A 17% tax rate applies to enterprises with annual total revenue exceeding VND 3 billion but not exceeding VND 50 billion

CORPORATE INCOME TAX POLICY ANNOUNCEMENT

PREFERENTIAL TAX RATE OF 17%: SPECIAL SUPPORT POLICY FOR SMALL AND MEDIUM ENTERPRISES (SMEs) WITH ANNUAL REVENUE EXCEEDING VND 3 BILLION BUT NOT EXCEEDING VND 50 BILLION

Effective from October 1, 2025 under the Corporate Income Tax Law 2025 (Law No. 67/2025/QH15), the 17% CIT rate is a pivotal incentive policy for SMEs. It enables medium-revenue enterprises to significantly optimize their tax costs. LTS Law Firm provides a detailed analysis of the eligibility criteria for applying the 17% preferential tax rate for businesses with annual revenue exceeding VND 3 billion but not exceeding VND 50 billion.

The 17% CIT rate is a major tax incentive designed to reduce the tax burden on medium-sized enterprises and encourage micro-enterprises to scale up.

I. Legal Basis and Eligibility Criteria for the 17% Tax Rate

The 17% CIT rate is stipulated in Clause 3, Article 10 of the Corporate Income Tax Law 2025.

1. Scope of Application

The 17% CIT rate applies to enterprises meeting the following conditions:

Legally established in Vietnam (including companies, cooperatives, and public service units generating taxable income).
Annual total revenue: Exceeds VND 3 billion but does not exceed VND 50 billion.

2. Significance of Tiered Tax Rates

Applying the 17% rate (3% lower than the standard 20%) reflects the government’s clear direction in:

Supporting SMEs: Enhancing cash flow and profit accumulation for reinvestment.
Promoting Growth: Encouraging businesses reaching the VND 3 billion threshold to expand operations.
Policy Balance: Ensuring fair tax obligations across enterprise groups based on contribution capacity.
Encouraging Scale-Up: Motivating businesses currently enjoying the 15% rate to grow revenue while still benefiting from significant incentives.

II. Revenue Determination Principles and Filing Responsibilities

Enterprises must understand revenue determination principles to correctly apply the 17% tax rate.

1. Revenue Basis for Tax Rate Eligibility

Revenue used to determine eligibility for the 17% rate is the total revenue from the preceding tax period. It includes all sales, service income, and other earnings during the tax period as defined by tax regulations. Detailed methods and rules will be guided by the Government in sub-law documents.

2. Special Compliance Responsibilities

Enterprises eligible for the 17% rate must self-assess and declare this rate when finalizing CIT returns.

⚠️ Restriction Note: Similar to the 15% rate, the 17% preferential rate does not apply to enterprises with related-party transactions if any party fails to meet the eligibility conditions (Clause 4, Article 18, CIT Law 2025).

III. Tax Advisory and Compliance Services from LTS Law Firm

The tiered CIT structure under the 2025 Law requires accurate and transparent revenue data management to avoid legal risks.

LTS Law Firm offers professional tax advisory services for businesses with revenue between VND 3 billion and VND 50 billion:

Eligibility Review: Verify and confirm accurate prior-year revenue to ensure qualification for the 17% rate.
Tax Filing Support: Prepare and submit CIT finalization documents applying the preferential rate, ensuring full compliance with the 2025 Law and related guidance.
Risk Management: Advise on related-party transactions and relevant clauses to avoid disqualification from the incentive.

Contact LTS Law Firm for expert support to help your business maximize benefits from the new tax policy.

LTS LAW – Dedicated Legal Support in Ho Chi Minh City LTS LAW specializes in legal consulting and handling matters for individuals and businesses, including company formation, licensing, foreign investment advisory, contract drafting, and dispute resolution.

📌 Office Address: 520 Cach Mang Thang Tam Street, Nhieu Loc Ward, Ho Chi Minh City

📞 Hotline/Zalo: +84 902 798 066 / +84 965 000 524

🌐 Website: https://lts.com.vn

Contact LTS LAW for tailored, accurate, and case-specific legal advice for your business.

