VI What percentage of corporate income tax do businesses with annual total revenue under 3 billion VND pay? Details of current corporate income tax rates? How is the corporate income tax period determined? What are the conditions for applying corporate income tax incentives? Let’s find out more with Pham Consult!
What percentage of corporate income tax do businesses with annual total revenue under 3 billion VND pay? Details of current corporate income tax rates?
Details of current corporate income tax rates are stipulated in Article 11 of Decree 320/2025/ND-CP, specifically:
(1) The corporate income tax rate is 20%, except for cases specified in Clauses 2, 3 and 5 of Article 11 of Decree 320/2025/ND-CP and subjects entitled to preferential tax rates as stipulated in Article 19 of Decree 320/2025/ND-CP.
(2) A tax rate of 15% applies to enterprises with total annual revenue not exceeding VND 3 billion.
(3) A tax rate of 17% applies to enterprises with total annual revenue from over VND 3 billion to not exceeding VND 50 billion.
(4) The total revenue used as a basis to determine whether an enterprise is subject to the 15% and 17% tax rates stipulated in Clauses 2 and 3 of Article 11 of Decree 320/2025/ND-CP is the total revenue from sales and service provision (excluding revenue deductions), revenue from financial activities and other income on the Appendix of business performance results attached to the corporate income tax final settlement declaration of the tax period of the immediately preceding year.
– In case the enterprise has an operating period of less than 12 months in the immediately preceding tax period, the total revenue of the immediately preceding tax period is determined by dividing the actual total revenue in that tax period by the number of months the enterprise actually operated in production and business in the tax period and multiplying by 12 months.
– For newly established businesses, businesses changing their business type, changing their ownership structure, merging, acquiring, splitting, or separating in any month of the preceding tax year, the operating period is calculated in full months;
– For newly established businesses in the tax period with projected total revenue not exceeding VND 3 billion or VND 50 billion, the business shall determine quarterly provisional tax payments at the corresponding tax rates of 15% or 17%.
At the end of the tax period, if the actual total revenue in the tax period is as projected as stipulated in this point, the business shall declare and settle corporate income tax according to regulations.
If the actual total revenue does not meet the conditions to enjoy the corresponding projected tax rate as stipulated in this point, resulting in underpayment compared to the provisional tax payable as stipulated, the business shall pay the remaining tax amount and late payment penalties as prescribed by the law on tax administration;
– The 15% and 17% tax rates stipulated in Article 11 of Decree 320/2025/ND-CP do not apply to enterprises established under Vietnamese law that are subsidiaries or affiliated companies where the affiliated enterprise is not an enterprise meeting the conditions for applying the tax rates stipulated in Clauses 2 and 3 of Article 11 of Decree 320/2025/ND-CP.
(5) Corporate income tax rates for some other cases are stipulated as follows:
– For oil and gas exploration, prospecting and exploitation activities, from 25% to 50%. Based on the location, exploitation conditions and reserves of the field, the Prime Minister decides the specific tax rate suitable for each oil and gas contract;
– For exploration and exploitation of rare resources (including: platinum, gold, silver, tin, tungsten, antimony, gemstones, rare earth elements, and other rare resources as stipulated by law), the tax rate is 50%. In cases where mines have 70% or more of their allocated area in areas with particularly difficult socio-economic conditions, the tax rate is 40%.
Therefore, for businesses with total annual revenue under 3 billion VND, a tax rate of 15% applies.
How is the corporate income tax period determined?
According to Article 5 of the Corporate Income Tax Law 2025, the following applies:
Tax Period
- The corporate income tax period is determined according to the calendar year or fiscal year chosen by the business, except as stipulated in Clause 2 of this Article. If the business chooses a fiscal year different from the calendar year, it must notify the directly managing tax authority before implementation.
- The tax period for enterprises specified in points c and d of Clause 2, Article 2 of this Law shall be implemented in accordance with the provisions of the law on tax administration.
Accordingly, the corporate income tax period is determined according to the calendar year or fiscal year chosen by the enterprise, except for the cases specified in Clause 2, Article 5 of the 2025 Corporate Income Tax Law.
If the enterprise chooses a fiscal year different from the calendar year, it must notify the directly managing tax authority before implementation.
The tax period for enterprises specified in points c and d, Clause 2, Article 2 of the 2025 Corporate Income Tax Law shall be implemented according to the provisions of the law on tax management.
What are the conditions for applying corporate income tax incentives?
Based on the provisions of Article 18 of the 2025 Corporate Income Tax Law on the conditions for applying corporate income tax incentives, the following are specific:
(1) Corporate income tax incentives specified in Articles 13, 14 and 15 of the 2025 Corporate Income Tax Law apply to enterprises implementing accounting, invoice, and document systems and paying taxes using the declaration method. . Corporate income tax incentives for new investment projects (including investment projects under point g, clause 2, Article 12 of the 2025 Corporate Income Tax Law) stipulated in Articles 13 and 14 of the 2025 Corporate Income Tax Law do not apply to cases of mergers, consolidations, divisions, separations, changes of ownership, changes in business type, and other cases as prescribed by the Government.
(2) Enterprises must separately account for income from production and business activities that are tax-incentivized as stipulated in Articles 4, 13, 14, and 15 of the 2025 Corporate Income Tax Law from income from production and business activities that are not tax-incentivized;
If separate accounting is not possible, the income from production and business activities that are tax-incentivized shall be determined according to the ratio between the revenue or expenses of the tax-incentivized production and business activities and the total revenue or total expenses of the enterprise.
(3) The tax rates of 15% and 17% stipulated in Clause 2 and Clause 3 of Article 10 of the 2025 Corporate Income Tax Law and the tax incentives stipulated in Articles 4, 13, 14, and 15 of the 2025 Personal Income Tax Law do not apply to:
– Income from capital transfer, transfer of capital contribution rights; income from real estate transfer, except income from investment in social housing construction as stipulated in point s, Clause 2, Article 12 of the 2025 Corporate Income Tax Law; income from transfer of investment projects (except transfer of mineral processing projects), transfer of rights to participate in investment projects, transfer of rights to explore, exploit, and process minerals; income from production and business activities outside Vietnam;
– Income from activities of searching, exploring and exploiting oil and gas, other rare resources and income from mineral exploration and exploitation activities;
– Income from the production and business of online electronic games; income from the production and business of goods and services subject to special consumption tax as prescribed by the Law on Special Consumption Tax 2025, except for projects producing and assembling automobiles, airplanes, helicopters, gliders, yachts, and oil refining;
– Special cases as prescribed by the Government.
(4) The 15% and 17% tax rates stipulated in Clauses 2 and 3 of Article 10 of the Law on Corporate Income Tax 2025 do not apply to enterprises that are subsidiaries or affiliated companies where the affiliated enterprise is not an enterprise meeting the conditions for applying the tax rates stipulated in Clauses 2 and 3 of Article 10 of the Law on Corporate Income Tax 2025.
(5) In cases where an enterprise does not meet the conditions for tax incentives, the competent authority shall collect back taxes and impose penalties for violations as prescribed by law.
(6) The Government shall provide detailed regulations for Clause 5 of this Article. The Ministry of Finance shall prescribe the procedures and documents for enjoying tax incentives as prescribed in Articles 4, 13, 14 and 15 of the 2025 Corporate Income Tax Law.
