i. Standard tax rates
The most current standard corporate income tax (CIT) rate is 20% (as specified in Article 11 of Circular 78/2014/TT-BTC).
There is no concept of tax residency for corporate income tax like personal income tax. Business organizations registered under the Vietnamese laws are subject to corporate income tax and taxed on worldwide income.
Such standard rate will not apply to several typical businesses as follows:
+ The corporate income tax rate applicable to petroleum prospecting, exploration and extraction in Vietnam is from 32% to 50%. Based on the exploitation location, exploitation conditions and field reserve, the enterprise having an investment project to search, explore and exploit oil and gas shall send the investment project dossier to the Ministry of Finance for submission to the Prime Minister. decide specific tax rates for each project, each business establishment.
+ Corporate income tax rate for the search, exploration and exploitation of rare natural resources (including: platinum, gold, silver, tin, wonfram, antimony, gemstones, rare earths except petroleum ) the tax rate of 50% applies; For rare and precious natural resources mines with at least 70% of the assigned area in geographical areas with extremely difficult socio-economic conditions on the list of geographical areas eligible for enterprise income tax, promulgated together with the Decree No. 218/2013/ND-CP of the Government applies the corporate income tax rate of 40%.
Besides, in practice, there will be many foreign organizations performing business activities in Vietnam and getting profit from such business. They are considered as foreign contractors Payments to such foreign contractors will be subject to foreign contractor tax (FCT), which includes both value added tax (VAT) and corporate income tax (CIT).
Ii. Preferential tax rates
Under the prevailing laws, there are preferential tax rates of 10% and 17%. Such preferential rates will apply when certain criteria are met.
For more information, you can find detailed at the Article on Incentives on Corporate Income Tax When Investing In Vietnam
The following pieces of legislation, regulations, and documents are the grounds mainly governing the tax imposed on corporate income tax:
– The 2008 Law on Corporate Income Tax (amended in 2013 and 2014);
– Decree 92/2013/ND-CP on detailing implementation of a number of articles that take effect on July 01, 2013 of the law amending and supplementing a number of articles of the law on enterprise income tax and law amending and supplementing a number of articles of law on value added tax;
– Decree No. 218/2013/ND-CP on detailing and guiding the implementation of law on corporate income tax;
– Circular No. 78/2014/TT-BTC guiding the implementation of the Government’s Decree No. 218/2013/ND-CP of December 26, 2013, detailing and guiding the implementation of the law on corporate income tax;
– Circular No. 96/2015/TT-BTC on guidelines for corporate income tax in the Government’s Decree No. 12/2015/NĐ-CP dated February 12, 2015 on guidelines for the law on amendments to laws on taxation and amendments to decrees on taxation; amendments to some articles of Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, and Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance.
– Circular No. 119/2014/TT-BTC on amendments to some articles of Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014, and Circular No. 78/2014/TT-BYC dated June 18, 2014 of the Ministry of Finance in order to simplify tax formalities.
– Circular No. 151/2014/TT-BTC on providing guidance on Decree No. 91/2014/ND-CP dated October 1, 2014 of the Government on amendments to decrees on taxation.