Vietnam enacts 30% income-tax reduction for qualifying small businesses

Revenue-limited relief

The decree took effect on issuance and implements Resolution 43/2026/QH16. Its relief is conditional on annual revenue not exceeding VND 10 billion; it is not a general rate cut. Eligibility must be tested for each of the 2026 and 2027 tax years.^[1][2]

Personal income tax

Article 2 covers Vietnam-resident individuals conducting production or business activities, including household-business registrants and authorised household-business representatives. The reduction applies to personal income tax payable on all business income, regardless of the calculation method. Individuals claim it using the prescribed form with the relevant periodic or annual return. A person withholding and remitting tax for a qualifying business individual applies the reduction to the withheld amount and reports it with its own return.^[2]

Corporate income tax

Article 3 covers enterprises and organisations established under Vietnamese law, including cooperatives, public service units and other qualifying organisations with business income. The 30% reduction is calculated on corporate income tax payable for the relevant year after existing incentives have been applied. Revenue for the VND 10 billion test includes sales and service revenue, financial revenue and other income. The decree excludes certain businesses formed by post-resolution divisions where the combined revenue of the resulting businesses exceeds the threshold.^[2]

Payments and true-ups

Businesses may estimate eligibility and apply the reduction when making quarterly provisional corporate income-tax payments. If actual annual revenue exceeds VND 10 billion, the company must pay tax under the ordinary rules, with late-payment treatment governed by the referenced tax-administration provisions. For individuals, crossing the threshold removes eligibility and requires adjustment and repayment of relief claimed; the decree states a specific late-payment treatment through the filing deadline for the period in which cumulative revenue exceeds the threshold.^[2]

Action for tax teams

Tax teams should screen resident business individuals and Vietnamese-established organisations against the revenue test for each year, then align withholding, provisional payments and returns with the prescribed forms. The Government text reviewed is in Vietnamese. Revenue measurement, taxpayer status and filing mechanics should be checked against the linked implementing rules and subsequent tax-authority guidance before relief is claimed.^[1][2]