Corporate Income Tax Incentives for SMEs in Vietnam | Update 2026
Vietnam continues to strengthen its support for small and medium-sized enterprises (SMEs) through targeted Corporate Income Tax (CIT) incentives, in particular:
- The 3-year CIT exemption for newly established enterprises, and
- The 30% reduction in CIT payable applicable for the 2026 and 2027 tax periods
3-YEAR CIT EXEMPTION FOR NEWLY ESTABLISHED ENTITY
Effective 17 May 2025, under Vietnam’s SME support regulations, a newly established Vietnam-based enterprise may qualify for a 3-year Corporate Income Tax (CIT) exemption, provided it satisfies the following conditions:
- Entities legally established under Vietnamese laws, satisfy the SME conditions (*) in terms of employee, registered capital or revenue.
- The management team and Legal Representative must not have held key roles in any business that ceased operations within the preceding 12 months (anti-abuse measure against liquidate-and-re-establish solely to claim tax benefits)
- The enterprise must be incorporated as a genuinely new legal entity after 17 May 2025, not formed through division, spin-off, merger, name change, or restructuring of an existing enterprise.
(*) Refer to table “SME conditions clarification” for clarification
Notice:
The 3-year exemption runs continuously from the issuance date of the Enterprise Registration Certificate (ERC) – regardless of when the business actually commences operations, generates revenue, or earns taxable income.
Investors should plan capital contribution, construction, and operational launch carefully to avoid forfeiting exempt time before the business becomes active.
This incentive is not applied automatically. Enterprises are responsible for self-assessing their eligibility and proactively submitting the required tax incentive appendix together with the annual CIT finalization return.
30% REDUCTION IN CIT PAYABLE APPLICABLE TO TAX YEAR 2026-2027
The Vietnamese Government has introduced a 30% reduction in CIT payable for the 2026 and 2027 tax periods. This relief applies to:
- All enterprises and organizations established under Vietnamese law; and
- Annual revenue of VND 10 billion (equivalent to USD 385,000) or less in each respective year
Notice:
The 30% reduction applies to the net tax payable remaining after all location- or sector-based incentives have been fully deducted.
The taxpayer self-determine & make provisional payments quarterly, then undertake CIT finalization at year-ending.
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