Vietnam CIT Rates 15%/17%/20% under Law 67/2025: How to Determine and Apply

From 1 October 2025, the Vietnam corporate income tax rates 2025 under the Law on Corporate Income Tax 2025 (67/2025/QH15) replaced the flat 20% rate that had applied for over a decade. For the first time, Vietnam's corporate income tax (CIT) rate is tiered by revenue size: companies with annual total revenue not exceeding VND 3 billion pay 15%, and companies with annual total revenue above VND 3 billion up to VND 50 billion pay 17%. This is a whole-entity classification — total revenue determines a single rate applied to all of the company's ordinary taxable income not subject to exclusions or special rates; it is not a progressive bracket system where each revenue slice is taxed separately. The 20% rate remains the general rate (Article 10(1)), applying where a company does not qualify for 15%/17% or for preferential rates under Article 13 — including income items excluded from 15%/17% such as capital transfers and real-estate transfers. Income from petroleum and rare-resource activities is subject to special rates of 25%–50% and 50%/40% under Article 10(4)(a)/(b), not the 20% general rate. This article explains how to determine the correct rate for each company, what changed from the old law, and what to do now to avoid the risk of provisional underpayment.

Table of contents

• 1. Overview of the law
• 2. What's new on tax rates
• 2.1. The new rate table in Article 10
• 2.2. The revenue basis for determining the rate
• 2.3. Comparison with the 2008 CIT Law
• 3. Practical impact on businesses
• 4. Action items and timelines
• 5. Open points to monitor
• 6. Frequently asked questions
• Need a tax health-check for your company?
• Language versions
• References

1. Overview of the law

• Full name: Law on Corporate Income Tax 2025, No. 67/2025/QH15.
• Passed: 14 June 2025, 9th session of the XV National Assembly.
• Effective date: 1 October 2025.
• Replaces: the Law on Corporate Income Tax 2008 (14/2008/QH12) and its amendments.
• Implementing instruments: Decree 320/2025/ND-CP dated 15 December 2025 providing detailed implementation; Circular 20/2026/TT-BTC effective 12 March 2026 guiding CIT matters.

This is the deepest CIT reform in over ten years, built on two pillars: revenue-tiered rates and expanded incentives for priority sectors. This article focuses on the first pillar — determining and applying the 15%/17%/20% rates.

2. What's new on tax rates

2.1. The new rate table in Article 10

Article 10 of Law 67/2025/QH15 sets out the following rate structure:

One important caveat: Article 10(1) expressly states that the 20% rate does not apply to entities entitled to preferential CIT rates under Article 13. In other words, companies enjoying investment incentives (for example a 10% incentive rate) continue to apply their granted incentive rate — they are not pulled back to 20%.

Two exclusion groups from 15%/17% (Article 18). Not every company within the revenue thresholds qualifies for 15%/17%:

• Article 18(3) — exclusion by income type: the 15%/17% rates do not apply to income from capital or capital-contribution transfers; real-estate transfers, investment-project transfers and related rights; business operations outside Vietnam; petroleum and other rare-resource/mineral exploration and exploitation; online gaming; goods and services subject to special consumption tax; and special cases as prescribed by the Government.
• Article 18(4) — exclusion by affiliation: the 15%/17% rates do not apply to a company that is a subsidiary or in an affiliated relationship where the affiliated enterprise is not one meeting the conditions for the rates in Article 10(2) and 10(3). This is the point FDI companies must watch most closely: a Vietnamese subsidiary of a foreign group does not automatically get 15%/17% merely because its revenue falls within the thresholds.

2.2. The revenue basis for determining the rate

This is the most technical — and most error-prone — point. The Law provides verbatim:

The revenue used to determine eligibility for the 15% and 17% rates is the total revenue of the immediately preceding CIT tax year.

In practice:

• To know which rate applies for 2026, a company looks at its actual total revenue for 2025 — not projected or year-to-date 2026 revenue.
• The method for determining total revenue follows Government regulations — specifically Article 11 of Decree 320/2025/ND-CP (companies should cite this article number when determining the figure).
• Consequence: companies must finalise the prior year's revenue figure before setting quarterly provisional CIT payments for the current year. If a company provisionally pays at 15% but year-end finalisation shows prior-year revenue above VND 3 billion, it must pay the shortfall plus late-payment interest.

2.3. Comparison with the 2008 CIT Law

The headline change is therefore not the 20% rate itself — which is familiar — but the fact that revenue size has become a rate-determining criterion for the first time: a company's total revenue determines a single rate among 15/17/20 applied to all of its ordinary taxable income not subject to exclusions or special rates, in place of the old general 20% rate. Among the special rates, only petroleum keeps its 25%–50% framework — the new law expressly provides that the Prime Minister sets the specific rate per contract; rare resources move to a different mechanism, from 32%–50% per project and business establishment to a fixed 50% (40% for mines in areas of exceptional difficulty).

