Vietnam Cuts Income Tax by 30% for Small Businesses, Business Households and Business Individuals in 2026-2027

Vietnam will reduce corporate income tax (CIT) and personal income tax (PIT) payable by 30% for eligible enterprises and resident individuals with business income under Resolution No. 43/2026/QH16, passed by the 16th National Assembly on August 24, 2026.

The Resolution took effect on August 24, 2026 and applies to the 2026 and 2027 tax periods. The reduction is available only where annual revenue in 2026 and 2027 does not exceed VND 10 billion.

30% PIT reduction for business households and business individuals

Under the Resolution, resident individuals are entitled to a 30% reduction in the PIT payable on their business income for the 2026 and 2027 tax periods, provided they meet this revenue threshold.

According to Viet Nam Government News, this threshold covers most business households and business individuals currently operating in the market, from traditional household businesses in markets and commercial streets to individuals doing business on digital platforms, through e-commerce or by renting out property. Only very large individual businesses with annual revenue above this level fall outside the scope of the reduction.

30% CIT reduction for enterprises and organizations

Enterprises and organizations established under Vietnamese law are entitled to a 30% reduction in the CIT payable for the 2026 and 2027 tax periods, subject to the same revenue threshold.

Where an enterprise is already enjoying tax incentives under the CIT Law or other laws and resolutions of the National Assembly, the 30% reduction is calculated on the CIT payable after those incentives have been deducted.

Exclusion for enterprises formed through division or separation

The CIT reduction does not apply to enterprises formed through the division or separation of an enterprise after the Resolution took effect, where the total annual revenue in 2026 and 2027 of the enterprises after the division or separation exceeds the threshold.

Guiding decree and upcoming tax deadline

The Resolution assigns the Government to provide detailed regulations for its implementation. According to Viet Nam Government News, the Government plans to issue the guiding decree in October 2026.

For business households and business individuals paying tax under the declaration method, the deadline for filing and paying tax for Q3 2026 is October 31, 2026. If the decree is issued in time, taxpayers will have the legal basis and specific forms to apply the reduction in their Q3 and Q4 2026 tax declarations.

Although the decree is expected in October 2026, the reduction applies to the full 2026 tax period, from January 1 to December 31, 2026. Viet Nam Government News notes that the timeliness of the decree will depend largely on how it handles the offsetting of tax already paid in previous quarters and how the revenue threshold is determined.

How businesses can prepare for the changes

Businesses, business households and business individuals may benefit from reviewing their expected revenue for 2026 and 2027 against the VND 10 billion threshold and maintaining accurate accounting and revenue records to support their tax declarations.

It will also be important to follow the issuance of the guiding decree, particularly the provisions on offsetting tax already paid and on cases where actual annual revenue ends up exceeding the threshold.

As the implementing guidance is finalized, staying informed about the applicable requirements will help businesses better understand their eligibility and prepare for the relevant tax declaration procedures.

For businesses seeking to establish or manage a company in Vietnam or other jurisdictions, BBCIncorp provides company incorporation and corporate support services to help entrepreneurs navigate business setup and ongoing administrative requirements. To learn more about our services, contact service@bbcincorp.com.

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