Vietnam Revises Tax Framework: Key Changes to PIT, VAT, CIT, and SCT

Vietnam has recently amended four key tax laws. The changes introduce revenue-based tax exemptions for small businesses and give the government flexibility to adjust thresholds based on economic conditions.

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On April 24, 2026, Vietnam’s National Assembly passed a new law amending provisions across major tax frameworks, including personal income tax (PIT), value-added tax (VAT), corporate income tax (CIT), and special consumption tax (SCT).

The law takes effect immediately upon adoption, with key provisions under Articles 1, 2, and 3, covering PIT, VAT, and CIT, applied retroactively from January 1, 2026.

The amendments introduce a more flexible, threshold-based approach to taxation for small businesses, while also refining sector-specific tax policies such as electric vehicle incentives.

Introduction of revenue-based tax exemption thresholds

A central reform across PIT, VAT, and CIT is the introduction of government-adjustable annual revenue thresholds, below which certain taxpayers may be exempt from tax obligations.

The government is authorized to determine these thresholds based on macroeconomic conditions and fiscal capacity, allowing policy flexibility over time.

Corporate income tax: Alignment with existing tax brackets

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Complying with Vietnam’s corporate tax obligations while optimizing tax outcomes

The amendments interact with Vietnam’s existing CIT framework, which applies differentiated tax rates based on revenue levels:

• 15 percent for enterprises with annual revenue not exceeding VND 3 billion (approximately US$113,000);
• 17 percent for enterprises with annual revenue between VND 3 billion and VND 50 billion (approximately US$1.9 million).

To maintain consistency across tax laws, the government’s authority to set exemption thresholds is effectively capped below VND 3 billion. Any adjustment beyond this level would require further legislative approval by the National Assembly.

This ensures alignment between exemption policies and existing progressive tax structures.

See also: Updated CIT Compliance in Vietnam: Key Provisions of Decree 320/2025

VAT and PIT: Expanding relief for small businesses

The revised VAT and PIT provisions extend tax relief to household businesses and individual entrepreneurs, a segment that accounts for a significant share of Vietnam’s informal and semi-formal economy.

By linking tax obligations to revenue thresholds rather than fixed criteria, the law enables more responsive policy adjustments in line with economic conditions.

See also: Vietnam’s New VAT Law in 2026: Key Compliance Guidance

Special consumption tax: Updated incentives for electric vehicles

The law also revises SCT rates applicable to battery electric vehicles (BEVs) with fewer than 24 seats, maintaining preferential tax treatment while setting a long-term roadmap for gradual increases.

This staged approach continues to support EV adoption in the short term while signaling a gradual normalization of tax rates over time.

See also: Preparing for Vietnam’s Special Consumption Tax Changes in 2026: Key Compliance Highlights

Implementation timeline and next steps

While the law is effective immediately from April 24, 2026, the core provisions on PIT, VAT, and CIT exemptions apply from January 1, 2026.

The Ministry of Finance has been tasked with issuing implementing guidance, including a decree specifying the applicable revenue threshold, currently proposed at VND 1 billion per year, subject to final approval.

What to do next

With the law already in effect and key provisions applied from January 1, 2026, businesses should take a targeted approach to compliance:

• Assess eligibility for tax exemptions: Review whether revenue falls below the forthcoming government threshold for PIT, VAT, and CIT.
• Monitor implementing guidance: Track the final decree on revenue thresholds (expected around VND 1 billion) and adjust tax planning accordingly.
• Align with CIT brackets: Ensure revenue reporting remains consistent with existing 15 and 17 percent CIT tiers.
• Update compliance systems: Verify VAT applicability, business classification, and internal reporting to avoid misclassification risks.
• Review sector impact: Automotive and EV firms should assess changes to SCT incentives and VAT treatment across supply chains.

Early alignment will help businesses capture available tax relief while avoiding compliance gaps.

Outlook

Vietnam’s latest tax amendments underscore a pragmatic approach to fiscal policy, targeting relief where it is most impactful while preserving the integrity of the tax base.

As implementing regulations are finalized, businesses should monitor threshold levels and assess eligibility for exemptions, particularly in sectors with significant SME participation or evolving tax incentives such as electric mobility.

Managing tax in Vietnam is critical for FDI companies to stay compliant with local regulations, GST requirements, and global standards such as IFRS, navigate complex filings, and apply correct tax treatments. A well-structured tax process helps to avoid penalties and stay 100% compliant.

Luy Doan

Assistant Manager, Tax

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