- Vietnam proposes a 30 percent income tax cut for small businesses and individual owners for 2026 and 2027.
- The tax relief targets entities with annual revenue up to 10 billion Vietnamese dong to support micro-enterprises.
- Lawmakers will consider the proposal during the October 2026 sitting of the National Assembly for final approval.
Vietnam’s Ministry of Finance has proposed a 30% income tax cut for household businesses, individual business owners and small enterprises with annual revenue up to VND 10 billion. The measure would cover the 2026 and 2027 tax years if lawmakers approve it.
Household businesses and individual operators would receive a 30% reduction in personal income tax. Micro-enterprises and small companies would receive the same reduction in corporate income tax. The two categories would follow separate tax treatments under the draft.
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The ministry released the proposal for public consultation on August 7, 2026. Government reporting on August 8–10 described it as part of planned amendments to the Law on Support for Small- and Medium-Sized Enterprises.
The Government plans to submit the amendments to the National Assembly at its second sitting in October 2026. The proposal remains subject to legislative consideration.
The draft focuses mainly on micro-enterprises. It defines them as businesses with fewer than 10 employees covered by social insurance, alongside additional capital and revenue conditions that vary by sector.
The Government also plans to expand access to the simplified tax method for household and individual businesses. The proposed change would raise the relevant annual revenue threshold from VND 3 billion to the new ceiling.
The Ministry of Finance estimates that the tax relief would reduce budget revenue by more than VND 6,700 billion if implemented. The reported dollar equivalent of the revenue limit ranges from approximately US$381,621 to US$384,000, depending on the exchange rate used.
Sector rules would determine which businesses qualify
The draft applies different financial limits to businesses in production-related sectors and those in trade or services:
| Business sector | Maximum capital | Maximum annual revenue |
|---|---|---|
| Agriculture, forestry, fisheries, manufacturing and construction | VND 3 billion | VND 3 billion |
| Trade and services | Not specified in the research | VND 10 billion |
The employee test also remains part of the proposed definition. A business would need fewer than 10 employees covered by social insurance, in addition to meeting the applicable capital and revenue conditions.
The relief would therefore distinguish between the type of taxpayer and the activity generating revenue. An individual business owner would claim the personal income tax reduction, while an eligible company would use the corporate income tax reduction.
The proposal is intended for the 2026 and 2027 tax years. Its resolution would take effect on the date of National Assembly adoption, if approved, rather than automatically on the date of the consultation release.
The government’s planned changes connect the tax reduction with a broader adjustment to the treatment of smaller operators. Raising the simplified-method threshold would allow businesses with higher annual revenue to remain within that framework, subject to the final law and implementing rules.
National Assembly consideration in October 2026 is the next stated legislative milestone. The size of the final relief and its eligibility rules will depend on the text adopted by lawmakers.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
