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  • Service: Tax, International Corporate Tax, Mergers & Acquisitions, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/22/2012

Vietnam - Corporate income tax changes effective 10 September 2012 

August 22: Vietnam’s Ministry of Finance issued guidance concerning the determination of corporate income tax. The changes are effective 10 September 2012, and apply for tax year 2012 and later. Circular 123 / 2012 / TT-BTC (27 July 2012)

Among the amendments are the following measures relating to taxable income.


  • An enterprise is to separately account for profits and losses from the transfer of (1) a project, (2) rights relating to project implementation, or (3) rights to explore, exploit, and process minerals because these are not entitled to corporate income tax incentives or allowed to be offset against income from other business activities conducted by the enterprise.
  • Prepaid revenue from asset leasing activities can either be allocated over the life of the lease or recognized in full in one tax year (for corporate income tax purposes); however, revenue related to a tax-incentive business is to be allocated over the lease term.
  • Gains from revaluation of assets (except for land-use rights) made for capital contribution purposes are to be treated as “other income” and subject to specific rules.
  • Income realized from share swap transactions as part of a corporate restructuring is now formally subject to corporate income tax.

Other measures relate to determinations of:


  • Exempt income—income realized upon the transfer of certificates for emission reduction and share premiums on issuance of shares
  • Deductible expenses—new rules for asset depreciation, for expensing purchases of life insurance for employees, for expensing costs of tools and equipment
  • Non-deductible expenses—severance payments, certain costs of goods sold if consumption rates not previously provided to tax office
  • Tax incentives—no incentives for a new enterprise due to a change in legal / ownership form, or for investment expansion projects by existing companies
  • Loss carryforwards—losses to be carried forward for five years, and losses from prior years may be offset against provisional quarterly income from the following year
  • Corporate income tax rates—for property transfers, the provisional deemed tax rate is reduced to 1% (from 2%) on proceeds when associated expenses have not yet been determined; and the corporate income tax rates of 40% - 50% apply with respect to income from searching, exploring, exploiting rare and precious minerals (but not oil and gas)

Read an August 2012 report [PDF 375 KB] prepared by the KPMG member firm in Vietnam: Tax Alert (August 2012): The Ministry of Finance has just officially issued Circular 123 / 2012 / TT-BTC



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