3. Practical impact on businesses

Small companies (revenue ≤ VND 3 billion/year). The direct beneficiaries: CIT liability falls 25% compared with the old regime (from 20% to 15%). For a company with VND 1 billion of taxable income, tax payable drops from VND 200 million to VND 150 million — a material cash-flow difference for a small business. This is also the segment the policy is designed to nurture within the private sector.

Mid-size companies (revenue VND 3–50 billion/year). The 17% rate cuts the tax burden by about 15% versus the old flat rate. Notably, the VND 50 billion ceiling covers most small and medium enterprises in Vietnam, including many mid-size FDI companies in manufacturing, trade and services.

Mid-size FDI enterprises. Many FDI companies operating in Vietnam fall within the VND 3–50 billion band and may qualify for 17% without meeting investment-incentive conditions — but not automatically: under Article 18(4), a company that is a subsidiary or in an affiliated relationship cannot apply the 15%/17% rates if the affiliated enterprise does not meet the Article 10(2)/(3) conditions. This exclusion hits most FDI companies directly. Groups should also update their tax forecasting models: the effective CIT rate of the Vietnamese entity may now vary from year to year with prior-year revenue — a new volatility factor in financial planning.

Petroleum and mining. The 25%–50% petroleum band keeps its old-law framework; for rare resources the mechanism changes from 32%–50% per project and business establishment to a fixed 50%/40%. The new law also expressly provides that the Prime Minister sets the specific rate per petroleum contract, so companies must track the decision applicable to their own contract.

Common risk: provisional payment at the wrong rate. Because the current year's rate depends on the prior year's revenue, companies with revenue near the VND 3 billion or VND 50 billion thresholds face "bracket jump" risk. A revenue difference of just a few tens of millions of dong can shift the rate by 2–3 percentage points, and underpaying provisionally leads to a year-end shortfall plus late-payment interest under tax administration law.

To place these changes in the broader compliance picture, companies should cross-check our tax compliance guide for FDI enterprises and proactively prepare for tax inspections — misapplied CIT rates are a recurring focus of tax audits.

4. Action items and timelines

1. Review total revenue of the immediately preceding tax year (do now). Finalise the prior-year revenue figure under Article 11 of Decree 320/2025/ND-CP, then determine whether the company sits in the 15%, 17% or 20% bracket for the current year — while checking the two exclusion groups in Article 18(3) and 18(4) (income type; affiliation). This is priority number one — every provisional calculation depends on it.

1. Reset quarterly provisional CIT payments. Adjust provisional payments to the determined rate. Companies near the VND 3 billion or VND 50 billion thresholds should model fallback scenarios.

1. Update internal tax accounting policies. Build the annual rate-determination process into the tax handbook: who finalises the revenue figure, when, and how supporting records are kept.

1. Cross-check Circular 20/2026/TT-BTC (effective 12 March 2026). Review detailed guidance on taxable income, deductible expenses and incentives to apply consistently with the new rates.

1. Keep revenue evidence on file. Retain books, financial statements and returns supporting the total-revenue figure — the first documents the tax authority will ask for when reviewing a 15%/17% claim.

1. Companies in M&A or restructuring: update rate assumptions in valuation models, since the target's effective rate may change year to year. See also tax due diligence in M&A transactions and VAT refunds for FDI companies for the full picture.

5. Open points to monitor

Law 67/2025 and its guidance answer most questions, but several technical points still need watching and deserve a cautious, case-specific assessment:

• Detailed computation of "total revenue". The Law delegates this to the Government; the determination framework is in Article 11 of Decree 320/2025/ND-CP — but technical situations — intra-branch revenue, deductions and adjustments, or companies with a fiscal year different from the calendar year — still need careful checking against the guidance when applied.
• Newly established companies — guidance now exists. Under Article 8 of Circular 20/2026/TT-BTC, a newly established company uses its projected total revenue for the tax year to set quarterly provisional payments at 15%/17%; year-end finalisation follows actual revenue. If finalisation shows the conditions are not met, the company must pay the shortfall plus late-payment interest. The point to manage in practice: a supportable revenue projection and the file kept for finalisation.
• Mixed activities (incentive + ordinary). Companies with both Article 13 incentive projects and ordinary business need a clear revenue/income allocation method to determine the correct rate for each portion — further guidance is awaited here.
• Guidance details on "affiliated relationships" (Article 18(4)). The definition's scope and how to determine whether the affiliated enterprise meets the Article 10(2)/(3) conditions need checking against Decree 320/2025 and guidance instruments for each specific case — especially for FDI companies that are subsidiaries of foreign groups.
• The split 2025 tax year. The Law took effect on 1 October 2025 but applies from the 2025 CIT tax year (Article 19(1)), mid-way through most companies' 2025 tax year. Rate determination for 2025 must be checked against Circular 20/2026/TT-BTC and tax authority guidance; do not assume a single rate for the whole year.

