Vietnam’s 30% CIT Reduction for 2026–2027: Eligibility and Proposed Claiming Rules

Vietnam’s Resolution 43/2026/QH16 reduces corporate income tax (CIT) payable by 30 percent for the 2026 and 2027 tax periods for eligible enterprises with annual revenue of VND 10 billion or less. Locally incorporated foreign-invested enterprises may qualify.

Key facts at a glance

What: 30 percent reduction in CIT payable (not the CIT rate)

Who: Companies established under Vietnamese law, including foreign-owned subsidiaries, with annual revenue of VND 10 billion or less

When: The 2026 and 2027 tax years, tested year by year

Legal basis: Resolution 43/2026/QH16, effective from 24 August 2026. The claiming procedures described below are based on the Ministry of Finance consultation draft and remain subject to the final implementing decree.

Incentives: The reduction applies after existing CIT incentives

What Resolution 43 provides

Resolution 43/2026/QH16 is a two-year income tax relief measure for small businesses, adopted by Vietnam’s National Assembly on 24 August 2026. It took effect immediately but applies to the full 2026 and 2027 tax periods, so qualifying companies benefit for their whole 2026 tax period, not only from August.

The resolution has two parts:

• Corporate income tax: A 30 percent reduction in CIT payable for enterprises and organisations established under Vietnamese law whose annual revenue does not exceed VND 10 billion.
• Personal income tax (PIT): A 30 percent reduction in PIT payable on business income for resident individuals and household businesses under the same revenue threshold. This does not cover salaries or wages.

It is important to be precise about what is being cut. The measure does not lower Vietnam’s statutory CIT rate (20 percent standard, with 15 percent and 17 percent rates for qualifying smaller businesses under the 2025 CIT framework). It reduces the final tax bill a qualifying company would pay by 30 percent.

Who qualifies for the 30 percent CIT reduction

An enterprise must meet two conditions:

• It is established under Vietnamese law: This includes locally incorporated companies, such as foreign-invested limited liability companies and joint stock companies holding an Enterprise Registration Certificate.
• Its annual revenue in the relevant year does not exceed VND 10 billion: Eligibility is tested separately for 2026 and for 2027, based on actual revenue for the full tax year.

What this means for foreign investors

Foreign ownership is not an express exclusion under Resolution 43. A locally incorporated foreign-invested enterprise may qualify if it meets the revenue condition and other applicable requirements. The resolution does not impose a general subsidiary exclusion. Separate subsidiary and related-enterprise restrictions may, however, affect eligibility for the 15 and 17 percent CIT rates and the VND 1 billion exemption described below.

Foreign contractors established outside Vietnam and taxed under the foreign contractor tax regime do not fall within the stated category of enterprises established under Vietnamese law. Representative offices generally do not conduct revenue-generating business and do not ordinarily have CIT liabilities. Branches of foreign companies should confirm their treatment under the final implementing rules.

The VND 10 billion threshold

The threshold is a hard line. A company with VND 9.9 billion in revenue receives the full reduction, while one with VND 10.1 billion receives none. Businesses close to the threshold should forecast full-year revenue carefully, especially where year-end invoicing or contract timing could push them over.

How the reduction is calculated

The 30 percent reduction is applied last, to the CIT a company would otherwise pay:

• Calculate taxable income and apply the applicable CIT rate, including any preferential rate the company is entitled to;
• Apply any CIT exemptions or reductions the company already enjoys; and
• Reduce the remaining CIT payable by 30 percent.

Because the reduction stacks on existing incentives rather than replacing them, companies already enjoying incentives can still benefit, provided some CIT remains payable after those incentives. A company in a full CIT exemption period has no remaining liability to reduce.

Exclusions and other small business relief

The resolution blocks one obvious way of gaming the threshold. Enterprises formed by dividing or splitting an existing company after 24 August 2026 do not qualify if the combined 2026 or 2027 revenue of the new entities exceeds VND 10 billion.

Foreign groups should review this rule when planning restructurings in Vietnam. Dividing an existing company into smaller entities does not secure relief where the resulting enterprises fall within the combined revenue exclusion.

The relief also sits alongside, not instead of, existing small-business rules. Under Decree 320/2025/ND-CP, as amended by Decree 141/2026/ND-CP, enterprises with annual revenue of VND 1 billion or less are exempt from CIT, but it is subject to separate revenue and related-enterprise conditions. Revenue is generally tested on the preceding year, with separate rules for new businesses and short tax periods, and the exemption does not apply to subsidiaries or related enterprises where the associated enterprise itself does not meet the conditions. Foreign-invested companies, many of which are subsidiaries of a foreign parent, should check this carefully. So, the 30 percent reduction matters most to businesses between VND 1 billion and VND 10 billion, and to smaller companies that do not qualify for the exemption.

Proposed procedures for claiming the reduction

The procedures outlined below are based on the Ministry of Finance’s consultation draft, as summarised on the Vietnamese Government’s official news portal on 11 September 2026. These proposals remain subject to the final implementing decree. Businesses should verify the applicable implementing rules and tax authority guidance before applying the reduction to provisional CIT payments.

Under the draft decree:

• Revenue definition: The draft includes revenue from sales of goods and services, net of revenue deductions, financial revenue and other income. Revenue also includes dependent units and business locations shown in the enterprise’s combined annual financial statements.
• Combined short tax periods: Where a first or final tax period shorter than three months is combined with a 2026 or 2027 tax period, the draft would determine revenue and the reduction for the relevant 12 months of the 2026 or 2027 period. New businesses and companies undergoing restructuring should check this special rule.
• Self-assessment in provisional payments: Companies projecting 2026 or 2027 revenue of VND 10 billion or less can apply the 30 percent reduction themselves when calculating quarterly provisional CIT.
• Year-end test: Eligibility is confirmed on actual full-year revenue at annual CIT finalisation. A company that exceeds the threshold must pay back the reduction it applied during the year. Under the draft, late-payment interest would follow the general rule for provisional payments, which charges interest where the four quarterly payments total less than 80 percent of the final CIT liability.
• Amended returns and audits: Where a company files a supplementary return, or the authorities assess additional CIT after an inspection or audit, the additional amount also qualifies for the 30 percent reduction if all conditions are met.

Because the resolution covers the full 2026 tax period, provisional payments already made for Q1 and Q2 are taken into account when determining the annual balance payable or any overpayment. The final implementing rules should be checked for the detailed claiming procedure. Decree 252/2026/ND-CP provides the general tax administration framework. 

Note: This article is for general information only; enterprises are recommended to check the original legal texts and their provincial notices before filing or seek professional advisory support.