Vietnam Corporate Tax 2026: Rates, Tiers and Incentives

Vietnam taxed company profits at a flat 20% for years, and most guides still say so.

That ended on 1 October 2025. On the same date, the tax incentive that almost every foreign manufacturer was told to plan around also ended.

This page sets out the rates that replaced the flat one, the exclusion that quietly removes the lower rates from most foreign subsidiaries, and what a company has to do now to qualify for an incentive.

Revenue up to VND 3bnrate, percent15

Revenue VND 3bn to 50bnrate, percent17

Revenue above VND 50bnrate, percent20

Incentive rate, qualifying projectsrate, percent10

The three tiers, and the test that picks one

Law No. 67/2025/QH15 was passed on 14 June 2025, took effect on 1 October 2025 and applies from the 2025 tax year.

• The test uses revenue from the immediately preceding year, not the current one, so a company's rate is known before the year begins.
• The method of computing that revenue is left to government regulation, which means the detail belongs to the decree rather than the law.
• VND 3 billion is roughly USD 115,000 and VND 50 billion roughly USD 1.9 million, at around VND 26,000 to the dollar.
• A first year company has no preceding year, which is a question for the decree rather than an assumption to make.
• The tiers are revenue based, not profit based, so a high turnover business on thin margins can sit in the 20% band while earning very little.
• Crossing a threshold changes the rate for the whole of the following year, which makes the December revenue position worth watching in a business near a boundary.

The exclusion that removes the lower rates from most foreign subsidiaries

This is the single most important sentence on the page for anyone reading it as a foreign investor.

The 15% and 17% rates do not apply to a subsidiary or related company where the parent or related company does not itself meet the conditions.

1. 1
   Is the company part of a group?A subsidiary or a related company of another enterprise
2. 2
   If yes, does the parent or related company also meet the conditions?If it does not, the reduced rates are unavailable regardless of local revenue
3. 3
   If standalone, what was revenue in the preceding year?Up to VND 3bn gives 15 percent, up to VND 50bn gives 17 percent
4. 4
   Otherwise the rate is 20 percentBefore any project incentive, which is assessed separately

The practical consequence is uncomfortable and worth stating plainly.

• A newly formed Vietnamese subsidiary of a normal sized foreign group pays 20%, even in a first year with almost no revenue.
• The tiers are a small business policy, aimed at genuinely small enterprises rather than at small entities inside larger structures.
• An individual founder without a corporate group is in a different position and may reach the tiers on their own revenue.
• Structuring around the exclusion is the wrong instinct, because related party rules exist precisely to test it.

If you are modelling a Vietnamese entry for a group, model 20% and treat anything lower as upside that needs to be established rather than assumed.

The incentive that ended on 1 October 2025

For years the standard advice to a manufacturer entering Vietnam was to locate inside an industrial park, which carried an automatic incentive: two years exempt from corporate income tax, then four years at half the rate, under Decree 218/2013/ND-CP.

Until 2025Industrial park location gives 2 years exempt then 4 years at half rate

14 Jun 2025Law 67/2025 on corporate income tax is passed

1 Oct 2025The law takes effect and industrial zone incentives are eliminated

Dec 2025Decree 320/2025 removes industrial parks from the qualifying areas list

1. Until 2025Industrial park location gives 2 years exempt then 4 years at half rate
2. 14 Jun 2025Law 67/2025 on corporate income tax is passed
3. 1 Oct 2025The law takes effect and industrial zone incentives are eliminated
4. Dec 2025Decree 320/2025 removes industrial parks from the qualifying areas list

• An industrial park is no longer an independent legal basis for determining incentive eligibility.
• New projects located in an industrial park are not automatically entitled to the incentive mechanism.
• The location itself has not become worthless, because infrastructure, permits and labour supply were always part of the case, and for most manufacturers those were always the larger part of it.
• What has gone is the tax reason for choosing it, and that was often the reason presented first.

A feasibility model built on the old assumption overstates the after tax return of a Vietnamese factory by a substantial margin in its early years. This is worth re running rather than reasoning around.

What qualifies for an incentive now

Incentives moved from where you are to what you do, with location retained only for genuinely disadvantaged areas.

The last row is a genuine improvement on the old regime, which capped the 10% rate at 15 years and 30 in exceptional cases. For a project that qualifies, an incentive for the life of the operation is materially more valuable than a fifteen year one.

