Vietnam's standard Corporate Income Tax (CIT) rate is 20% of net taxable profit. Oil & gas and rare-resource extraction activities are taxed higher (32-50% depending on the field). Preferential rates of 10%, 15% or 17% for a limited number of years (plus tax holidays) are available for investments in encouraged sectors, high-tech, disadvantaged locations, and certain SME/startup categories, administered through investment registration certificates.
Vietnam actively courts foreign investment with tax incentives, but they are not automatic — they must be applied for and locked in through the Investment Registration Certificate (IRC) process, and reduced rates are usually paired with strict conditions (minimum capital, location, sector) that can be clawed back if breached.
Key Facts
Standard CIT rate: 20% of net taxable profit for most resident companies and foreign-invested enterprises.
Preferential rates of 10% (for 15 years) or 17% (for 10 years) apply to qualifying projects in encouraged sectors (high-tech, R&D, environmental protection, education, healthcare) or disadvantaged/extremely disadvantaged locations, often combined with a tax holiday (e.g., 4 years exemption + 9 years at 50% of the applicable rate).
Oil, gas, and other natural resource extraction: 32-50% depending on the specific project and resource.
Foreign contractor tax (FCT) applies to foreign entities doing business in Vietnam without establishing a local legal entity — typically a blended CIT + VAT withholding on gross payments.
Tax year is the calendar year by default, though companies may apply to use a different 12-month fiscal year with GDT approval.
CIT is paid quarterly on a provisional basis, with final reconciliation and settlement due 90 days after fiscal year-end.
Steps
Confirm your CIT rate and any incentives — Check whether your business sector, location, or investment size qualifies for preferential CIT rates or a tax holiday under the Investment Law and Decree 218/2013 (as amended). Incentives are usually confirmed at the Investment Registration Certificate stage.
Register for tax and obtain a tax code — Once the Enterprise Registration Certificate is issued, the company's tax code (same as the enterprise ID number) becomes active with the tax authority, and you must register e-invoicing and a company tax accounting method.
File quarterly provisional CIT — Estimate and pay CIT quarterly based on projected annual profit; underpayment beyond a threshold versus the final liability can trigger late-payment interest.
Annual CIT finalization — File the annual CIT finalization return within 90 days of fiscal year-end, reconciling actual taxable profit, applying any incentive rates, and settling any balance due or claiming overpayment.
Maintain transfer pricing documentation — Companies with related-party transactions above statutory thresholds must prepare contemporaneous transfer pricing documentation and file Form 01 with the CIT return.
Costs
Standard CIT rate: 20% of net taxable profit
Preferential rate (encouraged sectors/locations): 10% or 17%, for 10-15 years, often with an initial tax holiday
Oil & gas / resource extraction CIT: 32%-50%
Late CIT payment interest: 0.03%/day on the outstanding amount
Timelines
Quarterly provisional CIT payment: Due by the 30th day of the month following each quarter
Annual CIT finalization deadline: Within 90 days of fiscal year-end
Tax incentive approval (as part of IRC): Typically 15-35 working days as part of the investment registration process
Required Documents
Enterprise Registration Certificate and tax code
Investment Registration Certificate (for foreign-invested projects, especially those claiming incentives)
Audited annual financial statements
Quarterly and annual CIT return forms
Transfer pricing documentation (if related-party transactions exceed thresholds)
Common Mistakes
Assuming a preferential CIT rate applies automatically without formally qualifying and documenting the incentive at the IRC stage.
Under-paying quarterly provisional CIT by more than the statutory tolerance (historically 20%) versus final liability, which triggers retroactive late-payment interest.
Overlooking foreign contractor tax (FCT) obligations when paying an overseas parent or affiliate for services, software licenses, or royalties.
Missing transfer pricing documentation deadlines for related-party transactions, a frequent target of GDT audits on foreign-invested enterprises.