Tax benefits for enterprises in Vietnam.
Tax Benefits for Enterprises in Vietnam
Vietnam offers tax incentives to investors implementing investment projects that meet the criteria established by the Law on Investment 2020 and the Law on Corporate Income Tax 2025.
Eligibility for tax incentives depends on a number of factors, including the project's business sector, location, investment capital, and compliance with the statutory requirements established under Vietnamese law.
In this article, we explain which investment projects may qualify for tax incentives in Vietnam, under what circumstances such incentives are granted, and how to assess the eligibility of your project during the business planning stage.
Tax Incentives Available for Businesses in Vietnam
Depending on the category of the investment project, Vietnamese legislation provides several types of tax incentives. In many cases, investors may benefit from more than one incentive simultaneously.
The main tax incentives include:
1. Preferential Corporate Income Tax (CIT) Rates
Instead of the standard 20% Corporate Income Tax (CIT) rate, eligible investment projects may qualify for preferential tax rates of 10%, 15%, or 17% for a period specified by Vietnamese legislation.
2. Tax Holidays
Priority investment projects may qualify for a full exemption from Corporate Income Tax for up to four years, starting from the first year in which the project generates taxable income.
In addition, newly established small and medium-sized enterprises (SMEs) incorporated after May 2025 may also be eligible for tax holidays, provided they successfully complete the required compliance procedures and obtain official SME status.
3. Reduced Corporate Income Tax Following the Tax Holiday
After the tax holiday expires, eligible investors may continue to benefit from a 50% reduction of the Corporate Income Tax payable for the period prescribed by law.
4. Import Duty Exemptions
Investment projects in certain priority sectors may qualify for exemptions from import duties on machinery, equipment, production lines, as well as specific raw materials and components that are not manufactured in Vietnam.
5. Land Rental Incentives
Depending on the nature and location of the investment project, investors may be entitled to a full or partial exemption from land rental payments for land leased by the State for project implementation.
Tax incentives are not granted simply because a company is incorporated. They are available only to investment projects that meet the eligibility criteria established under Vietnamese law.
Who Is Eligible for Tax Incentives in Vietnam?
When assessing an investment project, the competent authorities consider several key factors:
1. Business Sector
The most significant tax incentives are generally available to projects operating in priority sectors of the economy, including:
- software development and information technology;
- research and development (R&D);
- high-tech manufacturing;
- education and vocational training;
- healthcare;
- environmental protection and waste treatment;
- renewable energy production;
- construction and operation of infrastructure projects;
- selected agricultural projects and agricultural processing.
2. Project Location
Investment projects implemented in areas with difficult or especially difficult socio-economic conditions may qualify for additional tax incentives. For example, projects located in Lao Cai Province may be eligible for preferential treatment. The list of eligible locations is established and periodically updated by the Government of Vietnam.
3. Scale of the Investment Project
Additional tax incentives are available for large-scale investment projects that satisfy the statutory requirements regarding investment capital (generally from VND 6 trillion, subject to additional qualifying conditions), economic impact, level of applied technology, and job creation.
4. Investment Project Status
Additional tax incentives may also be available for projects located in designated investment zones, including Hoa Lac Hi-Tech Park, Saigon Hi-Tech Park, Da Nang Hi-Tech Park, as well as economic zones such as Chu Lai, Dung Quat, Van Don, and other areas that benefit from special investment incentive regimes under Vietnamese law.
It should be noted that eligibility for tax incentives is determined based on the overall characteristics of the investment project. Even if a company operates in a priority sector, this does not automatically entitle it to tax incentives. Likewise, implementing a project in a preferential region does not, by itself, guarantee tax benefits unless all applicable legal requirements are satisfied.
Types of Businesses Most Likely to Qualify for Tax Incentives
In practice, eligibility for tax incentives largely depends on the company's business activities. Below are the most common categories of businesses that may qualify for government tax incentives, provided they meet the requirements of Vietnam's investment legislation.
Research and Innovation
Preferential tax treatment is available for projects involving research and development (R&D), the development of new technologies, biotechnology, advanced materials, renewable energy, and other innovative industries included in the Government's list of priority sectors.
Education and Healthcare
Private educational institutions, vocational training centers, healthcare providers, and certain socially beneficial projects may also qualify for tax incentives, subject to compliance with the applicable legal requirements.
Environmental Protection Projects
This category includes projects related to waste treatment and recycling, wastewater treatment, the manufacture of environmental protection equipment, renewable energy, and other activities aimed at reducing environmental impact.
Infrastructure Projects
Investment in transport, engineering, and public utility infrastructure, as well as projects implemented in high-tech parks, economic zones, and certain industrial parks, may qualify for substantial tax incentives.
It should be noted that operating within one of the above sectors does not automatically entitle a company to tax incentives. When assessing an investment project, the competent authorities consider not only the business activity, but also the project location, investment scale, level of technology applied, and other statutory eligibility criteria.
Types of Businesses That Generally Do Not Qualify for Tax Incentives
The mere incorporation of a foreign-invested company in Vietnam does not entitle it to tax incentives.
In most cases, tax incentives are not available for the following types of businesses:
- trading companies (wholesale and retail);
- import and export businesses that do not carry out manufacturing activities;
- consulting, legal, accounting, and marketing services;
- travel agencies and tour operators;
- restaurants, cafés, and other food and beverage businesses;
- hotels and serviced apartments;
- agency and intermediary services;
- advertising agencies and most service-based businesses.
There are, however, exceptions to this general rule. For example, a hotel or tourism project may qualify for tax incentives if it is implemented in an area with difficult or especially difficult socio-economic conditions or if the project satisfies other statutory investment incentive criteria.
Therefore, when assessing eligibility for tax incentives, it is important to consider not only the company's primary business activity but also the overall characteristics of the investment project.
How to Obtain Tax Incentives in Vietnam
Tax incentives are not granted through a separate permit or license. Eligibility is determined during the investment project planning stage and depends on whether the project meets the requirements of Vietnamese legislation.
In most cases, the process is as follows:
1. Investment Project Planning
During the planning stage, the investor defines the proposed business activities, project location, investment capital, and other key parameters that may affect eligibility for tax incentives.
2. Investment Project Registration
If the project requires an Investment Registration Certificate (IRC), the competent authority reviews the project as part of the IRC application process. It is at this stage that the project's eligibility for investment incentives is assessed in accordance with the Law on Investment.
3. Company Incorporation
Once the required investment approvals have been obtained, the legal entity is incorporated, and the implementation of the investment project begins.
4. Application of Tax Incentives
If the investment project satisfies the statutory requirements, the company may apply the relevant tax incentives when calculating and declaring its tax liabilities. In the event of a tax audit, the company must be able to demonstrate that it continues to meet the legal conditions for applying those incentives.
It is important to note that eligibility for tax incentives depends not only on the initial approval of the investment project but also on the company's continued compliance with the conditions under which the incentives were granted. Changes to the project's business activities, investment structure, or other material aspects may affect the company's entitlement to continue applying the relevant tax incentives.
Nine Points Consulting supports investors throughout every stage of establishing a business in Vietnam, including a preliminary assessment of eligibility for available tax incentives. For newly established companies, we also assist with the compliance procedures required to obtain Small and Medium-sized Enterprise (SME) status. Subject to meeting the applicable legal requirements, this status may enable eligible businesses to benefit from the tax holiday currently available to qualifying SMEs through the end of 2027.
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