These points show that applying the new rates correctly is not just about reading Article 10 — it requires reconciling law, decree and circular for each specific situation. Where uncertainty remains, choose the cautious option and keep full supporting records.

6. Frequently asked questions

Which year's revenue determines the 15% or 17% CIT rate?

The total revenue of the immediately preceding CIT tax year under Article 10 of Law 67/2025/QH15 — actual revenue of the prior year, not projected revenue for the current year. Example: the rate for 2026 is determined by total 2025 revenue. Next step: finalise the prior-year revenue figure under Decree 320/2025/ND-CP's definition before calculating the first quarter's provisional payment.

What rate applies to a newly established company with no preceding tax year?

Official guidance now exists: under Article 8 of Circular 20/2026/TT-BTC, a newly established company uses its projected total revenue for the tax year to set quarterly provisional payments — 15% if projected at no more than VND 3 billion, 17% if projected above VND 3 billion up to VND 50 billion. At year-end the company finalises against actual revenue; if the conditions for 15%/17% are not met, it must pay the shortfall plus late-payment interest under tax administration law. Next step: prepare a supportable revenue projection from the first period and keep the file for finalisation.

Do the 15%/17% rates apply to companies enjoying incentives under Article 13?

No. Article 10(1) expressly excludes entities entitled to preferential CIT rates under Article 13. Companies within an incentive period (for example a 10% rate) continue to apply their granted incentive rate until the incentive period ends.

Are there exclusions from the 15%/17% rates?

Yes. Article 18(3) excludes by income type: capital or capital-contribution transfers, real-estate and investment-project transfers and related rights, business operations outside Vietnam, petroleum and mineral/rare-resource exploration and exploitation, online gaming, goods and services subject to special consumption tax, and special cases as prescribed by the Government. Article 18(4) excludes by affiliation: a subsidiary or affiliated company cannot apply the 15%/17% rates if the affiliated enterprise does not meet the conditions in Article 10(2) and 10(3). Excluded income items and entities apply the 20% rate (or another preferential/special rate where applicable).

Is there a penalty for provisional CIT payments at the wrong rate?

If year-end finalisation shows underpayment due to a wrong rate, the company must pay the shortfall plus late-payment interest under tax administration law. There is no standalone penalty for "choosing the wrong bracket", but late-payment interest costs and audit-selection risk are real. Prevent it by reviewing the prior year's revenue early in the year.

When did Law 67/2025 take effect and what did it replace?

The Law on Corporate Income Tax 2025 (67/2025/QH15), passed 14 June 2025, took effect 1 October 2025 and applies from the 2025 CIT tax year (Article 19(1)), replacing the 2008 CIT Law. The two main implementing instruments are Decree 320/2025/ND-CP (15 December 2025) and Circular 20/2026/TT-BTC (effective 12 March 2026).

Need a tax health-check for your company?

Determining the right 15%/17%/20% rate is only one link in the overall tax-compliance chain — from provisional payments and finalisation to inspection readiness. If your company sits near the revenue thresholds, is restructuring, or runs mixed incentive and ordinary activities, let FLAT's tax lawyers review and recommend a safe approach. Call our hotline 0988424851 for advice.

References

• Law on Corporate Income Tax 2025 (67/2025/QH15): Article 10 (20%/15%/17% rates; Article 10(4)(a)/(b) — petroleum, rare resources), Article 13 (preferential rates), Article 18 (para 3: exclusions by income type; para 4: exclusion for affiliated relationships), Article 19 (effective 1 October 2025; applying from the 2025 CIT tax year). Note: the incentive rules in Law 67/2025 have been amended by Laws 133/2025, 116/2025 and 143/2025 — consult the consolidated text before expanding incentive content.
• Decree 320/2025/ND-CP dated 15 December 2025 implementing the 2025 CIT Law (Article 11: method for determining total revenue as the basis for 15%/17%).
• Circular 20/2026/TT-BTC, effective 12 March 2026, on corporate income tax (Article 8: newly established companies — projected revenue for provisional payments; finalisation against actual).
• Law on Corporate Income Tax 2008 (14/2008/QH12) — repealed, cited for comparison only.

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