Vietnam Introduces New Tax Relief Measures for Business Households and Micro-Enterprises in 2026

Vietnam has expanded tax relief measures for business households and micro-enterprises under Decree No. 141/2026/ND-CP, effective from January 1, 2026.

The Decree raises the exemption threshold for value-added tax (VAT) and personal income tax (PIT) to VND 1 billion in annual revenue, while also providing corporate income tax (CIT) relief for eligible micro-enterprises. It further sets out transitional provisions covering tax refunds, offsets, and periodic reporting obligations.

Higher VAT and PIT exemption threshold for business households

One of the key changes under Decree No. 141/2026/ND-CP is the increase in the annual revenue threshold used to determine VAT and PIT obligations for business households.

Business households and business individuals generating annual revenue of up to VND 1 billion are now exempt from VAT and PIT, replacing the previous threshold of VND 500 million per year.

For example, a food business household generating annual revenue of VND 800 million may now fall within the exemption threshold and become exempt from both VAT and PIT under the updated rules.

CIT exemption for eligible micro-enterprises

Beyond the changes affecting business households, Vietnam has also introduced corporate income tax (CIT) relief for certain micro-enterprises.

Eligible enterprises with annual revenue not exceeding VND 1 billion are exempt from CIT. Newly established businesses expecting revenue below the threshold may also no longer need to make provisional CIT payments throughout the year.

A newly incorporated company generating annual revenue of VND 700 million, for instance, may now qualify for full CIT exemption under the new rules.

Transitional provisions for tax year 2026

The Decree also includes transitional arrangements covering tax payments already made during the 2026 tax year.

Businesses that paid taxes earlier in 2026 based on previous thresholds may still qualify for the updated treatment if they satisfy the new eligibility conditions. In such cases, excess tax amounts may either be offset against future tax liabilities or refunded in accordance with applicable tax procedures.

For instance, a business that has already paid VND 5 million in excess tax and later incurs a future tax obligation of VND 8 million may use the excess amount to reduce the outstanding liability, leaving only VND 3 million payable.

Revenue reporting obligations remain in place

Although the new provisions expand tax exemptions for certain businesses, periodic reporting obligations continue to apply in specific cases.

Under the Decree, newly established businesses in 2026 with annual revenue not exceeding VND 1 billion must submit revenue reports twice a year, before July 31 and January 31 of the following year.

The reporting requirement allows authorities to verify whether actual revenue remains within the applicable exemption threshold.

How businesses can prepare for the changes

With the new tax policies now in effect, businesses may benefit from reviewing annual revenue levels and assessing whether they remain eligible for available tax relief.

Maintaining accurate accounting and revenue records will also remain important, particularly for businesses subject to reporting obligations. Proper documentation can help reduce compliance risks while supporting future tax declarations where necessary.

Businesses with more complex structures or uncertain tax positions may also consider seeking professional guidance to better understand the potential impact on their operations and compliance requirements. For further assistance, please contact BBCIncorp via service@bbcincorp.com.