Tax incentives in Viet Nam (2020)

Tax incentives in Viet Nam (2020)

Tax incentives in Viet Nam (2020)

Tax incentives:

As mentioned in the previous posts, most companies in Vietnam are taxed at a 20% corporate income tax rate (CIT), some special industries with tax rate 32%, 50%. However, there are tax incentives available, depending on the industry and location of your business. In other words, sectors and locations that are highly encouraged by the government receive CIT incentives (as decree 218/2013/ND-CP by the Government).

There are two main types of tax incentives in Vietnam:

  • Preferential tax rates – reduced tax rates
  • Tax holidays – tax exempted for a certain period of time or throughout the project


#1 Preferential tax rate in Viet Nam

In some industries, the corporate income tax (CIT) is preferential for the whole period of operation or a period of year:

1.1.Preferential tax rate at 10% for 15 years as follows:

-Corporate income from new investment projects in special difficult socio-economic areas.

-Corporate income from sectors: Research, technology development (R&D), high-tech, water supply plant, electricity supply plant, drainage system, air port, sea port, renewable enery plant, software, composite materials, bio technology, environment protection etc.

-Corporate income from new investment projects in production sectors with minimum registered capital 6000 billion VND and scale is over 3000 regular employees and disbursement period is under 3 years. .

-Corporate income from projects in production sectors with minimum registered captal 12000 billion VND and disbursement period is under 5 years.

1.2.Preferential tax rate at 10% as follows:

Corporate income from sectors: Education and Planting, tending and protection of forests, cultivation, husbandry, aquaculture, agriculture, aquatic product processing in areas with difficult socio-economic conditions.

1.3.Preferential tax rate at 20% for 10 years as follows:

-Corporate income from new investment projects in special difficult socio-economic areas as regulated in decree 218/2013/ND-CP by the government.

-Corporate income from new investment projects in sectors: High standard steel producing, energy low consumption products, machines for agriculture or forest, foods for cattle and poultry, etc.

1.4.Preferential tax rate at 20% for whole life as follows:

Corporate income from new investment projects: Central People’s Credit Fund, Co-operative banks, financial organizations in difficult socio-economic areas as regulated in decree 218/2013/ND-CP.


#2 Tax exemption in Vietnam

2.1.Tax exemption for 4 years and 50% reduced tax for the next 9 years:

Corporate income from new investment projects for socialisation in area as regulated in decree 218/2013/ND-CP and circular 78/2014-BTC.

2.2.Tax exemption for 5 years and 50% reduced tax for the next 5 years:

Corporate income from new investment projects fo socialisation in area as regulated in decree 218/2013/ND-CP.

2.3.Tax exemption for 2 years and 50% reduced tax for the next 4 years:

Corporate income from new investment projects in industrial zones as regulated in article 19 of circular 78/2014-BTC.


#3 Other cases:

-Enterprises in sectors: Producing, construction,transport use 10 to 100 regular women as instructed in article 6, circular 78.

-Enterprise uses minor ethnic people.

-Enterprise uses technology transition for local enterprises in the difficult socio-economic areas. The reduced tax rate is 50%.


See more: 12 cases are exempt from tax in Vietnam.


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