The decree provides a 30% reduction in personal income tax for household businesses and a 30% reduction in corporate income tax for enterprises with annual revenues of no more than 10 billion VND (approximately 400,000 USD) in 2026 and 2027. Enterprises whose annual revenues exceed that amount will no longer qualify for the tax incentive and must repay any tax previously reduced. Taxpayers are responsible for calculating the reduction when making quarterly tax payments or filing tax returns for the relevant period.
Nghiem Manh Cung, a household business owner in Hanoi, said: “The decree will give us some additional capital for our businesses. This is very welcome news and a source of encouragement for small household businesses like ours. The Government has introduced this policy, and we will fulfill our tax declaration obligations.”
Nguyen Trong Ninh, Chairman of the Board of VIC Group Media and Entertainment Company, said the 30% reduction in tax payable over a 2-year period will improve cash flow, help maintain operations, and allow businesses to invest in growth.
“A few tens of millions of dong may not be a large amount, but it’s important for two reasons. First, it shows the Government's concern for small businesses. Second, it gives businesses additional financial leverage to invest in their own operations and generate revenue for future growth. This is extremely important,” Mr. Ninh said.
According to the Ministry of Finance, the 30% tax reduction is designed to support the vast majority of household businesses and small enterprises. It’s estimated that up to 99.98% of household businesses and around 81.11% of other enterprises will qualify for the incentive.
Nguyen Van Phung of the Vietnam Association of Accountants and Auditors, said: “The decree reflects the Government's strong commitment to supporting and sharing the burden of businesses in the private sector. Although a 30% tax reduction may not amount to a large sum, the actual benefit depends on each household business's performance. If a household business earns less than 4,000 USD in revenue and performs well, it will receive a good tax reduction. The measure also gives businesses an opportunity to lower prices for the consumer. This is the broader social significance of the tax cut.”
The 30% tax reduction is expected to reduce state budget revenue by approximately 260 million USD in 2026 and 2027, but will help millions of household businesses and small enterprises lower their costs and have a better chance to grow.
