Quick answer: Under the Vietnam CIT reduction 2026 rules, Vietnam is cutting corporate income tax (CIT) payable by 30% for the 2026 and 2027 tax years for companies whose annual revenue is VND 10 billion or less. The rule comes from Resolution 43/2026/QH16 of the National Assembly (effective 24 August 2026) and is detailed in Decree 398/2026/ND-CP (effective 29 October 2026). Foreign-invested companies established in Vietnam qualify on the same terms as local companies. The reduction can be applied in quarterly provisional payments, but if actual revenue for the year ends up above VND 10 billion, the reduced tax must be paid back.
What is the Vietnam CIT reduction 2026?
In August 2026 the National Assembly adopted Resolution 43/2026/QH16 to reduce personal income tax and corporate income tax for small businesses. For companies, the resolution gives a 30% reduction of the CIT payable in the 2026 and 2027 tax periods. The Government then issued Decree 398/2026/ND-CP to explain who qualifies, how revenue is measured and how the reduction is declared.
| Item | Rule |
|---|---|
| Legal basis | Resolution 43/2026/QH16 (adopted and effective 24/08/2026); Decree 398/2026/ND-CP (effective 29/10/2026) |
| Tax years covered | 2026 and 2027 |
| