Corporate income tax exemption opportunities for small businesses in Vietnam have received a significant boost in 2026. To foster the recovery and sustainable growth of small-scale economic units, the Government officially issued Decree No. 141/2026/NĐ-CP on April 29, 2026, introducing a highly practical financial support policy. Under this new regulation, enterprises and business households with an annual revenue of less than 1 billion VND are entitled to a full exemption from Corporate Income Tax (CIT).
This policy serves as a vital catalyst, not only reducing operational burdens but also providing a golden opportunity for business owners to reinvest and scale their operations. In this article, we will provide a detailed analysis of this new regulation, outline the eligibility criteria, and explore other Corporate Income Tax (CIT) incentives currently available to businesses in Vietnam.
1. What Is the Corporate Income Tax Exemption for Businesses Under 1Billion VND?
The fiscal strategy for 2026 places a strong emphasis on supporting small-scale economic units. On April 29, 2026, the Government officially issued Decree No. 141/2026/NĐ-CP, which introduces significant tax relief measures. This policy supplements Clause 15, Article 4 of Decree No. 320/2025/NĐ-CP, establishing a legal framework for Corporate Income Tax (CIT) exemption for enterprises and organizations with an annual revenue threshold of 1 billion VND or less.
The Core Policy Explained
The regulation provides a clear mechanism for determining eligibility and handling operational variations. Key components of the policy include:
- Revenue Determination: The annual total revenue used as the basis for the exemption includes revenue from the sale of goods and provision of services (excluding deductions), financial activity income, and other income recorded in the Appendix of Production and Business Performance Results from the preceding tax period.
- Pro-rata Calculation: For businesses operating for less than 12 months in the preceding year, revenue is annualized by dividing actual revenue by the number of months in operation and multiplying by 12.
- Exemption for New Establishments: Newly established businesses in the current tax period with projected revenue not exceeding 1 billion VND are not required to make provisional CIT payments. If the actual revenue eventually exceeds the 1 billion VND threshold by the end of the tax period, the enterprise must declare and finalize the tax accordingly, without being subject to late payment penalties.
- The Anti-Avoidance Clause: To maintain fiscal integrity, this exemption is strictly not applicable to subsidiaries or enterprises with affiliated relationships if the related business units in the network fail to meet the qualifying conditions specified in this Decree.
2. Who Qualifies for This Tax Exemption?
Determining whether your business falls under the scope of Decree No. 141/2026/NĐ-CP is essential for accurate tax planning. The policy is designed to support micro and small-scale operations; however, eligibility is contingent upon meeting specific operational and structural criteria.
The following table provides a quick reference to help you self-assess your business’s eligibility:
| Entity Category | Eligibility Status | Key Requirement |
| Small Enterprises | Eligible | Annual revenue ≤ 1 billion VND |
| Registered Household Businesses | Eligible | Annual revenue ≤ 1 billion VND |
| Newly Established Entities | Eligible (Conditional) | Projected revenue ≤ 1 billion VND |
| Subsidiary Companies | Excluded | Depends on Parent Company’s revenue status |
| Affiliated Enterprises | Excluded | If the affiliated network exceeds 1 billion VND |
Small Businesses & Household Businesses
For the purposes of this exemption, “Small Businesses” include entities registered under the Law on Enterprises that maintain a modest operational footprint. Similarly, “Household Businesses” (Hộ kinh doanh) are eligible provided their annual revenue—comprising sales, services, financial income, and other miscellaneous income—remains below the 1-billion VND threshold. To ensure full compliance, businesses must maintain transparent accounting records, as the tax authority relies on the Appendix of Production and Business Performance Results from the preceding tax period to verify your eligibility.
Crucial Warning: The Subsidiary Exception
A common pitfall for many businesses is failing to account for the “Affiliated Relationship” clause. Per the stipulations in Decree 141/2026/NĐ-CP, the tax exemption is not applicable to any enterprise that acts as a subsidiary or is part of a larger business network (affiliated relationship) if the other entities within that network do not meet the exemption criteria.
In essence, if your parent company or a related entity reports a total revenue exceeding 1 billion VND, your business is disqualified from claiming this tax exemption, regardless of how low your own individual revenue may be. We strongly advise conducting a thorough audit of your corporate ownership structure before declaring yourself exempt.
3. Additional Corporate Income Tax Incentives in 2026
3.1 Corporate Income Tax Rates: Standard vs. Preferential
While the standard corporate income tax rate remains fixed at 20%, Vietnam’s 2026 fiscal framework provides a sophisticated, tiered structure designed to lower the entry barriers for SMEs and encourage sustainable investment. For strategic tax planning, it is crucial to understand that these rates are not “one size fits all” but are instead tiered based on annual revenue, reflecting the government’s support for business scaling.
- 15% CIT Rate (Micro-Enterprise Support): This rate is specifically intended for enterprises with annual revenue of VND 3 billion or less. It acts as a primary fiscal cushion, allowing micro-enterprises to preserve cash flow during their early development or stabilization phase.
- 17% CIT Rate (Growth-Oriented Support): Aimed at mid-sized businesses with annual revenue exceeding VND 3 billion up to VND 50 billion, this rate balances tax relief with the transition toward full-scale compliance, supporting businesses as they expand their operational footprint.
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3.2 Specialized Tax Determination
In specific cases where the determination of actual costs and expenses is challenging—such as for certain foreign-owned enterprises or cooperatives—a direct tax rate on revenue may be applied. This mechanism ensures that businesses remain compliant without being hindered by overly burdensome accounting requirements for expense documentation.
3.3 Additional Location-Based and Sectoral Incentives
- Location-Based Incentives: Businesses operating in designated Economic Zones, industrial parks, or underdeveloped provinces often benefit from extended tax holidays and additional reductions.
- Priority Sectors: High-tech projects and priority sectors may qualify for even further reduced CIT rates (e.g., 10%) for specified periods.
- R&D Deductions: Businesses investing in local technology development can claim additional deductions on taxable income, further reducing the overall effective tax rate.
>> Reference:
Tax Incentive in Vietnam 2025: Comprehensive Guide to Optimize Profits under New CIT Law
4. Handling Temporarily Paid CIT in Q1 2026
If your enterprise temporarily paid CIT for the first quarter of 2026 before the policy’s full implementation was processed, you are entitled to recover these funds. Follow these steps:
- Audit: Confirm the amount paid in Q1 2026 against your actual annual revenue projection.
- Declaration: Adjust your quarterly CIT declaration form to reflect the exempt status.
- Offset/Refund: Contact your local tax office to request a tax offset (applying the overpaid amount to other obligations like PIT or VAT) or a formal tax refund according to the Law on Tax Administration.
5. Maximize Your Tax Benefits with Vina TPT
Navigating the complexities of Vietnamese tax law—especially for FDI businesses and SMEs with intricate ownership structures—is a task that requires professional expertise. A minor error in interpreting revenue thresholds or subsidiary relationships can lead to significant penalties.
At Vina TPT, we provide end-to-end accounting and tax advisory services tailored to your business model. We ensure that you not only remain 100% compliant with the latest 2026 regulations but also identify every legal opportunity to optimize your tax position.
Contact Vina TPT today to schedule a consultation and let our experts secure your financial advantage in the current market.