Small businesses in Vietnam have gained another practical form of support. Under Resolution 43/2026/QH16, passed by the National Assembly on 24 August 2026, and Decree 398/2026/ND-CP, issued on 29 October 2026, enterprises with annual revenue of no more than VND10 billion get a 30% reduction in corporate income tax (CIT) payable for the 2026 and 2027 tax years. A similar measure applies to personal income tax on business income for household businesses and individuals under the same revenue threshold.
Who qualifies?
- Enterprises established under Vietnamese law, including foreign-owned LLCs and joint stock companies, with annual revenue of VND10 billion or less.
- Eligibility is tested separately for 2026 and 2027, based on actual full-year revenue.
- The 30% reduction is applied last, after the tax rate and any other exemptions or reductions.
How it works
Under the draft guidance, firms expecting revenue of no more than VND10 billion can apply the reduction in their quarterly provisional payments and confirm it at annual finalisation, with filings made electronically. If revenue exceeds the threshold at year-end, the reduction must be repaid, so careful revenue forecasting is needed. The measure does not apply to firms split or divided after 24 August 2026 if the new entities' combined revenue exceeds the threshold, to prevent abuse.
Part of a private-sector support package
- CIT exemption for firms with revenue up to VND1 billion under existing rules.
- Preferential rates of 15% and 17% for smaller firms under the 2025 CIT Law framework.
- Deferral of the Q3 provisional payment to 30 December 2026 for small and micro firms under Decree 245/2026/ND-CP.
- Abolition of lump-sum tax for household businesses from 1 January 2026, in the spirit of Resolution 68-NQ/TW on private sector development.
Impact on Vietnam's economy
Small and medium enterprises make up most active businesses and create a large share of jobs. The tax saved becomes internal capital that firms can reinvest in equipment, digital transformation or new hires instead of borrowing from banks. The policy also encourages household businesses to formalise, keep transparent books and access finance more easily. In the long run, a broader formal tax base offsets the short-term revenue loss.
Notes for businesses
- The VND10 billion threshold is strict: revenue of VND9.9 billion gets the full reduction, VND10.1 billion gets none.
- Revenue includes financial income, other income and revenue of dependent branches.
- Firms with no tax payable (for example, loss-making ones) gain nothing from this measure.
vietnamii.com view: this is a practical, well-targeted and well-timed policy that helps make the private sector the economy's most important driver. Firms should review expected revenue now to apply it from the next provisional payment.