From January 01, 10, Law on Corporate Income Tax (CIT) 2025 No. 67/2025/QH15 officially in effectThis replaces and consolidates many previous regulations. One of the important points that business owners and accountants need to understand is: Article 4 – Tax-Exempt IncomeUnderstanding and correctly applying this regulation will not only help businesses optimize tax costs but also ensure compliance with the law.
I. Income from agricultural, forestry, fisheries, and salt production activities
According to the Article 4 Corporate Income Tax Law 2025The following income is exempt from corporate income tax:
- Clause 1:
- Income from operations fishing;
- Income of enterprises from the production of agricultural products, planted forests, livestock, aquaculture, and processing of agricultural and aquatic products (including cases where agricultural and aquatic products are purchased for processing). in areas with particularly difficult socio-economic conditions;
- Income of cooperatives and cooperative unions from the production of crops, planted forests, livestock, aquaculture, processing of agricultural and aquatic products (including cases of purchasing agricultural and aquatic products for processing), and salt production.
- Clause 2: Income of cooperatives and cooperative unions operating in the fields of agriculture, forestry, fisheries, and salt production in areas with difficult socio-economic conditions or areas with particularly difficult socio-economic conditions.
At first glance, the regulations for cooperatives and cooperative unions in Clauses 1 and 2 seem similar. However, in essence, these two regulations differ in the following points:
- Clause 1: Based on specific production activities:
- Tax exemption for cooperatives/cooperative unions for specific activities listed;
- No geographical restrictions on operations.
- Clause 2: Based on the field and geographical area of operation:
- Tax exemption applies to cooperatives/cooperative unions operating in the fields of agriculture, forestry, fisheries, and salt production in general;
- Right meeting the operating area requirements in disadvantaged or particularly disadvantaged areas.
According to the Circular 96 / 2015 / TT-BTCIncome from products and goods processed from agricultural and aquatic products that are eligible for tax incentives must simultaneously meet the following conditions:
- The ratio of the value of agricultural and aquatic raw materials to the cost of producing goods and products (production cost of goods and products) is 30% or more;
- Products and goods derived from the processing of agricultural and aquatic products are not subject to excise tax, except in cases decided by the Prime Minister based on a proposal from the Ministry of Finance.
II. Income from technical services directly serving agriculture
Clause 3 Article 4 Regulations stipulate tax exemption for income from technical services directly serving agriculture.
The law does not provide specific guidance on the services referred to in this Clause. However, according to Circular 78 / 2014 / TT-BTCServices may include:
- Irrigation, plowing, and dredging of irrigation canals in the fields;
- Pest and disease control for crops and livestock;
- Harvesting agricultural products.
III. Income from scientific research, development and technology transfer, innovation and digital transformation
According to the Clause 4 Article 4Businesses are exempt from corporate income tax on the following income during the period max 03 years:
- Contracts for scientific research, technological development, innovation, and digital transformation;
- Selling products made using new technologies that are being applied in Vietnam for the first time.
- Selling test products during the trial production phase.
According to the Article 3 of Circular 151/2014/TT-BTCIncome exempt from tax under this Clause must meet the following conditions:
- Having a certificate of registration for scientific research activities (for revenue from contract execution);
- Certified by the competent state agency for science and technology.
💡 A new feature compared to previous regulations is the expanded scope of application to include more types of contracts. innovation and digital transformationand simultaneously standardize the tax-free period applicable to income from products made using new technologies applied for the first time. 03 years instead of 05 years as before.
Also, at Clause 13 Article 4Income from technology transfer in priority areas to organizations and individuals in areas with particularly difficult socio-economic conditions is also considered exempt from corporate income tax.
IV. Income from the use of specialized labor
Clause 5 Article 4 Regulation: Corporate income tax exemption applies to income from the production and business activities of goods and services by enterprises that meet the following conditions:
- On average, 30% or more of the workforce during the year consists of people with disabilities, people recovering from drug addiction, or people infected with HIV/AIDS;
- There is an average number of employees per year of 20 or more.
⚠️ Note: This does not apply to businesses operating in the finance or real estate sectors.
According to the instructions at Circular 78 / 2014 / TT-BTCBusinesses whose income is exempt from tax under this Clause must meet the following conditions:
- When employing people with disabilities (including war invalids and sick soldiers), confirmation from a competent health authority is required regarding the number of people with disabilities employed.
