Many businesses to benefit from tax incentives under the amended Law on Corporate Income Tax 2025

The amended Law on Corporate Income Tax (“the amended CIT Law”), passed by the National Assembly on 14 June 2025 and taking effect from 1 October 2025, is expected to usher in a new wave of tax incentives with broader scope, greater depth and closer alignment with modern development trends. Instead of focusing solely on capital scale or geographic location as before, the amended CIT Law redefines the concept of tax incentives: incentives must be linked to technology, innovation, environmental efficiency and substantial contribution to the economy. With these significant changes approaching, businesses need to proactively review their operational models and investment strategies to avoid missing opportunities from the new generation of tax incentive policies.

1.Key tax incentives under the amended CIT Law

• Tax incentives will focus strongly on high-tech industries

For the first time, certain high-tech industries such as software product development, network security, chip manufacturing, integrated circuits, embedded software and smart sensors have been designated as industries eligible for preferential tax rates and significant tax exemptions. This represents a clear policy shift: incentives are no longer limited to “traditional manufacturing” but now extend to modern service and technology sectors. Previously, although some technology industries were encouraged in terms of investment orientation, they were not clearly established by tax law as beneficiaries of incentives. This led many technology companies to face difficulties in obtaining confirmation, resulting in missed opportunities or being subject to standard tax rates. This codification provides technology companies with a clear legal basis, allowing them to confidently make long-term investments and expand operations.

Businesses operating in industries eligible for corporate income tax incentives under Clause 2, Article 12 of the amended CIT Law need to proactively review their business registration sectors, implement accounting systems, invoices, documents and pay taxes according to declarations. Additionally, businesses need to prepare documentation proving the high-tech, innovative or environmentally friendly nature of their business activities, such as technical documents, patents and technology certificates to provide sufficient basis for applying tax incentives.

• Opportunities for businesses investing in “green” industries

The amended CIT Law also offers significant incentives for businesses operating in sustainable development fields such as renewable energy, waste treatment, recycling, energy-efficient equipment manufacturing, green logistics and electric transportation.

Unlike previous policies that only incentivized large businesses, the amended CIT Law stipulates that small-scale businesses investing in the right strategic sectors can still benefit from incentives, provided they meet the criteria for technology and environmental contribution.

Businesses in these sectors should note:

• New investment projects in renewable energy, recycling and waste treatment need to clearly register their environmental and technological objectives to be considered for incentives;
• Investments in energy-saving equipment, electric transport and smart logistics systems can be counted toward incentive criteria if operational efficiency is demonstrated.

• Incentives for the press sector

A notable innovation in the amended CIT Law is the redefinition and expansion of tax incentives for the press sector, which plays an important role in guiding public opinion, media, policy and cultural preservation. According to Article 12 of the amended CIT Law, press (including advertising activities in newspapers) has been included in the list of industries eligible for tax incentives. Accordingly, income of press agencies from print media activities, including advertising in print media, will be subject to a corporate income tax rate of 10% throughout their operation period; for other press activities, a preferential tax rate of 15% shall apply.

Before the amended law, only income from print media and advertising in print media enjoyed the 10% tax rate, while other press activities including electronic or multimedia press were typically subject to the standard tax rate of 20%. The standardization of a 15% tax rate across all remaining press activities in the amended CIT Law represents a significant shift in tax policy, aiming to create conditions for press agencies to develop sustainably and adapt to the digital transformation model, while ensuring they maintain the political and social functions of the press in the market economy.

• Incentives are no longer a “privilege” of location

Previously, tax policies often prioritized specific regions such as remote areas, economic zones and high-tech zones. However, with the amended CIT Law, tax incentives are strategic in nature, meaning that in any locality, if businesses invest in industries eligible for incentives, industries applying advanced technologies and generating high socio-economic efficiency, they can all benefit from the best policies.

This opens up equal opportunities for businesses in major urban areas, where high-tech forces and innovation hubs are concentrated, which previously found it difficult to access incentives because they were not located in geographically encouraged zones.

2.Tax incentive rates and tax incentive periods

According to the amended CIT Law, preferential tax rates are applied to income of businesses from implementing investment projects in industries and areas eligible for tax incentives. Specifically, businesses implementing new investment projects in specially incentivized sectors such as microchip production, semiconductor chips, renewable energy, environmental technology, etc., may enjoy a tax rate of 10% for a period of 15 years, along with a tax exemption for 4 years and a 50% tax reduction for the following 9 years. For other incentivized industries or investments in areas with difficult development conditions, the preferential tax rates are also clearly specified in Article 13 of this Law.

A notable new feature in the amended CIT Law is the introduction for the first time of a fixed preferential tax rate of 17% that applies long-term, intended for businesses conducting production and business activities in incentivized industries but not belonging to the specially incentivized group or those investing in encouraged areas. Previously, the 17% rate only appeared in some implementing decree guidelines, was temporary in nature and limited in scope; now, the 17% rate has been codified and expanded, creating an additional clear intermediate incentive tier between the standard 20% rate and the deep preferential rates of 10%–15%. This helps diversify tax policies, increases stratification and better aligns with practical realities.

Businesses need to proactively determine their industry position within the incentive classification system, assess their ability to meet the revenue ratio conditions from incentivized activities and prepare complete legal and technical documentation to correctly apply the appropriate tax rates and incentive periods according to the new regulations.

3.Strategic next steps for businesses

The amended CIT Law has just been passed by the National Assembly on June 14, 2025 and will take effect from October 1, 2025, therefore, to take full advantage of the new policy, businesses should not wait but need to act early, specifically:

• Review business sectors, tax registration industry codes to update them in line with incentive directions;
• Reassess revenue models, identify which portions belong to incentivized activities to separate and substantiate them.
• Develop new investment or expansion plans, clearly positioning themselves in high-tech fields, innovation or green development…;
• Consult with legal and tax experts to develop strategies, prepare clear incentive documentation and prevent legal and financial risks.

Thus, the amended Corporate Income Tax Law not only expands the number of industries eligible for incentives but also reflects a new philosophy in tax policy: incentives must target the right entities, right industries and right impacts. Businesses that invest and create long-term value for society will receive proportionate tax policy incentives. Conversely, businesses that fail to operate and declare taxes transparently will face inspections, tax recovery and administrative and criminal liability sanctions. Therefore, the 2025-2026 period is a crucial time for businesses to proactively restructure their operations, shape appropriate investment strategies and prepare legal and tax documentation to be ready for the new phase of tax incentive policies.

Sincerely,