Chief Accountant Services

Our services cover:

We will perform a review and provide approval for accounting vouchers, including payment vouchers, receipt vouchers, and journal vouchers
We will carefully review and provide sign-off on the financial statements of the company
We will facilitate communication and collaboration with the company, auditors, and tax authorities on routine matters, excluding tax audits

Annual Business Licensing Tax Assistance

Our services cover:

Working hand in hand with you to collect required information
Assess whether your company must annually file a business licensing tax declaration, then proceed to prepare and submit the tax declaration to the local tax authorities if applicable
Notify and provide instructions regarding the payable tax amount and the requirement for payment by the 30th of January each year

Comprehensive PIT Self-Finalization Services

Our services cover:

Collaborating with you to gather any required information
Determining the PIT payable and notifying you of the amount owed to the local tax authorities
Compiling the PIT finalization and submitting it to you for approval prior to forwarding it to the local tax authorities on time
Obtaining the tax receipt and certification of paid taxes (if applicable)

Comprehensive Withholding Tax (WHT) Supports

Our services cover:

Applying for a tax code for foreign contractors
Filing Withholding Tax (WHT) liability as and when it is incurred

Comprehensive Value Added Tax (VAT) Supports

Our services cover:

Working hand in hand with you to collect required information
Compiling monthly or quarterly VAT declarations in accordance with current requirements, ensuring thorough consideration of all potential VAT claims, and submitting it to you for approval
Filing the VAT declaration on a monthly or quarterly basis to the local tax authorities
Keeping you in the loop regarding opportunities and the timetable for VAT refund claims (if applicable)

Corporate Income Tax (CIT) Compliance and Filing Supports

Our services cover:

Collaborating with you to gather any required information
Determining the CIT payable every quarter and notifying you of the amount owed to the local tax authorities
Compiling the annual Corporate Income Tax (CIT) finalization and submitting it to you for approval prior to forwarding it to the local tax authorities within 90 days of the financial year-end date
Obtaining the annual tax receipt and certification of paid taxes (if applicable)

Support for Audits

In particular, we can support the audit process with additional assistance tailored to your needs:

Taking part in audit planning meetings and engaging with your auditors
Participating in and supporting audit fieldwork alongside your auditors
Examining, counseling, and coordinating in relation to audit findings from your auditors
Additional deliberations/counsel to management derived from the audits

We're committed to supplying the relevant information in our possession to assist your auditors. This could involve mandatory Vietnamese Audits (as necessitated for foreign-owned companies in Vietnam), imperative group audits for parent company consolidation, or interim audits for transactional clarity.

Bookkeeping, Financial Reporting, and General Ledger Maintenance.

Our services include:

Monthly VAS reports
Monthly reconciliation of bank accounts
Monthly preparation of vouchers
Monthly reviews of accruals
Monthly reconciliation of bank accounts
General ledger maintenance

Annual Financial Reporting We are committed to compiling comprehensive annual financial statements following VAS guidelines, along with essential reports for tax filing and audit needs. Alongside crafting a VAS-compliant general ledger, we offer support in creating monthly management financial reports, enabling strategic decision-making while upholding adherence to local and international industry standards.

Home > Insight > A 17% tax rate applies to enterprises with annual total revenue exceeding VND 3 billion but not exceeding VND 50 billion

A 17% tax rate applies to enterprises with annual total revenue exceeding VND 3 billion but not exceeding VND 50 billion

CORPORATE INCOME TAX POLICY ANNOUNCEMENT

PREFERENTIAL TAX RATE OF 17%: SPECIAL SUPPORT POLICY FOR SMALL AND MEDIUM ENTERPRISES (SMEs) WITH ANNUAL REVENUE EXCEEDING VND 3 BILLION BUT NOT EXCEEDING VND 50 BILLION