Corporation Income Tax In Vietnam
Corporate income tax (CIT) is a tax levied on the profits of companies and 20% is the CIT rate in Vietnam. This rate in Vietnam is higher than in Singapore (approximately 17%).
CIT is imposed at the national level, and there is no local or provincial tax. The company will pay CIT in the district tax department where the headquarters or branches are registered.
The CIT is the same for both domestic and foreign–invested companies and it is paid based on the money earned by enterprises (gross revenue minus expenses). After deducting all expenses for business activities or production, CIT will be calculated on the profit.
For the tax incentive, enterprises that are established in specific sectors or areas, in high-tech zones or economic zones, can exempt from the tax for several years with a lower rate; for example, the enterprise in the energy-saving area can receive the incentive tax: CIT exemption for up to 2 years and CIT rate of 17% for ten years.
An enterprise that conducts multiple business activities that are subject to different tax rates will calculate the income for each activity separately. And all income arising in Vietnam will be subject to CIT, including the profit from the foreign enterprise.
In addition to incentives, the companies can be reduced the tax if they hire numerous female staff or ethnic minorities.