CORPORATE INCOME TAX 2026: CALCULATION AND PAYMENT RATES

INTRODUCTION

Corporate Income Tax (CIT) is a direct tax calculated based on taxable income during the period and the tax rate. It is one of the most important sources of state budget revenue, and also a financial obligation that every business needs to understand to ensure compliance with legal regulations and optimize costs.

The year 2026 marks significant changes in CIT policy with the application of Law on Corporate Income Tax No. 67/2025/QH15 (effective from October 1, 2025) along with guiding documents such as Decree 320/2025/ND-CP and Circular 20/2026/TT-BTC. The article below will provide detailed and up-to-date guidance on calculating CIT for 2026.

TABLE OF CONTENTS

1. Corporate Income Tax Payers

2. How to Calculate Corporate Income Tax

3. How is Taxable Revenue Determined?

4. Deductible Expenses for Tax Calculation

5. Non-Deductible Expenses for Tax Calculation

6. Tax-Exempt Income

7. Other Income for Tax Calculation

8. Declaration, Payment, and Finalization Deadlines

1. CORPORATE INCOME TAX PAYERS

According to Article 2 of the Law on Corporate Income Tax 2008 (amended and supplemented 2013) and the latest regulations, CIT payers include:

a) Organizations engaged in production and business of goods and services with taxable income

• Enterprises established under Vietnamese law

• Foreign enterprises with or without permanent establishments in Vietnam

• Organizations established under the Law on Cooperatives

• Public non-business units established under Vietnamese law

• Other organizations engaged in production and business activities with income

b) Principles of tax payment for enterprises with taxable income

• Vietnamese enterprises: Pay tax on taxable income arising in Vietnam and taxable income arising outside Vietnam.

• Foreign enterprises with a permanent establishment in Vietnam: Pay tax on taxable income arising in Vietnam and income arising outside Vietnam related to the activities of that permanent establishment.

• Foreign enterprises without a permanent establishment in Vietnam: Pay tax on taxable income arising in Vietnam.

c) Permanent establishment of a foreign enterprise

A permanent establishment is a production or business facility through which a foreign enterprise conducts part or all of its activities in Vietnam, including:

• Branches, executive offices, factories, workshops, means of transport

• Oil fields, gas fields, natural resource exploitation sites

• Construction sites, construction, installation, assembly works

• Service provision facilities (including consulting services)

• Agents for foreign enterprises

• Authorized representatives to sign contracts or regularly deliver goods/provide services in Vietnam

2. HOW TO CALCULATE CORPORATE INCOME TAX

2.1. CIT Calculation Formula

According to Article 11 of the Law on Corporate Income Tax 2025, CIT is calculated according to the following formula:

CIT = Taxable income during the period × Tax rate

2.2. Steps to Determine Taxable Income

Step 1: Determine assessable income

Assessable income = Revenue – Deductible expenses + Other income

Step 2: Determine taxable income

Taxable income = Assessable income – Tax-exempt income + Carried forward losses

Step 3: Apply the tax rate to calculate the tax payable

CIT payable = Taxable income × Tax rate

2.3. CIT Rates for 2026

According to Law on Corporate Income Tax No. 67/2025/QH15, CIT rates are regulated according to the enterprise's revenue scale, applicable from the tax period of 2026:

Important Note: This is the biggest change compared to the old regulations, where the tax rate was divided by revenue scale instead of applying a single rate. The 20% tax rate remains the common rate applied to most enterprises, except for cases eligible for incentives as stipulated in Article 13 of the Law on Corporate Income Tax 2025.

In addition, some specific cases apply different tax rates:

• 25% – 50%: Oil and gas exploration and exploitation activities (depending on location, exploitation conditions, and reserve volume)

• 50%: Exploration and exploitation of rare natural resources (platinum, gold, silver, tin, tungsten, antimony, gemstones, rare earths...)

• 10% – 17%: Preferential tax rates applied to certain types of enterprises

3. HOW IS TAXABLE REVENUE DETERMINED?

Based on Article 8 of Decree 218/2013/ND-CP and current guiding documents:

3.1. Principles for Determining Revenue

• Taxable revenue is the total amount from sales, processing fees, service provision fees, including subsidies, surcharges, and additional charges that the enterprise receives, regardless of whether the money has been collected or not.

• For enterprises declaring and paying VAT using the credit method: CIT taxable revenue is revenue excluding VAT.

• For enterprises declaring and paying VAT using the direct method: CIT taxable revenue includes VAT.

3.2. Time of Revenue Determination

• Goods: The time of transfer of ownership or right to use the goods to the buyer.

• Services: The time of completion of service provision or the time of issuing the service invoice.

4. DEDUCTIBLE EXPENSES FOR TAX CALCULATION

According to current regulations, enterprises may deduct all expenses if they meet the following conditions:

4.1. Conditions for Deductible Expenses

1. Expenses actually incurred and related to the enterprise's production and business activities.

2. Having sufficient legal invoices and documents as prescribed by law.

3. For invoices for goods and services purchased in a single transaction with a value of 20 million VND or more (price including VAT), payment must be made by non-cash means.

4.2. Expanded Deductible Expenses under the New Law

According to the Law on Corporate Income Tax 2025, some new expenses are added to the list of deductible expenses, including:

• Personnel training and retraining costs

• Digital transformation costs

• Investment in technology research and development

• Innovative startup activities

5. NON-DEDUCTIBLE EXPENSES FOR TAX CALCULATION

Based on the provisions of Circular 78/2014/TT-BTC (amended and supplemented by Circular 96/2015/TT-BTC and new guiding documents), non-deductible expenses include:

• Expenses that do not meet the above conditions

• Depreciation of fixed assets not in accordance with regulations

• Expenses not related to production and business activities

• Expenses without legal invoices and documents

Note: The detailed list of non-deductible expenses (currently 37 items) needs to be carefully reviewed to avoid errors during tax finalization.

6. TAX-EXEMPT INCOME

According to the provisions of Article 8 of Circular 78/2014/TT-BTC (amended and supplemented) and new guiding documents, the following income items are exempt from CIT:

• Income from agriculture, forestry, fisheries, and salt production

• Income from providing technical services directly serving agriculture

• Income from securities transfer (in certain specific cases)

• Income from oil and gas exploration, prospecting, and exploitation activities (according to specific regulations)

• Other income as stipulated by law

Note: According to Decree 320/2025/ND-CP, there are currently 14 types of income exempt from CIT. Businesses need to carefully review to apply the regulations correctly.

7. OTHER INCOME WHEN CALCULATING TAX

According to Article 7 of Circular 78/2014/TT-BTC (as amended and supplemented), other income includes:

1. Income from capital transfer, securities transfer

2. Income from real estate transfer

3. Income from transfer of investment projects, project participation rights, mineral exploration and exploitation rights

4. Income from ownership rights, asset use rights, copyrights, intellectual property rights, technology transfer

5. Income from asset leasing in all forms

6. Income from asset transfer, liquidation (excluding real estate)

7. Income from deposit interest, loan interest, credit guarantee fees

8. Income from foreign currency trading activities

9. Income from exchange rate differences

10. Bad debts written

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    Frequently Asked Questions

    What should readers know about CORPORATE INCOME TAX 2026: CALCULATION AND PAYMENT RATES?

    This article provides detailed and up-to-date guidance on calculating Corporate Income Tax (CIT) for 2026, including taxpayers, calculation formulas, tax rates, revenue determination, deductible and non-deductible expenses, tax-exempt income, other income, and declaration and payment deadlines.

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