions (Article 18.2 of Law 67/2025). However, incentives already enjoyed are inherited if conditions are met — e.g., the new enterprise inherits management and use of the Science and Technology Development Fund (Article 17.5). Companies should not expect to “refresh” incentives through conversion.
5. Tax settlement: no settlement up to the conversion date
Under the mechanism maintained in the current guidance (previously: Circular 151/2014, Article 16.2): where the conversion’s receiving party inherits all tax obligations (LLC → JSC or vice versa), no tax settlement filing is required up to the date of the conversion decision — the enterprise only files the annual tax settlement as prescribed. Distinction: a private enterprise converting into an LLC must still settle tax up to the conversion date. When acting, verify the return forms and detailed rules at the time of filing under the current guidance of Law 108/2025 (Decree 252/2026, Circular 89/2026).
6. E-invoices and business license tax
- E-invoices: do not re-issue; file a notice of information adjustment (name, enterprise type) with the tax authority. New framework: Decree 254/2026/ND-CP guiding Law 108/2025 on e-invoices, effective 1/7/2026;
- Business license tax: if charter capital after conversion changes the bracket → declare under the new bracket; check the current bracket schedule at the time of declaration.
7. Out-of-scope boundaries and special notes
- PIT of members/shareholders on conversion (share allocation, capital differences): outside this article’s scope — requires separate analysis;
- Export processing enterprises (EPEs) converting type: imported assets carry separate customs obligations (Decree 167/2025 amending Decree 08/2015, Article 78) — noted so nothing is missed.
8. Frequently asked questions
Does converting from LLC to JSC require a new tax code?
No. The tax code stays unchanged under the principle in Circular 90/2026/TT-BTC (the Law 108/2025 framework).
Is asset revaluation on conversion subject to CIT?
Yes — the upward difference is booked once as other CIT-taxable income (Article 3.2.k of Law 67/2025), except for equitization/restructuring of 100% state-owned enterprises (Article 4.9).
Must I settle tax up to the conversion decision date?
No, where the receiving party inherits all tax obligations (LLC → JSC or vice versa) — only the annual settlement. A private enterprise → LLC conversion still requires settlement up to the conversion date.
Does conversion qualify for new-investment-project incentives?
No (Article 18.2 of Law 67/2025). Incentives already enjoyed are inherited if conditions are met.
Sources
- CIT Law 67/2025/QH15 — effective 1/10/2025, applicable to tax year 2025: Article 3.2.k (revaluation differences → other income), Article 4.9 (exemption for SOE equitization), Article 18.2 (new investment projects don’t cover type conversions), Article 17.5 (inheriting the S&T Fund);
- Decree 320/2025/ND-CP — effective 15/12/2025: point o (details on other income — revaluation differences);
- Decree 181/2025/ND-CP — effective 1/7/2025: Article 6.1.c (assets transferred on type conversion → not subject to VAT);
- Tax Administration Law 108/2025/QH15 + Circular 90/2026/TT-BTC: the unchanged-tax-code principle after type conversion;
- Decree 254/2026/ND-CP — effective 1/7/2026: e-invoice framework under Law 108/2025.
For reference only; not legal advice. This content was drafted by AI and will be quality-checked by the AI Legal Council of FLAT Law Firm before publication review; it is not legal advice from a human lawyer. Regulations may change; please check the current legal texts before relying on this information.
Is your company preparing a type conversion and needs to review its tax obligations? Contact FLAT Law Firm for advice.
