How to reduce corporate tax liability legally?

Paying taxes is a tax compliance that businesses, whether large or small, must do. However, many businesses today want to protect their profits while not being able to reduce the cost of purchasing input goods, not being able to reduce employee salaries, not being able to reduce rent… So the only way left is how to reduce corporate tax liability legally? This is always the desire of not only businesses but also tax accountants, so S4B Vietnam would like to share with you how to pay less tax without violating the law, to create tax credits and incentives for businesses.

1. Tax credits and incentives for businesses

There are three terms whose boundaries are not really clear: ‘Tax Evasion’, ‘Tax Avoidance’ and ‘Tax Planning’, and if used incorrectly, it can make us, even though we have no intention of breaking the law and becoming guilty.

1.1 Tax evasion is the practice of using methods that are not permitted by law to reduce the amount of tax payable. The two main actions are
(1) hiding information that should be provided to the government agency, for example, selling goods without issuing invoices to reduce revenue, and
(2) creating false information, for example, buying invoices to increase deductible expenses, creating fake records to refund VAT on imported goods. Obviously, tax evasion is illegal and can be prosecuted.

1.2 Tax avoidance is a little more difficult to define. In some aspects, it is the use of methods within the framework of the law to minimize tax costs, for example, applying preferential tax policies or applying loopholes that the law has not yet regulated to carry out transactions translation. Here we have to be very careful because if we make a mistake, we can go from legal tax avoidance to illegal tax evasion.

1.3 Tax planning has a broader, strategic meaning, which is to optimize the amount of tax payable within the framework of the law. Optimization is not minimization. Minimization is the reduction of tax payable but its consequences may be an increase in other expenses or a decrease in income. Tax optimization means somehow making the tax reduction relative to the decrease in income or increase in other expenses.

Transfer pricing strategies for multinational corporations

In other words, we can completely accept an increase in the amount of tax payable if the rate of tax increase is lower than the rate of income increase. To do this, the tax planner must have a view, an overall picture of the interaction between business and taxes that may have an impact on our wallet.
The essence of Tax Planning is the process of finding different tax solutions to determine when, how and whether to conduct certain transactions to optimize the amount of tax payable.

Transfer pricing strategies for multinational corporations are based on the application of the time value of money i.e. paying taxes early or late and the difference in tax value i.e. more or less taxable income and the difference in tax rates due to the tax rate factor of different types of businesses, tax rates in different countries are different.

2. The role of tax consultants in corporate tax planning

There are four methods commonly used by the role of tax consultants in corporate tax planning: creation, conversion, time and separation:

  • Method 1: Creation is taking advantage of tax incentives and benefits from creating branches and subsidiaries, for example, establishing new ones in low tax areas.
  • Method 2: Conversion is changing the operating mechanism, changing the nature of transactions so that the assets and income generated are subject to a lower tax rate than if the conversion were not made.
  • Method 3: Time is shifting the taxable value to a more favorable tax period.
  • Method 4: Separation is dividing the taxable value among two or more taxable entities to reduce the total tax payable by all taxable entities.


How to reduce corporate tax liability legally – Tax Compliance Services 2025

However, 2025 marked a much stronger control than in previous years. Not only strictly managing the issuance and use of invoices, tax departments also regularly coordinate with ward police to inspect business activities of enterprises, continuously review enterprises with too large tax arrears (inventory of goods), and request regular explanations… Therefore, even if you want enterprises to pay the least amount of tax, accountants must be quick to know which number is appropriate for their enterprises.

With 20 years of experience in the field of tax accounting and finance, S4B Vietnam is proud to be a leading enterprise in terms of quality, reputation, responsibility, dedication… with the lowest cost and fast implementation time in tax credits and incentives for businesses.

Coming to S4B Vietnam, you will receive dedicated advice from a team of professional and experienced staff, always ready to listen and provide optimal solutions according to customer requirements. At the same time, we also regularly update prevailing policies and legal regulations to fully meet all the needs of our customers on how to reduce corporate tax liability legally.

Our services include:

  • Tax accounting services
  • Tax settlement services
  • Financial consulting services
  • Electronic invoice services
  • Business establishment services
  • Tax consulting services

For more information about S4B Vietnam’s services, please contact:

S4B Vietnam

  • Address: Unit 701B – 701C, Tower A, Handi Resco 521 Kim Ma Street, Ba Dinh District, Hanoi, Vietnam.
  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn

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