Official Letter No. 850/DAN-QLDN2 dated 27 February 2026- Da Nang Tax Department.
The Da Nang Tax Department has recently issued Official Letter No. 850/DAN-QLDN2, providing guidance on the application of tax rate incentive of corporate income tax (“CIT”) under Decree No. 320/2025/ND-CP.
According to the Official Letter, where an enterprise established in Vietnam operates as a subsidiary, including wholly foreign-owned enterprises, it would not qualify for the application of the preferential CIT rates of 15% and 17% as prescribed under Clauses 2 and 3, Article 11 of Decree No. 320/2025/ND-CP.
The Da Nang Tax Department refers to Clause 1, Article 195 of the Law on Enterprises No. 59/2020/QH14 dated 17 June 2020 and Clauses 2, 3 and 4, Article 11 of Decree No. 320/2025/ND-CP dated 15 December 2025 of the Government:
Article 195. Parent company and subsidiary
A company shall be considered a parent company of another company if it falls under one of the following cases:
(a) Holding more than 50% of the charter capital or the total number of ordinary shares of such company;
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Article 11. Tax rates
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(c) The 15% and 17% tax rates stipulated under this Article shall not apply to enterprises established in accordance with Vietnamese law that are subsidiaries or enterprises having related-party relationships, where the related parties do not meet the conditions for application of the tax rates as prescribed in Clauses 2 and 3 of this Article.
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