Vietnam CIT incentives in 2026: who still qualifies and who has lost out?
The short answer
From 1 October 2025, CIT Law No. 67/2025/QH15 restructured Vietnam's tax incentive regime. Incentives now rest on two criteria only: incentivised sectors and incentivised locations.
Who has lost out: ordinary industrial zones are no longer incentivised locations. New or expansion projects in industrial zones licensed from 1 October 2025 no longer receive location-based incentives, unless the zone lies in an area with difficult or extremely difficult socio-economic conditions.
Who has gained: the list of incentivised sectors has been widened significantly to include high technology, strategic technology, semiconductors, artificial intelligence, data centres, clean energy and innovation.
Projects already enjoying incentives keep them for the remaining period.
The new picture: incentives follow "what" rather than "where"
For more than a decade, locating a factory in an industrial zone almost automatically brought a 2-year tax exemption and a 50% reduction for the following 4 years. The 2025 CIT Law ends that.
The policy message is clear: the State rewards value-adding and technology-driven activity, not the location of a factory. For investors, the key question when structuring a project is no longer "which industrial zone?" but "does the project fall within an incentivised sector?"
Who still qualifies?
1. Businesses in incentivised sectors. The list has been expanded and systematised. The main groups are:
high technology, strategic technology, digital technology, semiconductors, AI and data centres;
software, cybersecurity products and services, and digital technology industry products;
supporting industries, key industries, renewable and clean energy, and environmental protection;
key infrastructure such as power, water, transport, ports and airports;
high-tech agriculture and agro-forestry-fishery processing;
science and technology enterprises and high-tech enterprises;
projects eligible for special investment incentives and support under the Investment Law;
socialised sectors such as education, healthcare, culture, sport and environment.
2. Businesses in incentivised locations. These are:
economic zones, high-tech parks, high-tech agricultural zones and concentrated digital technology zones;
areas with difficult or extremely difficult socio-economic conditions, as listed by the Government.
3. Start-up support facilities. Projects investing in technical facilities, incubators and co-working spaces supporting innovative SME start-ups qualify for a 17% rate for 10 years.
4. Projects already within their incentive period. Projects licensed before 1 October 2025 that are enjoying incentives continue to do so for the remaining period. If the new rules offer a better incentive, the business may switch to it for the remaining period, starting from the 2025 tax year.
Who has lost out or seen incentives narrowed?
Category | Change | Note |
New or expansion projects in ordinary industrial zones licensed from 1 October 2025 | No location-based incentive (previously a 2-year exemption and 50% reduction for 4 years) | Incentives may still apply if the project is in an incentivised sector, or the zone lies in a difficult or extremely difficult area |
New projects in economic zones outside difficult areas | Incentive reduced to a 17% rate for 10 years | The 10% rate for 15 years applies to economic zones in difficult or extremely difficult areas |
Income incentivised under the old law but no longer eligible under the new law | Incentives end from 1 October 2025 | Each incentivised income stream should be re-tested |
Incentives under other sector laws that differ from the CIT Law | The CIT Law prevails | Except the Capital Law and National Assembly resolutions on special mechanisms |
Expansion projects: two scenarios
Scenario 1: the existing project is still within its incentive period. Additional income from the expansion enjoys the remaining incentive of the existing project. It does not need to be accounted for separately.
Scenario 2: the existing project's incentives have expired. Additional income qualifies for exemptions and reductions as if it were a new project in the same sector or location. It does not, however, qualify for a preferential rate.
An important point on scope:
income from products manufactured in an incentivised location still qualifies, even if the products are sold elsewhere;
for trading and service projects, only income arising in the incentivised location qualifies.
A note for multinationals: incentives and the global minimum tax
For groups with consolidated revenue of EUR 750 million or more, CIT incentives may be partly neutralised by the global minimum tax. Where the effective tax rate in Vietnam falls below 15%, the difference may be collected through the Qualified Domestic Minimum Top-up Tax (QDMTT) under Decree No. 236/2025/ND-CP.
When planning a new project, these groups should assess three factors together:
sector-based CIT incentives;
the impact of the global minimum tax;
non-tax investment support, such as the Investment Support Fund under Decree No. 182/2024/ND-CP, where the project qualifies.
Illustrative case
A foreign-invested electronic components manufacturer plans a new factory in an industrial zone in the Southeast region, licensed in 2026.
Under the old law, the project would almost certainly have received a 2-year exemption and a 50% reduction for 4 years by virtue of the industrial zone. Under the new law, that route is closed. Incentives now depend on demonstrating that the product falls within an incentivised sector, for example a priority supporting industry product or a high-tech product.
How the project's objectives are described in the investment file, how products are classified and which certifications are prepared now determine the value of the incentive. All of this needs to be done at the stage of applying for the Investment Registration Certificate.
Checklist
List every incentivised income stream and test it against the sector and location lists under Decree 320/2025.
Identify the licensing or in-principle approval date of each project relative to 1 October 2025.
For expansions: determine whether the original project is still within its incentive period to apply the correct scenario.
For new projects: design project objectives and evidence of incentivised sector status from the licensing stage.
For groups within the global minimum tax: model the effective tax rate before settling the incentive structure.
Keep annual evidence of incentive conditions, as incentives are self-assessed at finalisation.
FAQs
Do businesses in industrial zones still get CIT incentives?
Projects licensed from 1 October 2025 in ordinary industrial zones no longer receive location-based incentives. They may still qualify through an incentivised sector, or if the zone lies in a difficult or extremely difficult area.
Will existing incentives under the old law be cut?
No. Projects keep their incentives for the remaining period and may switch to a better incentive under the new rules. Income that no longer qualifies under the new law loses its incentive from 1 October 2025.
What is the highest preferential rate today?
A 10% rate for 15 years, available for new projects in the highest-priority sectors or incentivised locations, typically combined with tax exemption and reduction periods.
Do incentives still matter for groups subject to the global minimum tax?
Yes, but their real value must be recalculated based on the effective tax rate and the QDMTT.
Legal basis
CIT Law No. 67/2025/QH15 (Articles 12, 13, 14 and 15).
Decree No. 320/2025/ND-CP guiding the CIT Law.
Investment Law No. 143/2025/QH15.
Resolution No. 107/2023/QH15 and Decree No. 236/2025/ND-CP on the global minimum tax.
Decree No. 182/2024/ND-CP on the Investment Support Fund.
How W&A can help
In 2026, tax incentives no longer come with the location. Projects must be designed to earn them. Combining investment law and tax expertise on one platform, W&A supports businesses with:
Review of existing incentives: identifying which income streams keep or lose incentives, and opportunities to move to a better incentive.
Incentive design for new and expansion projects: from project objectives and the Investment Registration Certificate application to evidence of incentivised sector status.
Global minimum tax modelling: assessing the real value of incentives and supporting QDMTT and GIR filings.
Location selection advice: comparing industrial zones, economic zones and high-tech parks on legal, tax and cost grounds.
Defending incentives in audits: preparing evidence of eligibility and handling explanations with the tax authority.
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