Tax Incentives for Green Economy, Semiconductors and Digital Transformation Under the New Law

Tax Incentives for Green Economy, Semiconductors and Digital Transformation: Key Changes Under the 2025 Corporate Income Tax Law

The Law on Corporate Income Tax No. 67/2025/QH15 ("Luật Thuế thu nhập doanh nghiệp số 67/2025/QH15") — effective from 01/10/2025 and applicable from the 2025 corporate income tax (CIT) year — for the first time codifies, directly in tax legislation, dedicated green economy tax incentives, incentives for the semiconductor industry, and incentives for digital transformation: from a 10% tax rate for 15 years for semiconductor chip manufacturing, artificial intelligence data centres, and renewable energy, to the inclusion of income from green bonds in the exempt-income category. This is a major policy shift that every enterprise operating in these three strategic sector clusters — as well as investors considering deploying capital into Vietnam — should understand immediately, starting from the 2025 tax finalisation.

Table of Contents

• 1. Overview of the legislation
• 2. Key new points
• 3. Practical impact on enterprises
• 4. Action items and deadlines
• 5. Open points to monitor
• 6. Frequently asked questions

1. Overview of the legislation

The Law on Corporate Income Tax No. 67/2025/QH15 was adopted by the National Assembly on 14/6/2025. Under Article 19 of the Law, it takes effect on 01/10/2025 and applies from the 2025 corporate income tax year — meaning that for the 2025 tax finalisation itself, enterprises already apply the new legal framework. The Law on Corporate Income Tax No. 14/2008/QH12 ("Luật Thuế thu nhập doanh nghiệp số 14/2008/QH12"), together with its amending and supplementing laws, expires on the date the new Law takes effect.

The Government has issued Decree No. 320/2025/ND-CP ("Nghị định số 320/2025/ND-CP") detailing the implementation of the Law — issued and effective from 15/12/2025, applicable from the 2025 corporate income tax year (Article 24 of the Decree). Notably, enterprises may choose to apply the Decree's provisions on incentives, exemption, and reduction from the beginning of the 2025 tax year, from the date the Law takes effect, or from the date the Decree takes effect — and must apply their choice consistently across their tax filings.

The focus of this article is the system of tax incentives reserved for three sector clusters: the green economy, the semiconductor industry, and digital transformation. The incentive provisions are concentrated in Articles 4, 12, 13, 14, and 18 of Law 67/2025.

One important positioning note at the outset: this article covers only TAX incentives — that is, preferential tax rates, CIT exemption, and CIT reduction. INVESTMENT incentives — such as land incentives, investment procedures, investment registration certificates, and special investment support under investment law — are a separate policy area, addressed in our article on the 2026 investment incentive policy for the same three sector clusters. The two areas complement each other but have entirely different legal bases, competent authorities, and procedures; enterprises should not confuse them when planning.

2. Key new points

2.1. Semiconductors and digital transformation: 10% tax rate for 15 years

The most prominent feature of Law 67/2025 is that it names the semiconductor industry and digital infrastructure directly in the highest preferential tax bracket. Under Articles 12 (which identifies the incentivised sectors) and 13 (which sets the preferential rate), income of an enterprise from implementing a new investment project in the following sectors is subject to a 10% tax rate for 15 years:

• Research and development, design, manufacturing, packaging, and testing of semiconductor chip products;
• Construction of artificial intelligence data centres;
• Manufacturing of key digital technology products, provision of key digital technology services, and manufacturing of electronic equipment as prescribed by the law on the digital technology industry;
• Manufacturing of software products; manufacturing of network information security products and provision of network information security services;
• Manufacturing of supporting-industry products on the priority list — including semiconductor design and manufacturing.

What is different from before: under the 2008 Law on Corporate Income Tax, incentives were granted mainly for software production and certain high technologies in general terms, without specifically naming network information security, semiconductor chips, or data centres. The new Law's "roll call" of each of these segments signals a deliberate policy direction to attract investment into the semiconductor value chain and digital infrastructure.

