Types of Income Exempt from Corporate Income Tax in 2025

The Law on Corporate Income Tax 2025 clearly defines multiple types of income that are exempt from taxation, demonstrating the State’s orientation toward supporting essential industries, promoting the application of science and technology, and ensuring social welfare. This presents a crucial opportunity for enterprises to optimize their tax obligations while reinvesting in key sectors of the economy.

1. Law on Corporate Income Tax 2025: Which types of income are exempt from corporate tax?

The Law on Corporate Income Tax 2025 was passed by the National Assembly on June 14, 2025, and takes effect from October 1, 2025.

Article 4 of the Law specifies the following categories of income that are exempt from Corporate Income Tax (CIT):

1.1. Income of cooperatives and enterprises in agriculture, forestry, fishery, and salt production

• Income of cooperatives and unions of cooperatives operating in agriculture, forestry, fishery, or salt production located in areas with difficult or especially difficult socio-economic conditions.

• Income from offshore fishing; from cultivating crops, planted forests, livestock raising, aquaculture, and processing agricultural and aquatic products (including purchasing raw products for processing) in especially difficult areas.

• Income of cooperatives from salt production.

Types of Income Exempt from Corporate Income Tax in 2025

1.2. Agricultural service activities

• Income from providing technical services directly serving agricultural production.

1.3. Enterprises employing special groups

• Enterprises whose average workforce during the year consists of at least 30% being persons with disabilities, rehabilitated drug users, or HIV/AIDS-infected persons, and having at least 20 total employees. (Not applicable to enterprises in finance or real estate businesses.)

1.4. Activities in science, technology, and innovation

• Income from contracts involving scientific research, technological development, and digital transformation.

• Income from selling newly applied technological products in Vietnam.

• Income from selling products during the trial production phase (including controlled testing). (Exemption granted for a maximum of 3 years.)

1.5. Specialized education and training activities

• Income from vocational education and training exclusively for ethnic minorities, persons with disabilities, children with special circumstances, and social protection beneficiaries.

1.6. Domestic capital contributions, shareholding, joint ventures, and partnerships

• Distributed income derived from capital contributions, share purchases, or joint ventures/partnerships with domestic enterprises, after CIT has been duly paid.

1.7. Certain other special types of income

• Gains from asset revaluation during equitization or restructuring of wholly state-owned enterprises.

• Donations used for the intended purposes in education, arts, humanitarian efforts, scientific research, or digital transformation. (Misuse is subject to clawback and penalties.)

• Income from the transfer of emission reduction certificates, carbon credits, and green bond interest.

1.8. Income from assignments mandated by the State

• Vietnam Development Bank: income from investment and export credit.

• Vietnam Bank for Social Policies: income from lending to the poor and policy beneficiaries.

• Asset Management Company (AMC) of Vietnamese credit institutions: income from debt handling.

• Income generated by non-profit public financial funds as regulated by the Government.

1.9. Transfer of prioritized technologies

• Income from transferring prioritized technologies to organizations/individuals in especially difficult socio-economic areas.

1.10. Socialized institutions

• Undistributed income reinvested into education, healthcare, or other socialized sectors, or into a legally compliant non-divided common fund of a cooperative.

1.11. Public non-business units

• Income from basic and essential public services subsidized by the State or implemented in especially difficult areas.

2. How to calculate CIT-liable income from October 1, 2025?

According to Article 7 of the Law on Corporate Income Tax 2025:

Formula:Taxable income = Assessable income – (Exempted income + Losses carried forward)

Where:Assessable income = Revenue – Deductible expenses + Other income (including foreign-sourced income)

Special notes:

• For enterprises with multiple business activities, taxable income is calculated as the total from all activities, allowing internal offsetting of losses—except for certain special cases such as real estate transfers or investment projects under tax incentives.

• Income from the transfer of mineral exploration and exploitation rights must be calculated separately and is not eligible for offsetting with losses from other activities.

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