The Corporate Income Tax Law 2025 (“CIT Law 2025”) was promulgated with a number of significant changes affecting corporate tax obligations, particularly in relation to tax rates, deductible expenses, and tax incentive mechanisms (ATA has published an update on the Corporate Income Tax Law 2025 at: 2025 CORPORATE INCOME TAX LAW: SMES ELIGIBLE FOR PREFERENTIAL CORPORATE INCOME TAX RATES OF ONLY 15% – 17%).
On that basis, on 15 December 2025, the Government issued Decree No. 320/2025/ND-CP (“Decree 320”), detailing and guiding the implementation of a number of provisions of the CIT Law 2025. In general, Decree 320 reflects an increasingly stringent tax administration approach, focusing on the substance of transactions, stricter control over deductible expenses, and narrowing gaps in the application of tax incentives. In this article, ATA Legal Services highlights several new and notable provisions that have a direct impact on business operations, as follows:
1. Transfer of shares in non-listed companies is regarded as capital transfer
Decree 320 provides that income from capital transfer includes:
(i) income derived from the transfer of part or all of the capital invested by an enterprise in one or more other organizations or individuals (including enterprise sales, transfer of capital contribution rights, and other forms of capital transfer in accordance with law); and
(ii) income from the transfer of shares in companies that are not public companies, and the transfer of shares in organizations that are neither listed nor registered for trading under securities laws.
Accordingly, except for securities transactions conducted on the market, transfers of shares in organizations or companies that are not public companies or listed entities are considered capital transfers. This is a completely new interpretation, fundamentally different from the current understanding under Official Letter No. 12501/BTC-CST dated 20 September 2010 on tax policies applicable to share transfer activities in joint stock companies. Specifically, under the current regime, capital transfer transactions only include transfers of capital contributions in limited liability companies, while transfers of shares in joint stock companies - even non-public, non-listed companies - are treated as securities transfers.
In principle, these regulations on capital transfer and securities transfer will also be applied correspondingly under the Personal Income Tax Law 2025 (which has been passed by the National Assembly and is expected to take effect from 1 July 2026) and its guiding documents. Accordingly, the methods for tax declaration, determination of taxable income, and applicable tax rates for individuals engaging in capital or securities transfers will change substantially.
2. All enterprise transactions of VND 5 million or more must have non-cash payment evidence
Under Decree 320, the threshold of VND 5 million for invoices relating to purchases of goods or services requiring non-cash payment evidence is determined based on the following principles:
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A single purchase of goods or services with a value of VND 5 million or more;
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Multiple purchases of goods or services from the same seller, each valued at less than VND 5 million, but with a total value of VND 5 million or more within the same day.
In addition to purchases of goods and services, Decree 320 establishes the principle that all other expenses of an enterprise shall only be regarded as reasonable, valid, and deductible for CIT purposes if supported by non-cash payment evidence. Specifically:
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Where an enterprise authorizes or assigns an employee to make payment on its behalf, such expense may still be considered deductible provided that it fully satisfies invoice and documentation requirements, and the enterprise makes a non-cash payment to reimburse the employee.
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Expenses directly related to employees (including salaries, additional benefits, business travel expenses, and purchases of goods or services for work purposes) that do not satisfy the non-cash payment requirement will not be deductible when determining taxable CIT income.
Accordingly, compared to previous regulations, Decree 320 has a significant impact on controlling payment methods for expenses, particularly those incurred through employees. Enterprises should review internal payment procedures and reimbursement documentation to ensure compliance with the new deductibility requirements.
3. Clear regulations on employee-related expenses that are deductible and non-deductible for CIT purposes
a) Deductible expenses include:
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Depreciation expenses for fixed assets not directly used in the production or business of goods and services but serving employees working at the enterprise, including: mid-shift rest houses, mid-shift canteens, changing rooms, restrooms, medical rooms or stations, vocational training facilities, libraries, kindergartens, sports facilities, and equipment and furnishings qualifying as fixed assets installed in such facilities; clean water tanks, parking facilities; employee shuttle vehicles; employee housing; costs of constructing facilities and purchasing machinery and equipment qualifying as fixed assets used for vocational education activities and assets serving employees directly.