Accompanying the 10% preferential rate is a mechanism of tax exemption for up to 4 years and a 50% reduction of the tax payable for up to the next 9 years (Article 14). The preferential tax period is counted from the first year in which the new investment project generates revenue (Article 13); where an enterprise is granted a High-Tech Enterprise Certificate, a Science and Technology Enterprise Certificate, or an incentive confirmation after revenue has already arisen, the incentive period is counted from the year the certificate is granted.

At the lower incentive tier, a 17% tax rate for 10 years applies to new investment projects manufacturing other digital technology products, manufacturing energy-saving products, and manufacturing and assembling automobiles. Notably, new automobile manufacturing and assembly projects, which previously enjoyed a 10% rate, now fall under the 17% bracket — a tightening that automotive investors should note. The 17% rate is accompanied by tax exemption for up to 2 years and a 50% reduction of the tax payable for up to the next 4 years.

Regarding tax-exempt income (Article 4), the new Law both expands and tightens several items directly relevant to digital transformation and innovation: income from performing scientific research, technology development and innovation, and digital transformation contracts; income from selling products made with technology applied for the first time in Vietnam; and income from selling trial-production products, including controlled trial production — exempt for up to 3 years, instead of 5 years as previously provided. Technology enterprises in the commercialisation phase of new products need to recalculate their tax cash flows against this shortened window.

2.2. Green economy: 10% tax rate for 15 years and tax-exempt income from green bonds

For the green economy cluster, Articles 12 (incentivised sectors) and 13 (the 10% rate) of Law 67/2025 reserve the 10% rate for 15 years for income from new investment projects in:

• Production of renewable energy, clean energy, and energy from waste destruction;
• Environmental protection;
• Manufacturing of composite materials, lightweight construction materials, and rare materials.

In addition, new investment projects manufacturing energy-saving products enjoy the 17% rate for 10 years as noted above.

The genuinely watershed policy development is that green bonds are recognised in tax legislation for the first time: income from green bond interest and income from the first transfer of green bonds after issuance are classified as corporate-income-tax-exempt income (Article 4). This is a green finance instrument for which tax law previously provided no dedicated incentive — exempting both the interest and the first transfer transaction creates fresh momentum for enterprises to raise capital for environmentally friendly projects, while opening room for investors interested in sustainable finance.

What is different from before: the 2008 Law had no specific provisions on green bonds, and incentives for renewable energy and environmental protection were scattered across guiding documents. The new Law groups the "green" sectors into a single preferential-rate framework with a clear duration (15 years), enabling enterprises to model long-term project economics with greater certainty.

2.3. Large-scale projects, special projects, and incentives for expansion investment

Beyond sector-based incentives, Law 67/2025 also designs mechanisms for large-capital projects and special projects — a category into which many large semiconductor, data centre, and energy projects may fall:

• Investment projects in the manufacturing sector with a minimum investment capital of VND 12,000 billion, disbursing the total registered investment capital within no more than 5 years, and using technology meeting the requirements prescribed by the Minister of Science and Technology ("Bộ trưởng Bộ Khoa học và Công nghệ"): entitled to the 10% tax rate for 15 years.
• Investment projects eligible for special investment incentives and support under Clause 2, Article 20 of the Law on Investment ("Luật Đầu tư"): the Prime Minister decides to extend the tax exemption and reduction period up to 1.5 times the ordinary exemption/reduction period. This is a "top-up incentive" mechanism for projects with large spillover effects — the group that large semiconductor and data centre projects typically target.

For operating enterprises making expansion investments (expanding scale, increasing capacity, innovating technology, reducing pollution, or improving the environment) in incentivised sectors and locations: the incremental income from the expansion investment enjoys the tax incentives of the operating project for the remaining period without separate accounting of the incremental income. Where the operating project has exhausted its incentive period, incremental income from a qualifying expansion project remains eligible for tax exemption and reduction (but not the preferential tax rate), subject to separate accounting. An important caveat: this incentive does not apply to expansion investments arising from mergers, acquisitions of enterprises, or operating investment projects (Clause 6, Article 14).

