Vietnam Abolishes Business License Tax from 2026

Vietnam has officially abolished the business license tax (BLT), effective January 1, 2026. This change is part of broader regulatory reforms aimed at reducing compliance costs, simplifying the business environment, and promoting private-sector growth. 

BLT was an indirect tax levied annually on businesses operating in Vietnam. Under this tax regime, enterprises were required to pay between VND 2 million and VND 3 million (US$80-120), while household businesses paid from VND 300,000 to VND 1 million (US$12-40) upon establishment and throughout their operations.

The tax was determined by factors such as charter capital, investment capital, or revenue, regardless of whether the business was profitable or not.

Tax authority guidance

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The abolition of the BLT is anchored in Resolution No. 198/2025/QH15 on special mechanisms and policies to promote private-sector development, which expressly provides that the collection and payment of the business license fee shall cease from January 1, 2026.

In alignment with this resolution, Decree No. 362/2025/ND-CP repeals the previous regulatory framework, specifically Decree No. 139/2016/ND-CP and its amendment Decree No. 22/2020/ND-CP, that governed BLT collection.

On January 24, 2026, the Taxation Department under the Ministry of Finance issued Official Letter No. 645/CT-CS (“OL 645”), directing provincial and city tax authorities to disseminate information on the abolition and ensure uniform implementation of the new rules.

OL 645 instructs tax offices to review and apply tax management measures to collect outstanding business license fees due for the years 2025 and earlier.

Who is affected?

From January 1, 2026, onward:

• Enterprises, cooperatives, public service units engaged in business activities, household businesses, and individual business operators are no longer required to pay BLT.
• Taxpayers are also exempt from submitting BLT declarations for 2026 and subsequent years.

Under the previous regime, the tax was calculated annually based on charter capital, investment capital, or revenue, regardless of whether a business made a profit or loss.

Policy rationale and business impact

Although the BLT usually imposed a modest compliance cost, removing it is viewed as a significant reduction in regulatory burden, especially for micro, small, and medium-sized businesses, as well as newly established companies.

The policy aligns with Vietnam’s ongoing efforts to simplify administrative procedures, lower entry barriers for business formation, and encourage private-sector dynamism. Abolishing the tax enables businesses to retain more working capital and reduces the number of routine declarations and payments, contributing to a more streamlined operating environment.

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