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CORPORATE INCOME TAX
 12 Months Ended
Dec. 31, 2024
CORPORATE INCOME TAX  
CORPORATE INCOME TAX

19.CORPORATE INCOME TAX

The tax report filed by the entities under the Group is subject to examination by the tax authorities. As the application of tax laws and regulations is susceptible to varying interpretations, the amounts reported in the consolidated financial statements are more-likely-than-not and could change based on the interpretation of tax law by the relevant legal authorities.

The major components of tax expense for the years ended December 31, 2024, 2023 and 2022 were:

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

​

    

2022

    

2023

    

2024

    

2024

​

​

VND million

​

VND million

​

VND million

​

USD

Income taxes

 

  

 

  

​

​

 

  

Current income tax expense

 

3,813

 

111,427

​

56,926

 

2,339,264

Deferred income tax expense/(income)

 

1,058,522

 

(34,502)

​

(86,621)

 

(3,559,523)

Income tax expense reported in the consolidated statement of operations

 

1,062,335

 

76,925

​

(29,695)

 

(1,220,259)

​

​

19.CORPORATE INCOME TAX (continued)

The reconciliation of tax computed by applying the Vietnam’s statutory tax rate of 20% to the Group’s income tax expense of the years presented are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

​

    

2022

    

2023

    

2024

    

2024

​

​

VND million

​

VND million

​

VND million

​

USD

Loss before tax expense

 

(51,896,362)

 

(60,173,423)

​

(77,384,644)

 

(3,179,973,043)

Income tax benefit computed at the Vietnam statutory tax rate of 20%

 

(10,379,272)

 

(12,034,685)

​

(15,476,929)

 

(635,994,617)

Effect of preferential tax rates

 

4,397,659

 

5,189,245

​

9,534,979

 

391,821,615

Foreign tax rates differential

 

(232,379)

 

(341,129)

​

(376,196)

 

(15,459,051)

Deemed contribution from owners through cash donation to the Company (i)

​

—

​

1,974,626

​

2,035,221

​

83,633,491

Deemed contribution from owner through free electric charging offered to VinFast’s customers (i)

​

—

​

—

​

590,075

​

24,247,997

Others

 

685,487

 

492,047

​

542,007

 

22,272,735

Change in valuation allowance

 

6,590,840

 

4,796,821

​

3,121,148

 

128,257,571

Estimated income tax expense

 

1,062,335

 

76,925

​

(29,695)

 

(1,220,259)

(i)These amount are treated as taxable income under Vietnam tax regulations.

The Vietnam statutory income tax rate was used because the majority of the Group’s operations are based in Vietnam.

19.1 Current corporate income tax

Singapore

The Company incorporated in Singapore is subject to the Singapore Corporate Tax rate of 17% for the years ended December 31, 2024.

Vietnam

The statutory corporate income tax rate applied for subsidiaries in Vietnam is 20% of taxable income, except for VinFast Vietnam, VinEG and VinES Ha Tinh.

The statutory CIT rate applicable to the income generated from investment projects of these entities is 10% in the first consecutively 15 years commencing from the first year in which income from investment project is generated. These entities are entitled to an exemption from CIT for investment project for 4 years commencing from the first year in which a taxable income from investment project is earned or commencing from the fourth year from the first year in which revenue is generated if no taxable profit is earned for the first 3 years, and a 50% reduction of CIT for the subsequent 9 years. Details of these tax incentives period depend on the specific condition of each entity.

Others

The CIT rates applicable to subsidiaries established in countries other than Singapore and Vietnam vary depending on the regulations of the local tax authorities.

19.CORPORATE INCOME TAX (continued)

19.2 Deferred tax

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​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

​

    

2022

    

2023

    

2024

    

2024

​

​

VND million

​

VND million

​

VND million

​

USD

Deferred tax assets

 

  

 

  

​

​

 

  

Unrecognised tax loss carried forward

 

3,285,533

 

5,202,753

​

8,936,844

 

367,242,408

Deferred tax assets from lease back transaction

 

3,127,683

 

3,492,038

​

3,625,123

 

148,967,454

Written-off R&D expenses

 

971,726

 

2,249,112

​

3,252,649

 

133,661,352

Lease liabilities

 

904,451

 

1,063,152

​

721,285

 

29,639,819

Excess of deductible capped interest expense carried forward

 

734,621

 

1,131,794

​

1,886,951

 

77,540,621

Start-up costs

 

704,720

 

794,479

​

739,605

 

30,392,644

Provision for net realizable value of inventory

 

192,141

 

446,205

​

463,188

 

19,033,820

Impairment of long-lived assets

 

122,954

 

44,663

​

539,442

 

22,167,331

Others

 

173,872

 

728,463

​

1,494,371

 

61,408,301

Total deferred tax assets

 

10,217,701

 

15,152,659

​

21,659,458

 