2.4. Conditions for incentives and excluded cases — the boundaries to remember

Tax incentives do not apply automatically. Under Article 18 of the Law, enterprises must satisfy conditions including: paying tax under the declaration method, fully maintaining accounting, invoicing, and documentation systems, and separately accounting income from incentivised activities. Where the conditions are not met, the competent authority will collect tax arrears and impose penalties in accordance with the law. The specific dossiers and procedures for enjoying incentives are prescribed by the Ministry of Finance ("Bộ Tài chính") — enterprises should check the prevailing guidance before filing.

At the same time, Clause 3 of Article 18 lists cases excluded from tax incentives, including: real estate business (except investment in social housing construction), income from capital transfers and transfers of investment projects, mineral and petroleum extraction, goods and services subject to special consumption tax, online game activities, and income arising outside Vietnam. A "green" or "digital" project with an income component falling into these excluded categories will not enjoy incentives on that portion of income — separate accounting is mandatory.

3. Practical impact on enterprises

First, semiconductor, data centre, and digital technology enterprises are named in the law for the first time. The express listing of segments such as chip design, packaging, testing, and AI data centres gives tax departments and management a clear legal basis for 15-year tax planning, instead of having to interpret guiding documents as before.

Second, renewable energy and environmental projects see materially improved project economics. A 10% rate for 15 years, with 4 years of exemption and a 50% reduction for the next 9 years, significantly changes the IRR of wind, solar, and waste-treatment projects — particularly when combined with the tax-exempt green bond instrument.

Third, a "back door" opens for projects previously outside the incentive scope. Under Article 20 on transition, investment projects that were not eligible for incentives under the old law but are eligible under the new Law may apply the new incentives for the remaining period starting from the 2025 tax year. This is something operating enterprises should review immediately — there may be unclaimed tax benefits on the table.

Fourth, enterprises currently enjoying old incentives face a choice. Article 20 allows them to continue with the old level or switch to the new level for the remaining period if the conditions are met. This decision has long-term stability; it should be based on comparing the actual tax cash flows of both options, not made on instinct.

Fifth, two tightening points to remember: the exemption period for income from newly applied technology and trial production is cut from 5 years to a maximum of 3 years; and new automobile manufacturing and assembly projects move from the 10% rate to 17%.

4. Action items and deadlines

1. Immediately review the sector and location eligibility of each project under Article 12 — match actual operations against the incentive list before preparing the 2025 CIT finalisation return (the first tax year applying the new Law).
2. Lock in the application approach for Decree 320/2025 — choose to apply from the beginning of the 2025 tax year, from the date the Law takes effect (01/10/2025), or from the date the Decree takes effect (15/12/2025), and apply the choice consistently across all tax filings.
3. Enterprises currently enjoying old incentives: compare and choose the regime under Article 20 — model the tax cash flows of both the stay and the switch options before deciding, as the choice applies stably for the remaining period.
4. Separately account incentivised income as required by Article 18 — this is a mandatory condition; the absence of separate accounting can lead to loss of incentive entitlement and back-tax assessment.
5. Proactively complete certification dossiers (high-tech enterprise, science and technology enterprise, high-technology application project, etc.), because the timing of certificate issuance directly affects the incentive period under Article 13.
6. Expansion investment projects: check the conditions in Clause 6 of Article 14, note the merger/acquisition exclusion, and determine whether separate accounting of incremental income is required.
7. Monitor guidance on incentive dossiers and procedures issued by the Ministry of Finance so that supporting documents can be supplemented in time.

