Vietnam’s government has approved a 30 % reduction in corporate income tax (CIT) and personal income tax (PIT) payable for tax years 2026 and 2027, covering taxpayers whose annual revenue does not exceed VND 10 billion.
Vietnam’s government has issued Decree No. 398/2026/NĐ-CP, reducing CIT and PIT payable by 30% for eligible enterprises, organisations and individuals with annual revenue of up to VND 10 billion. Deputy Prime Minister Nguyễn Văn Thắng signed the decree on behalf of the Prime Minister. It took effect on 29 October 2026, the date of promulgation, and applies to the tax periods of 2026 and 2027.
The decree details the implementation of National Assembly Resolution No. 43/2026/QH16 on CIT and PIT reductions.
Corporate income tax
Under Article 3, CIT payable is reduced by 30% for entities established under Vietnamese law with annual revenue not exceeding VND 10 billion. Eligible entities are:
- enterprises established under Vietnamese law;
- cooperatives and cooperative unions established under the Law on Cooperatives;
- public non-business units; and
- other organisations engaged in production or business activities that generate income.
The reduction applies to total business income in the tax year, regardless of the calculation method. This includes the incomes defined under Clause 3, Article 18 of the Law on Corporate Income Tax. An enterprise that already receives other tax incentives under the CIT law or National Assembly resolutions will have the 30% reduction applied to the net CIT payable after those incentives are deducted.
Revenue comprises revenue from sales of goods and service provision (net of revenue deductions), financial revenue and other income. For an enterprise with dependent units or secondary business locations, total revenue includes that of all dependent branches and locations, as reported on the consolidated annual financial statements. Where a short tax period of less than three months is merged into 2026 or 2027, revenue and the reduction are calculated on a 12-month basis.
The reduction does not apply to enterprises created through corporate division or separation (chia, tách) after Resolution No. 43/2026/QH16 took effect, if the combined total annual revenue of the resulting entities exceeds VND 10 billion.
Enterprises self-determine the reduced amount when making provisional quarterly CIT payments. If actual annual revenue ends up exceeding VND 10 billion, the enterprise must pay back the reduced tax amount along with late payment interest, in accordance with Decree No. 252/2026/NĐ-CP. Supplementary filings, or adjustments made through audits or inspections, that increase CIT payable remain eligible for the 30% reduction if the eligibility criteria are met.
Personal income tax
Article 2 provides a 30% reduction of total PIT payable for tax years 2026 and 2027 arising from production and business activities. It applies to resident individuals engaged in production and business activities, including registered household businesses and authorised representatives of household businesses, with annual revenue not exceeding VND 10 billion in 2026 and 2027. The reduction applies regardless of the method used to calculate PIT.
Annual revenue is determined in accordance with Articles 4 and 5 of Decree No. 68/2026/NĐ-CP, as amended and supplemented by Decree No. 141/2026/NĐ-CP.
Individuals expecting annual revenue of VND 10 billion or less declare the reduction on Form No. 01, submitted with their periodic tax declaration. This may be a quarterly, first six-month, last six-month or annual declaration. Organisations or individuals that withhold, declare or pay tax on behalf of business individuals whose eligible revenue is VND 10 billion or less apply the 30% reduction and declare it on Form No. 02.
If actual total annual revenue exceeds VND 10 billion, the taxpayer is no longer eligible. The taxpayer must declare an adjustment on Form No. 03 and pay the previously reduced tax amount with the return of the period in which revenue exceeded the threshold. No late payment interest is charged up to the filing deadline of that period.
Taxpayers who did not initially claim the reduction may file supplementary returns or claim it during annual tax finalisation. Any overpaid amount may be refunded or offset against future tax liabilities. If adjustments, audits or inspections increase PIT payable, the additional tax is also reduced by 30%, provided the eligibility requirements remain satisfied.
Other provisions
Articles 4 and 5 and the appendix cover implementation and the declaration forms. Form No. 01 is the PIT reduction statement for business households and business individuals. Form No. 02 is the PIT reduction statement for withholding agents and organisations declaring on behalf of individuals. Form No. 03 is the adjustment statement for business individuals whose cumulative actual revenue exceeds the VND 10 billion ceiling.
The Ministry of Finance is assigned to handle matters and issue guidance if obstacles arise during implementation.