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Assets classified as tools, instruments, or reusable packaging that do not meet the criteria for recognition as fixed assets (including those serving employees). The purchase cost of such assets may be allocated gradually into production and business expenses, for a maximum period of three (03) years.
b) Non-deductible expenses include:
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The portion of welfare expenses directly benefiting employees that exceeds one (01) month of the average actual salary paid in the tax year, including: expenses for funerals, weddings of employees and their families; vacations; medical support; educational support; assistance to employees’ families affected by natural disasters, epidemics, accidents, or illnesses; rewards for employees’ children with good academic achievements; travel support during holidays; accident insurance (excluding compulsory insurance under specialized laws), health insurance, voluntary insurance, and other welfare expenses. The average monthly salary is determined by dividing the total salary fund actually paid in the year by 12 months.
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Contributions exceeding VND 5 million per month per employee for supplementary pension insurance, social security–oriented funds, voluntary pension insurance, or life insurance.
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Salaries, wages, and other payments recorded as expenses but not actually paid or lacking lawful payment evidence.
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Salaries, wages, and bonuses for employees that are not specifically stipulated in terms of eligibility and entitlement levels in one of the following documents: labor contracts; internal transfer documents for foreign employees; collective labor agreements; financial regulations; or bonus regulations issued by the Chairman of the Board, General Director, or Director.
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Salaries, wages, and allowances payable to employees that remain unpaid by the tax finalization deadline, except where the enterprise has established a salary reserve fund, which may not exceed 17% of the actual salary fund.
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In-kind uniform expenses without invoices or vouchers; cash uniform allowances exceeding VND 5 million per person per year.
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Business trip allowances, travel expenses, and accommodation expenses shall be deductible if supported by valid invoices and documents. Where expenses of VND 5 million or more are paid by employees via non-cash payment methods, they are deemed to satisfy the enterprise’s non-cash payment requirement provided that: valid invoices are obtained; the enterprise issues a business trip assignment decision; and internal regulations permit such payment and reimbursement.
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Additional expenses for female employees not in accordance with eligible cases, including training costs, salaries and allowances for kindergarten teachers organized by the enterprise, additional health check-ups, and post-maternity allowances not compliant with regulations.
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Severance pay, job-loss allowances, compensation, or benefits for occupational accidents or diseases not in compliance with legal provisions.
4. Detailed guidance on the application of CIT incentives
Based on the CIT incentive policies stipulated in the CIT Law 2025, Decree 320 supplements and clarifies a number of implementation details to ensure consistency in practice. Notable points include:
4.1. Guidance on the disbursement timeline for total investment capital for projects eligible for special investment incentives and support under Article 20.2 of the Investment Law. Accordingly, total investment capital must be fully disbursed within ten (10) years from the date of issuance of the Investment Registration Certificate or investment approval.
4.2. For operating projects that have exhausted their incentive period, additional income derived from expansion investments meeting one of the following criteria shall be eligible for tax exemption or reduction (but not preferential tax rates):
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Increase in fixed asset value of at least VND 40 billion for projects in incentive sectors, or VND 20 billion for projects located in incentive areas;
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Increase in the proportion of fixed asset value of at least 20% compared to the pre-expansion level;
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Increase in designed capacity of at least 20% compared to the pre-expansion level.
4.3. Clarification of criteria for enterprises employing a large number of female employees for tax incentive purposes.
4.4. Household businesses must operate for at least 12 months before converting into enterprises to qualify for CIT incentives.
This Decree takes effect from 15 December 2025 and applies from the CIT tax period of 2025. However, the regulation on non-cash payment evidence takes effect from 15 December 2025.
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