- When employing individuals who have completed drug rehabilitation, they must possess a certificate of completion of rehabilitation from a rehabilitation facility or confirmation from a relevant competent authority;
- When employing people infected with HIV, confirmation from a competent health authority is required regarding the number of HIV-infected employees.
V. Income from vocational training and education activities for specific target groups
According to the Clause 6 Article 4Businesses are exempt from tax on income from vocational training activities specifically for:
- Ethnic minorities;
- Người khuyết tật;
- Children in special circumstances;
- Subjects of social vices.
At Clause 5 Article 4 Decree 218/2013/ND-CPIn cases where a vocational training institution includes other categories of trainees, the tax-exempt portion of income is determined by the ratio between the number of trainees belonging to the aforementioned categories and the total number of trainees at the institution.
Income from vocational training activities is tax-exempt if it meets the following conditions:
- Vocational training institutions are established and operate in accordance with the regulations and guidelines on vocational training.
- The list includes trainees from ethnic minorities, people with disabilities, children from disadvantaged backgrounds, and those involved in social vices.
VI. Income from capital contributions, share purchases, joint ventures, and partnerships within the country.
According to the Clause 7 Article 4:
- Income distributed to investors from capital contributions, share purchases, joint ventures, and partnerships with domestic enterprises – after those enterprises have paid corporate income tax as prescribed – will be exempt from corporate income tax on the investor's side;
- This applies to cases where businesses receive capital contributions, issue shares, or are joint ventures or affiliated companies that are already enjoying corporate income tax incentives.
💡 This rule helps to avoid the situation of double taxation on the same domestic profit. and encourage capital contributions and linkages within the economy.
VII. Income from grants, support, and compensation
According to the Clause 8 Article 4 Tax exemption applies to the following items:
- Funding is received for educational, cultural, artistic, charitable, humanitarian, and other social activities in Vietnam;
- Funding received from non-affiliated businesses (domestic or foreign) for scientific research, technological development and innovation, and digital transformation activities;
- Direct support from the state budget, from the Investment Support Fund established by the Government;
- State compensation as prescribed by law.
⚠️ Note: If a business misuses the grants stipulated in this Clause, it will be subject to tax recovery and penalties in accordance with the law.
VIII. Income from the transfer of Certified Emission Reduction (CERs) certificates
Certified Emission Reductions (CERs) are certifications issued by the Executive Board of the Clean Development Mechanism (CDM) to CDM projects. CERs are a special type of commodity that can be traded and sold between countries or businesses that need them.
According to the Clause 10 Article 4Income from the transfer of CERs, carbon credits, and the first issuance of green bonds by businesses that have been granted these credits is exempt from corporate income tax. Subsequent transfers will be subject to tax according to regulations.
IX. Undistributed Income
According to the Clause 12 Article 4Corporate income tax exemption applies to the undistributed income of socialized enterprises in the fields of education and training, healthcare, and other socialized sectors. This tax exemption only applies to undistributed income if:
- Use it to reinvest and develop that business;
- Meet the minimum ratio stipulated by the Government.
⚠️ Note:
In cases where the retained income is distributed or misused by the enterprise, or invested in expanding other business activities not within the aforementioned areas, the enterprise will be subject to retroactive collection of corporate income tax at the tax rate in effect at the time of distribution or misuse, and will be penalized for violations of tax laws as prescribed.
X. Income of public service units from providing public services.
According to the Clause 14 Article 4, exempt from corporate income tax the income of public non-business units from providing public services including:
- Basic and essential public service activities are included in the list of public service activities using state budget funds as issued by competent authorities;
- Public service activities that the State must support and ensure funding for because the service provision costs are not fully included in the service price;
- Public service in areas with particularly difficult socio-economic conditions.
The Corporate Income Tax Law 2025 No. 67/2025/QH15 clearly stipulates tax-exempt income, creating a "preferential framework" with clear application criteria. To effectively utilize and maximize these incentives, businesses need to pay attention to accounting for income, maintaining complete and systematic records, invoices, and documents for tax declaration and payment. This is a forward-thinking approach. "Understand correctly - Do correctly" It provides a solid foundation that helps businesses optimize operating costs, mitigate legal risks, and protect their legitimate rights.