2020 12 October

Vietnam: Corporate Income Tax Reduced by 30% for 2020


On 25 September 2020, the Government of Vietnam issued Decree 114/2020/ND-CP (“Decree 114”) that provides guidance on the implementation of a 30% reduction of Corporate Income Tax (“CIT”).

Decree 114 took effect on 3rd August 2020 and applies to the tax year 2020.

Some of the key points of Decree 114 include:

  • A 30% reduction of CIT payable for tax year 2020 is provided to companies with a total revenue not exceeding VND 200 billion (approximately USD 8.58 million);
  • Total revenue includes all sales, processing fees, service fees including price subsidies, surcharges and other income such as income from capital transfers, transfers of real estate, etc.;
  • The tax year 2020 refers to the calendar year or fiscal year. The decree provides specific guidance for determining the total revenue and the CIT payable in cases where a tax year runs for more or less than 12 months;
  • The 30% reduction applies to the CIT payable after taking into account all tax incentive entitlements;
  • Eligible enterprises may apply the 30% reduction to the payments of the quarterly provisional CIT if it is expected that the total revenue will not exceed the VND 200 billion threshold for the tax year 2020;
  • A prescribed template is provided for the declaration of the reduced CIT payable;
  • Additional CIT payable resulting from CIT return amendments or tax audits are also entitled to the 30% reduction; and
  • Late payment interest and administrative penalties will be applied if the tax authorities determine during a tax audit that the enterprise was ineligible for the reduction.

We trust that this is helpful. Please let us know if you have any questions or would like to discuss the above or any other tax issues in Vietnam.

The information provided here is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.


Jack Sheehan

Partner & Head of the Regional Tax Practice 


Lan Hua

Tax Director, Vietnam


Phan Thi Lieu

Phan Thi Lieu

Senior Tax Manager, Vietnam


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