Eligibility is recorded against the project, which means it is decided at the investment certificate stage rather than at the tax return. That places the incentive question upstream, in how to register a company in Vietnam.

What makes an expense deductible, and the threshold that vanished

The rate decides what you pay on profit. Documentation decides what counts as profit, and the rule here changed on 1 July 2025.

Under the Law on Value Added Tax No. 48/2024/QH15, passed on 26 November 2024, the VND 20 million threshold for cash payments was removed.

• Every transaction now needs non cash payment evidence to support an input credit, whatever its size, except in cases the Government prescribes.
• Small routine spending is where this bites, because it is the spending most likely to have been settled in cash.
• The change is aimed at electronic payment adoption, and enforcement follows the paper trail rather than the amount.
• A guide that still quotes VND 20 million as a live threshold was written before July 2025.

For a small foreign owned company this is a bookkeeping discipline rather than a tax planning question, and it is one of the more common reasons a first year audit produces adjustments. Set the payment policy on day one rather than reconstructing it at the year end.

Related party rules, and the decree that replaced them in July 2026

If the group exclusion above applies to you, the related party rules apply to you too, and they were consolidated three months before this page was written.

Decree No. 255/2026/ND-CP, issued on 30 June 2026 and applying from the 2026 corporate income tax period, repealed Decree 132/2020/ND-CP and Decree 20/2025/ND-CP and replaced both with a single instrument.

The figures that circulate in every guide come from the repealed decree, so they need care.

• A thinly capitalised Vietnamese subsidiary funded by shareholder debt is the classic case the interest cap is aimed at, and it is common in first year FDI structures.
• The cap applies to net interest, so intragroup lending in both directions is measured together.
• Disallowed interest is not lost, it is carried forward, which changes the timing rather than the total.
• Anything quoted from Decree 132/2020 needs re checking against Decree 255/2026 before it goes into a model.
• Related party filings are annual and separate from the corporate tax return, and they are among the obligations most often left outside a bookkeeping engagement.

This page does not restate the 30% figure as current law, because the instrument that contained it has been repealed and the sources reviewed do not confirm what the replacement says. Ask your adviser what Decree 255/2026 provides rather than assuming continuity.

Foreign companies without a Vietnamese entity

The 2025 law also widened who is inside the Vietnamese tax net without being established there.

• E-commerce and digital platform businesses are now recognised within the definition of a permanent establishment.
• A foreign enterprise without a permanent establishment remains taxable on income sourced from Vietnam, regardless of where the activity is carried out.
• Tax is charged as a percentage of total revenue in those cases, under government regulation, rather than on profit.
• A draft decree proposed 2% on capital transfers by owners who do not directly manage the enterprise, and that remains a proposal rather than law.

The treatment of income earned without a local entity is set out in Vietnam tax for non-residents.

The filing rhythm

• Corporate income tax is paid provisionally during the year, then finalised annually.
• The annual finalisation follows the financial year end, and the audited financial statements are due within 90 days of it.
• For a foreign owned company the audit is compulsory, with no exemption by size, so the finalisation depends on it.
• Profit cannot be remitted abroad until the finalisation and the audited statements are filed.

The chain from year end to money leaving Vietnam runs through the audit, which is why the audit deadline is a cash flow date rather than a compliance one.

Three consequences follow for planning, and none of them is about the tax rate.

• The audit engagement should be appointed early in the year, not after the year end, because auditor availability tightens around the deadline.
• A group with a December year end is competing for the same audit capacity as every other foreign owned company in Vietnam.
• Any expectation of a dividend should be dated from the audit completion rather than from the year end.

The full calendar of returns and filings is set out in Vietnam company compliance.

The bottom line

Two changes on 1 October 2025 matter more than the headline rate. The flat 20% became a three tier scale, and the industrial park stopped being a tax reason to choose a site.

For most readers of this page the first change is neutral, because the group exclusion keeps a foreign owned subsidiary at 20%. The second change is not neutral at all if the plan involves manufacturing.

Model at 20%, treat any incentive as something to be established at the investment certificate stage, and re run any feasibility study that assumed two years free followed by four years at half rate. That assumption expired.

Then look at the documentation rules rather than the rate. For a company of the size most readers of this page are building, the difference between a clean set of records and an untidy one moves the tax bill further than any tier does.