VI What are the conditions for deductible expenses when calculating corporate income tax under current law? How is the corporate income tax rate applied to each type of enterprise regulated? How is the corporate income tax period regulated? Let’s find out more with Pham Consult!
What are the conditions for deductible expenses when calculating corporate income tax under current law?
According to the provisions of Clause 1, Article 9 of the Law on Corporate Income Tax 2025, the conditions for deductible expenses when calculating corporate income tax are as follows:
(1) Not included in the expenses specified in Clause 2, Article 9 of the Law on Personal Income Tax 2025
First, for an expense to be deductible when calculating corporate income tax, it is necessary to ensure that the expense does not fall into the non-deductible expenses as prescribed.
(2) Meeting the conditions for deductible expenses
– Actual expenses incurred related to the production and business activities of the enterprise, including additional expenses deductible according to the percentage calculated on actual expenses incurred in the tax period related to the research and development activities of the enterprise
– Other actual expenses incurred, including:
+ Expenses for performing national defense and security education tasks, training, activities of militia and self-defense forces and serving other national defense and security tasks as prescribed by law
+ Expenses to support the activities of party organizations and socio-political organizations in the enterprise
+ Expenses for vocational education and vocational training for employees as prescribed by law
+ Actual expenses for HIV/AIDS prevention and control activities in the workplace of the enterprise
+ Funding for education, health care, culture; funding for prevention, control and overcoming the consequences of natural disasters and epidemics, building solidarity houses, gratitude houses, houses for policy beneficiaries according to the provisions of law; funding according to the provisions of the Government and the Prime Minister for localities in areas with particularly difficult socio-economic conditions; funding for scientific research, technology development and innovation, digital transformation; + Expenditures for scientific research, technological development and innovation, digital transformation
+ The value of losses due to natural disasters, epidemics and other force majeure events are not compensated
+ Actual expenditures for persons seconded to participate in the administration, operation and control of specially controlled credit institutions, commercial banks that are compulsory transferred according to the provisions of the Law on Credit Institutions
+ Some expenditures serving the production and business of enterprises but not corresponding to the revenue generated in the period according to the Government’s regulations
+ Some expenditures supporting the construction of public works, at the same time serving the production and business activities of enterprises
+ Expenses related to the reduction of greenhouse gas emissions to neutralize carbon and net zero, reduce environmental pollution, at the same time related to the production and business activities of enterprises
+ Some contributions to funds established according to the Prime Minister’s decision and the Government’s regulations
– Expenditures with sufficient invoices and payment documents non-cash payments as prescribed by law, except for special cases as prescribed by the Government.
Thus, expenses that fully meet the above conditions will be deducted when calculating corporate income tax as prescribed by law.
How is the corporate income tax rate applied to each type of enterprise regulated?
According to Article 10 of the Law on Corporate Income Tax 2025, the corporate income tax rate is as follows:
– The corporate income tax rate is 20%, except for the cases specified in Clauses 2, 3 and 4, Article 10 of the Law on Corporate Income Tax 2025 and the subjects eligible for tax rate incentives specified in Article 13 of the Law on Corporate Income Tax 2025.
– The tax rate of 15% applies to enterprises with total annual revenue of no more than VND 3 billion.
– The tax rate of 17% applies to enterprises with total annual revenue from over VND 3 billion to no more than VND 50 billion.
Revenue used as the basis for determining whether an enterprise is eligible for the 15% and 17% tax rates prescribed in Clause 2 and Clause 3, Article 10 of the 2025 Law on Corporate Income Tax is the total revenue of the previous corporate income tax period. The determination of total revenue used as the basis for application shall be implemented in accordance with Government regulations.
– Corporate income tax rates for a number of other cases are prescribed as follows:
+ For oil and gas exploration and exploitation activities from 25% to 50%. Based on the location, exploitation conditions and mine reserves, the Prime Minister shall decide on a specific tax rate appropriate to each petroleum contract
+ For exploration and exploitation of rare resources (including: platinum, gold, silver, tin, tungsten, antimony, precious stones, rare earth and other rare resources as prescribed by law) is 50%. In the case of mines with 70% or more of the assigned area in areas with particularly difficult socio-economic conditions, the tax rate is 40%.
How is the corporate income tax period regulated?
According to the provisions of Article 5 of the Law on Corporate Income Tax 2025, the corporate income tax period is as follows:
– The corporate income tax period is determined according to the calendar year or the fiscal year chosen by the enterprise, except for the case specified in Clause 2, Article 5 of the Law on Corporate Income Tax 2025. In case the enterprise chooses a fiscal year other than the calendar year, it must notify the direct tax authority before implementation.
– For foreign enterprises with permanent establishments in Vietnam paying tax on taxable income arising in Vietnam that is not related to the activities of the permanent establishments and foreign enterprises without permanent establishments in Vietnam, including enterprises engaged in e-commerce and digital platform-based businesses, paying tax on taxable income arising in Vietnam, the corporate income tax calculation period shall be implemented in accordance with the provisions of the law on tax administration.
