CIT Incentives for Beverage Companies When Sugary Drinks (>5g/100ml) Become Subject to Special Consumption Tax from 1 January 2026
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From 1 January 2026, carbonated beverages under Vietnamese national standards (TCVN) with sugar content above 5g/100ml became subject to special consumption tax (SCT) under Article 2.1(l) of SCT Law 66/2025/QH15. Direct consequence: businesses producing or trading these beverages lose entitlement to corporate income tax (CIT) incentives - including those applicable in extremely disadvantaged areas - for income derived from such beverages. Basis: Article 23.9(c) of Decree 320/2025/ND-CP (15 December 2025) states that the preferential CIT rates of 15% and 17%, plus other CIT incentives, do not apply to income from producing or trading goods and services subject to SCT. The only exceptions are projects manufacturing/assembling cars, aircraft, helicopters, gliders, yachts, and oil refining.
Tax Authority Guidance on SCT and CIT for Sugary Beverages
1. Special Consumption Tax (SCT)
- Taxable item: Beverages under Vietnamese national standards (TCVN) with sugar content above 5g/100ml (Article 2.1(l) of SCT Law 66/2025/QH15)
- Effective date: 1 January 2026 (Article 11.1 of SCT Law 66/2025/QH15)
2. Corporate Income Tax (CIT) - Loss of Incentives
- Rule: Article 23.9(c) of Decree 320/2025/ND-CP (15 December 2025) excludes income from producing or trading SCT-subject goods and services from all CIT incentive schemes
- Scope of excluded incentives: Preferential rates of 15% and 17% (Article 11.2-3); incentives under Articles 4, 19, 20 and 21 of Decree 320/2025/ND-CP
- No exception for extremely disadvantaged area incentives applies to the sugary beverage business
Practical Conclusion
A company established in 2024 selling sugary beverages in an extremely disadvantaged area: from 1 January 2026, income from those beverages is ineligible for CIT incentives because the product is now SCT-subject.
Exceptions under Decree 320/2025
The following projects retain CIT incentives even though their products are SCT-subject: manufacturing/assembly of cars, aircraft, helicopters, gliders, yachts, and oil refining.