5. Open points to monitor

Alongside what is now clear, several points deserve a cautious approach and continued monitoring:

• The list of "key digital technology products and services" is determined under the law on the digital technology industry. The practical scope for each specific project depends on sector-specific regulations; before filing for incentives, enterprises should carefully cross-check or seek the views of the competent authority.
• The technology criteria of the Ministry of Science and Technology for projects of VND 12,000 billion or more currently have no verified detailed guidance — yet this is the decisive condition for whether a large project falls within the 10% incentive bracket.
• Detailed dossiers and procedures for claiming tax incentives prescribed by the Ministry of Finance: until complete guidance is available, enterprises should prepare dossiers as thoroughly and prudently as possible.
• Global minimum tax impact: for multinational groups with large consolidated revenue, the practical effectiveness of preferential tax rates may be affected by the global minimum tax rules (Resolution No. 107/2023/QH15, "Nghị quyết số 107/2023/QH15", applicable from 01/01/2024). This requires a group-by-group assessment; no blanket conclusion can be drawn.

For the open points above, enterprises should work with counsel and tax advisors to assess their specific cases rather than interpreting the rules on their own.

6. Frequently asked questions

1. What preferential tax rate applies to semiconductor chip manufacturers under the new law?

Income from a new investment project engaged in research and development, design, manufacturing, packaging, and testing of semiconductor chip products is subject to a 10% tax rate for 15 years (Articles 12 and 13 of Law 67/2025), together with a tax exemption for up to 4 years and a 50% reduction of the tax payable for up to the next 9 years (Article 14).

2. Is income from green bonds exempt from corporate income tax?

Yes. Law 67/2025 is the first to provide that interest on green bonds and income from the first transfer of green bonds after issuance qualify as corporate-income-tax-exempt income (Article 4).

3. Can an enterprise currently enjoying tax incentives under the old law switch to the new incentives?

It may choose. Article 20 of the Law allows an enterprise currently enjoying incentives under the old law to continue with the old level or switch to the new level for the remaining period, provided it meets the requirements of the new law.

4. Are tax incentives and investment incentives for green and semiconductor projects the same thing?

No. Tax incentives (preferential tax rates, CIT exemption and reduction under Law 67/2025) and investment incentives (land, investment procedures, special investment support under investment law) are two separate policy areas with different legal bases, competent authorities, and procedures. Enterprises typically need to combine both when planning a project.

5. Can an expansion investment project in an incentivised sector enjoy tax incentives?

Yes, under Clause 6 of Article 14: incremental income from an expansion investment enjoys the incentives of the operating project for the remaining period without separate accounting; if the old project has exhausted its incentive period, the incremental income is eligible for tax exemption and reduction (but not the preferential tax rate) when the criteria are met, subject to separate accounting. This does not apply to expansion investments arising from mergers or acquisitions.

Need to review the tax incentives for your project?

Whether a project qualifies for the 10% tax rate or meets the conditions for tax exemption and reduction depends on the actual business lines, capital scale, location, and certification dossiers of each enterprise — a single missed detail can lead to loss of incentive entitlement or back-tax assessment. FLAT LAW FIRM provides in-depth advisory on corporate income tax incentives for green economy, semiconductor, and digital transformation projects: reviewing incentive eligibility, comparing transition options, preparing certification dossiers, and accompanying enterprises in working with tax authorities. Contact our hotline 0988424851 for advice tailored to your enterprise's specific case.

References

• Law on Corporate Income Tax No. 67/2025/QH15 (Luật Thuế thu nhập doanh nghiệp số 67/2025/QH15) (adopted 14/6/2025; effective 01/10/2025, applicable from the 2025 corporate income tax year)
• Decree No. 320/2025/ND-CP (Nghị định số 320/2025/ND-CP) dated 15/12/2025 detailing the implementation of the Law on Corporate Income Tax (effective 15/12/2025, applicable from the 2025 corporate income tax year)
• Law on Corporate Income Tax No. 14/2008/QH12 (Luật Thuế thu nhập doanh nghiệp số 14/2008/QH12) and its amending and supplementing laws (expired from 01/10/2025) — cited only for comparison with prior rules
• Resolution No. 107/2023/QH15 (Nghị quyết số 107/2023/QH15) on the global minimum tax (applicable from 01/01/2024) — cited in the policy-caveat context

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