Who is subject to corporate income tax in Vietnam?

In Vietnam, the Corporate Income Tax (CIT) applies to both domestic and foreign entities that conduct business or earn income within the country. The tax liability depends on the residency status of the enterprise and the source of the income. Entities subject to CIT in Vietnam include:

1. Resident Enterprises

These include Vietnamese companies and foreign-invested enterprises (FIEs) that are established under Vietnamese law.

• Subject to CIT on their worldwide income.
• Examples include limited liability companies, joint-stock companies, and enterprises with investment licenses in Vietnam.

2. Non-Resident Enterprises

These are foreign companies that are not incorporated in Vietnam but are earning income from Vietnam.

• Subject to CIT only on income sourced within Vietnam.
• Typically taxed under the Foreign Contractor Tax (FCT) regime, which includes both CIT and Value-Added Tax (VAT) components.

3. Business Households and Individuals

Business households are typically taxed under the personal income tax (PIT) regime. However, if restructured into an enterprise, they become subject to CIT.

• Applicable based on business scale or legal transformation into an enterprise.
• Assessed on a case-by-case basis by tax authorities.