VI When determining income for which a company is subject to corporate income tax, which ATTRIBUTES are not deductible? How is taxable income for corporate income tax determined? How is the corporate income tax rate regulated? Let’s find out more with Pham Consult!
When determining income for which a company is subject to corporate income tax, which ATTRIBUTES are not deductible?
Pursuant to Clause 2, Article 9 of the Law on Corporate Income Tax 2025, the following non-deductible items are stipulated in determining corporate income tax:
– Expenses that do not meet the conditions specified in Clause 1, Article 9 of the Law on Corporate Income Tax 2025
– Fines for administrative violations
– Expenses that are offset by other funding sources
– Expenses exceeding the level prescribed by the Government for: business management expenses allocated by foreign enterprises to permanent establishments in Vietnam; expenses for hiring managers for business activities of electronic games with prizes, casino business; interest payments on loans of enterprises with related transactions; expenses of a direct welfare nature for employees; contributions to supplementary pension insurance as prescribed by the Law on Social Insurance 2024 or funds of a social security nature, purchase of voluntary pension insurance, life insurance for employees;
– The portion of provisioning is incorrect or exceeds the level prescribed by law on provisioning
– The portion of fixed asset depreciation is incorrect or exceeds the level prescribed by law
– The portion of advance provisioning for expenses is not in accordance with the provisions of law
– Salaries and wages of owners of private enterprises and owners of single-member limited liability companies owned by individuals; remuneration paid to founders of enterprises who are not directly involved in production and business management; salaries, wages, and other accounting expenses to pay employees but are not actually paid or do not have invoices or documents as prescribed by law
– The portion of loan interest payments corresponding to the remaining charter capital; loan interest during the investment process that has been recorded in the investment value; loan interest to implement contracts for oil and gas exploration, survey and exploitation; Interest payments on loans for production and business of entities other than credit institutions exceeding the limit prescribed by the 2015 Civil Code
– Expenses that are allowed to be recovered exceeding the rate prescribed in the approved petroleum contract; in case the petroleum contract does not stipulate a cost recovery rate, the expenses exceeding the level prescribed by the Government shall not be included in deductible expenses;
– Input value-added tax that has been deducted; value-added tax paid according to the deduction method; input value-added tax on the value of passenger cars with 09 seats or less exceeding the level prescribed by the Government; corporate income tax; other taxes, fees, charges and revenues not included in expenses according to the provisions of law and late payment fees according to the provisions of law on tax administration.
+ The value added tax paid by the deduction method prescribed in this point does not include the value added tax of input goods and services directly related to the production and business of the enterprise that has not been fully deducted but is not subject to tax refund.
+ The input value added tax amount, once included in the deductible expenses, cannot be deducted from the output value added tax amount
+ Expenses that do not correspond to taxable revenue, except for expenses specified in Point b, Clause 1, Article 9 of the Law on Corporate Income Tax 2025; expenses that do not meet the conditions for expenditure and expenditure contents according to the provisions of specialized laws
– Sponsorship, except for sponsorships specified in sub-point b5, Point b, Clause 1, Article 9 of the Law on Corporate Income Tax 2025
– Expenses for basic construction investment in the investment phase to form fixed assets; Expenses directly related to the increase or decrease of the enterprise’s equity
– Expenses of business activities: banking, insurance, lottery, securities, BT, BOT, BTO contracts that are not in accordance with or exceed the legal regulations
– Other expenses.
How is taxable income determined for corporate income tax?
Based on Article 7 of the Law on Corporate Income Tax 2025, the provisions on determining taxable income are as follows:
(1) Taxable income in the tax period is determined as follows:
Taxable income = Taxable income – (Tax-exempt income + Losses carried forward as prescribed)
(2) Taxable income specified in Clause 1 of this Article is determined as follows:
Taxable income = Revenue – Deductible expenses + Other income (including income received outside Vietnam)
(3) For enterprises with many production and business activities in the tax period, taxable income from production and business activities is the total income of all production and business activities.
+ In case of loss in production and business activities, the loss shall be offset against the taxable income of production and business activities with income chosen by the enterprise (except for income from real estate transfer, investment project transfer, transfer of investment project participation rights, which is not offset against income from production and business activities currently enjoying tax incentives).
+ The remaining income after offset shall apply the corporate income tax rate of production and business activities with income.
(4) Taxable income from transfer of investment projects for mineral exploration, exploitation and processing; transfer of rights to participate in investment projects for mineral exploration, exploitation and processing; transfer of mineral exploration, exploitation and processing rights must be determined separately for tax declaration and payment; losses and profits cannot be offset against production and business activities in the tax period.
How is the corporate income tax rate regulated?
Pursuant to Article 10 of the Law on Corporate Income Tax 2025, the corporate income tax rate is stipulated as follows:
(1) The corporate income tax rate is 20%, except for the cases specified in (2), (3), (4) and the subjects entitled to tax rate incentives specified in Article 13 of the Law on Corporate Income Tax 2025
(2) The tax rate of 15% applies to enterprises with total annual revenue not exceeding VND 3 billion
(3) The tax rate of 17% applies to enterprises with total annual revenue from over VND 3 billion to not exceeding VND 50 billion
+ The revenue used as the basis for determining enterprises subject to the tax rate of 15% and 17% specified in (2) and (3) is the total revenue of the previous corporate income tax period. The determination of total revenue as a basis for application is implemented according to Government regulations
(4) Corporate income tax rates for some 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 decides on a 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 and other rare resources as prescribed by law) is 50%.
+ In case of mines with 70% or more of the assigned area in areas with particularly difficult socio-economic conditions, the tax rate is 40%.
