Vietnamese
Turnover directly affects the amount of enterprise income tax payable. So what exactly is turnover under the Law on Enterprise Income Tax?
The Law on Enterprise Income Tax No. 67/2025/QH15, which takes effect on October 1, 2025, and applies from the 2025 enterprise income tax period.
What is “turnover” under the Law on Enterprise Income Tax?
Article 8 of Law No. 67/2025/QH15 defines turnover for the purpose of calculating taxable income as all proceeds from sale of goods, subcontracting, and provision of services, including subsidies, surcharges, and extra charges that the enterprise is entitled to, regardless of whether payment has been received.
The Government is tasked with detailing this provision. However, as of now, no implementing regulation has been issued regarding turnover under the new Law on Enterprise Income Tax.
Article 8 of the Law on Enterprise Income Tax 2025 defines turnover as follows:
Turnover for determining taxable enterprise income means the total proceeds from the sale of goods, processing, and provision of services, including subsidies, surcharges, and additional charges to which the enterprise is entitled, regardless of whether the amounts have been collected or not.
The Government is assigned to detail this Article. However, as of the date of this publication, no specific guiding regulation on turnover under the Law on Enterprise Income Tax 2025 has been issued. We will provide updates as soon as the Government promulgates such guidance.
Method of calculating corporate income tax
Pursuant to Article 6 of the Law on Enterprise Income Tax 2025, corporate income tax shall be calculated according to the following formula:
Enterprise income tax = Taxable income in the tax period × Tax rate
In which, taxable income in the tax period shall be determined under Article 7 of the Law on Enterprise Income Tax 2025 as follows:
Taxable income = Turnover – Deductible expenses + Other incomes (including incomes derived outside Vietnam)
Notes:
If an enterprise engages in multiple production and business activities during the tax period, the taxable income from production and business activities shall be the total income from all such activities.
In case any production or business activity incurs a loss, the enterprise may offset such loss against taxable income from income-generating production and business activities at its own discretion (excluding income from real estate transfer, transfer of investment projects, and transfer of rights to participate in investment projects, which shall not be offset against incomes from production and business activities currently enjoying tax incentives).
The remaining income after offsetting shall be subject to the corporate income tax rate applicable to income-generating production and business activities.
Tax rates
Pursuant to Article 10 of the Law on Enterprise Income Tax 2025, enterprise income tax rates applicable from the 2025 tax period are as follows:
No. | Tax rate | entities eligible for preferential tax rates |
1 | 20% | Applicable to most enterprises, except the cases specified in Clauses 2, 3, and 4 of Article 10 and entities eligible for preferential tax rates. |
2 | 15% | Applicable to enterprises with total annual turnover not exceeding VND 3 billion. |
3 | 17% | Applicable to enterprises with total annual turnover of more than VND 3 billion but not exceeding VND 50 billion. |
4 | 25% – 50% | Applicable to activities of prospecting, exploring, and exploiting oil and gas. |
5 | 50% | Applicable to activities of exploring and exploiting precious and rare natural resources (including platinum, gold, silver, tin, tungsten, antimony, gemstones, rare earths, and other precious and rare resources as prescribed by law). |
6 | 40% | Applicable in cases where 70% or more of the licensed mining area is located in areas with extremely difficult socio-economic conditions. |
