To support the growth of small and medium-sized enterprises (SMEs), the National Assembly and the Government have introduced several new Corporate Income Tax (CIT) incentives effective from 2026.
In addition to existing tax incentives based on business sectors and investment locations, eligible enterprises may benefit from additional tax incentives determined by their annual revenue level.
The standard CIT rate in Vietnam remains 20%. However, qualifying enterprises may be entitled to one of the incentive schemes summarized below.
| Annual Revenue Threshold | CIT Incentive | Legal Basis | Exceptions |
|---|---|---|---|
| Newly established SMEs | 100% exemption for the first 3 years from the date of issuance of the Enterprise Registration Certificate. | Decree No. 20/2026/ND-CP; Resolution No. 198/2025/QH15 |
Companies established through merger, consolidation, division or demerger. Companies where the legal representative, partner or largest shareholder/member has carried out the similar position in another enterprises that is still operating or was dissolved less than 12 months before the new enterprise was established (except where the legal representative is not an investor). |
| Up to VND 1 billion | 100% CIT exemption for the next year | Clause 15, Article 4 of Decree No. 320/2025/ND-CP, as amended by Decree No. 141/2026/ND-CP | Not applicable to subsidiaries or related-party enterprises where any related party is ineligible for the exemption. |
| Above VND 1 billion and up to 3 billion | 15% CIT rate applied for the next year | Clause 2, Article 11 of Decree No. 320/2025/ND-CP | |
| Above VND 3 billion and up 50 billion | 17% CIT rate applied for the next year | Decree No. 320/2025/ND-CP |
In summary: The new CIT incentive regime effective from 2026 offers significant tax benefits for SMEs, ranging from a 3-year CIT exemption for newly established enterprises, a 100% CIT exemption for companies with annual revenue not exceeding VND 1 billion, to preferential CIT rates of 15% and 17% for qualifying businesses.
SMEs should regularly monitor their revenue levels and ownership structure to determine their eligibility and maximize the available tax incentives while ensuring compliance with the applicable regulations.
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