Latest Corporate Income Tax Calculation Method 2025
Corporate income tax (CIT) is a significant financial obligation for every business operating in Vietnam.
The article below will provide detailed guidance on how to calculate corporate income tax, helping businesses optimize costs and comply with legal regulations.
1. How to Calculate Corporate Income Tax
According to Article 6 of the 2008 Corporate Income Tax Law and Article 5 of Decree 218/2013/NĐ-CP, CIT is calculated as follows:
CIT = Taxable income in the period x Tax rate
Thus, to calculate the payable tax, enterprises must determine the taxable income and and the applicable tax rate.
(1) Taxable Income
Taxable income = Taxable revenue – Tax-exempt income + Losses carried forward as regulated
Taxable corporate income is determined as follows:
Taxable revenue = Revenue - Deductible expenses + Other income
(2) Corporate Income Tax Rate
According to the 2025 Corporate Income Tax Law, the applicable tax rate for most enterprises is 20%.
In addition, preferential tax rates of 15% and 17% are introduced for small and medium-sized enterprises.
See details here: Corporate Income Tax (CIT) Rates in 2025
1.1. Steps for Calculating Corporate Income Tax
Step 1:Determine revenue during the taxable period, deductible expenses, and other income.
Step 2:Calculate taxable income
Step 3:Determine tax-exempt income and carry-forward losses in accordance with regulations.
Step 4:Calculate corporate taxable income
Step 5:Calculate the payable Corporate Income Tax
1.2. Quarterly Calculation of Corporate Income Tax (Provisional Declaration)
Mastering the quarterly calculation of corporate income tax based on business performance enables enterprises to optimize profits and comply with tax obligations.
Regulations on Quarterly Provisional Corporate Income Tax Calculation
- Enterprises must self-assess the provisional quarterly corporate income tax payable; this amount will be offset against the annual tax settlement.
- The determination of provisional quarterly tax payments is based on business performance and applicable tax regulations.
Deadline for payment of provisional quarterly Corporate Income Tax
For provisional quarterly corporate income tax payments, the latest deadline is the 30th day of the first month of the following quarter.
Each quarter, enterprises must calculate the provisional corporate income tax based on their business performance, with the payment deadline being the 30th day of the first month of the following quarter.
2. Deductible and Non-Deductible Expenses for Corporate Income Tax Calculation
2.1. Deductible Expenses for Corporate Income Tax Calculation
According to Article 4 Circular No. 96/2015/TT-BTC
- Actual expenses incurred in connection with the enterprise’s production and business activities.
- Expenses supported by valid invoices and lawful documents.
- Non-cash payment is required for invoices of VND 20 million or more (including VAT).
2.2. Non-Deductible Expenses for Corporate Income Tax Calculation
Clause 2, Article 6 Circular No. 78/2014/TT-BTC stipulates:
- Expenses that do not meet the prescribed conditions for deductible costs.
- Depreciation of fixed assets not in accordance with regulations.
- Expenses not related to revenue or exceeding statutory limits.
Conclusion
To optimize tax obligations and comply with the 2025 Corporate Income Tax Law, staying updated with regulations is essential for businesses.
Need accounting solutions or expert tax consulting? Vina TPT accompanies you confidently through all changes.
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