Corporate Income Tax Incentives for Investment Projects in Industrial Parks

Corporate income tax (CIT) incentives are an important policy tool that helps businesses optimize costs and improve investment efficiency when establishing manufacturing operations in industrial parks. Depending on the project's eligibility, these incentives may include preferential tax rates, tax exemptions, and tax reductions for specified periods.

What conditions must investment projects in industrial parks meet to qualify for CIT incentives? What preferential tax rates and tax exemption periods are available? This article outlines the current regulations and key considerations for businesses.

1. What Are Corporate Income Tax Incentives?

Corporate income tax is a tax levied on the taxable income earned by enterprises from production and business activities, as well as other sources of income as prescribed by law.

CIT incentives are government policies designed to encourage investment in priority industries and locations. The main forms of incentives include:

- Preferential tax rates: Applying a lower tax rate than the standard rate for a specified period or, in certain cases, throughout the project's operating life.

- Tax exemption: Exempting eligible income from CIT for a specified period.

- Tax reduction: Reducing part of the CIT payable after the tax-exemption period.

For investment projects in industrial parks, identifying the applicable incentives helps businesses estimate tax liabilities, optimize cash flow, and assess long-term financial performance.

2. Eligibility Requirements for CIT Incentives for Projects in Industrial Parks

Under Law on Corporate Income Tax No. 67/2025/QH15 and Decree No. 320/2025/ND-CP, projects may qualify for tax incentives based on their business sectors and investment locations, subject to the following conditions:

- Incentives Based on Business Sectors

Eligible sectors may include:

• High technology, research and development (R&D).
• Software, digital technology, and electronic product manufacturing.
• Supporting industries included in the list of priority products.
• Renewable energy, clean energy, and environmental protection products.
• Energy-efficient products and equipment in priority sectors.

- Incentives Based on Investment Locations

Eligible locations include:

• Areas with exceptionally difficult socio-economic conditions.
• Areas with difficult socio-economic conditions.
• Economic zones, hi-tech zones, high-tech agricultural zones, and concentrated digital technology zones.

3. CIT Incentive Rates for Investment Projects

Depending on the project's eligibility and the income generated, businesses may qualify for preferential CIT rates, tax exemptions, and reductions.

- Preferential CIT Rates

Under Article 13 of the 2025 Law on Corporate Income Tax, notable preferential rates include:

• 10% for 15 years: Applicable to certain projects in specially encouraged sectors or areas with exceptionally difficult socio-economic conditions.
• 17% for 10 years: Applicable to certain projects in incentivized sectors or areas with difficult socio-economic conditions.
• 10%, 15%, or 17% in special cases: Applicable to certain industries and eligible entities that meet specific requirements.

In addition, the standard CIT rate is 20%. Enterprises meeting the statutory revenue requirements may qualify for rates of 15% or 17%. This is a tax policy based on annual revenue and should not be confused with investment incentives.

- Tax Exemption and Reduction Policies

Certain eligible projects may qualify for the following tax exemptions and reductions:

• For projects subject to the 10% preferential tax rate: A tax exemption of up to 4 years, followed by a 50% reduction in CIT payable for up to 9 subsequent years.
• For projects subject to the 17% preferential tax rate: A tax exemption of up to 2 years, followed by a 50% reduction in CIT payable for up to 4 subsequent years.

The exemption and reduction period generally begins in the first year the project generates taxable income. If the project does not generate taxable income within the first three years from the year it first generates revenue, the incentive period begins in the fourth year, as prescribed by law.

These are maximum incentive periods and apply only when the project satisfies the corresponding eligibility requirements.

4. Key Considerations When Applying CIT Incentives

Businesses should consider the following factors to ensure they correctly determine their tax benefits and obligations:

- Identify eligible income: Only income generated from qualifying activities is entitled to the corresponding incentives.

- Verify business sector and location requirements: Projects located in industrial parks are not automatically eligible for tax incentives.

- Distinguish between new and expansion projects: Each project type is subject to specific requirements relating to investment capital, assets, production capacity, and technology.

- Maintain proper accounting records and documentation: Separately track incentivized income and retain supporting documents demonstrating eligibility.

- Keep up with changes in tax regulations: Review current legal provisions and seek professional advice before determining the applicable tax incentives.

5. Explore Investment Opportunities at CEOZONE

With a development orientation focused on green, smart, and sustainable industrial parks, CEOZONE offers industrial land for long-term lease and ready-built factories to meet businesses' needs for establishing or expanding manufacturing operations.

Contact CEOZONE to learn more about planning, infrastructure, and leasing conditions, and identify an investment solution that suits your business.