890,053,750

Less valuation allowance

 

(7,911,734)

 

(12,513,175)

​

(19,115,404)

 

(785,510,746)

Total deferred tax assets, net amount

 

2,305,967

 

2,639,484

​

2,544,054

 

104,543,004

Deferred tax liabilities

 

​

 

​

​

​

 

​

Deferred tax liabilities from lease back transaction

 

(2,354,879)

 

(2,442,623)

​

(2,437,689)

 

(100,172,139)

Right-of-use assets

 

(904,451)

 

(1,063,152)

​

(721,285)

 

(29,639,819)

Others

 

(106,403)

 

(158,973)

​

(323,723)

 

(13,302,774)

Total deferred tax liabilities

 

(3,365,733)

 

(3,664,748)

​

(3,482,697)

 

(143,114,732)

Net deferred tax liabilities

 

(1,059,766)

 

(1,025,264)

​

(938,643)

 

(38,571,728)

Reflected in the consolidated balance sheet as follows:

 

​

 

​

​

​

 

​

Deferred tax assets

 

—

​

—

​

—

 

—

Deferred tax liabilities

 

(1,059,766)

 

(1,025,264)

​

(938,643)

 

(38,571,728)

Deferred tax liabilities, net

 

(1,059,766)

 

(1,025,264)

​

(938,643)

 

(38,571,728)

​

19.3 Valuation allowance for deferred tax assets

Full valuation allowances have been provided where, based on all available evidence, management determined that it is more likely than not that deferred tax assets will not be realizable in future tax years. Movement of valuation allowance is as follow:

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​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31, 

​

    

2022

    

2023

    

2024

    

2024

​

​

VND million

​

VND million

​

VND million

​

USD

Balance at beginning of the year

 

2,840,310

 

7,911,734

​

12,513,175

 

514,204,849

Net change in valuation allowance

 

5,071,424

 

4,601,441

​

6,602,229

 

271,305,897

Balance at end of the year

 

7,911,734

 

12,513,175

​

19,115,404

 

785,510,746

​

Tax losses carried forward

The tax losses carried forward mainly come from Vietnamese entities, which are entitled to carry tax losses forward to offset against taxable income arising within five years subsequent to the year in which the loss was incurred.

As of December 31, 2024, the Group had accumulated tax losses of VND89,765.2 billion (USD3,688.7 million) available for offset against future taxable profit. These are estimated accumulated tax losses as per the CIT declarations of the consolidated entities which have not been finalized by the local tax authorities as of the date of these consolidated financial statements.

19.CORPORATE INCOME TAX (continued)

19.3 Valuation allowance for deferred tax assets (continued)

Tax losses carried forward (continued)

No deferred tax assets have been recognized in respect of these accumulated tax losses because future taxable profit cannot be ascertained at this stage.

The Group has tax losses mainly arising in Vietnam. The Vietnamese entities is entitled to carry tax losses forward to offset against taxable income arising within 5 years subsequent to the year which the loss was incurred. As at the consolidated balance sheet date, the Vietnamese entities had accumulated tax losses of approximately VND67,893 billion, of which tax losses that will be forfeited in 2025 is approximately VND10,146 billion, available for offset against future taxable income within five years subsequent to the year in which the loss incurred.

As of December 31, 2024, the Group has tax losses arising in subsidiaries other than Vietnam of VND21,871.9 billion (USD898.8 million) that will be carried for deduction against future taxable profit depending on the local tax regulations.

Interest expense exceeds the prescribed threshold

The Group is entitled to carry forward interest expense exceeding the prescribed threshold that have not been deducted when calculating CIT for the current year (“non-deductible interest expenses”) to the following year when determining the total deductible interest expenses of the following year. The subsequent period that the interest expense can be carried forward to will not exceed consecutive period of 5 years subsequent to the year in which the non-deductible interest expense incurred. No deferred tax assets were recognised in respect of the remaining non-deductible interest expense because of the uncertainty in predicting whether this non-deductible interest expense will be carried forward in the remaining time limit or not.

Uncertain tax position

The management takes into account the requirement of ASC 740 for all uncertainty over income tax treatments. In determining the treatment for uncertain tax positions, the management considers either the probability of whether the relevant taxation authority will accept the tax treatment under tax law or preparing its income tax filings and supporting tax treatments. Based on the reasonable estimates and prudent judgements of the management, it is more likely than not that the taxation authority will accept all uncertain tax treatments of the Group. Accordingly, the Group did not record any uncertain tax position as of December 31, 2024, 2023 and 2022.

Income tax returns are filed in multiple jurisdictions and are subject to examination by taxing authorities throughout the world. We have open tax years from 2020 to 2024 with various significant tax jurisdictions. Tax authorities may have the ability to review and adjust net operating loss or tax credit carryforwards that were generated prior to these periods if utilized in an open tax year. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle.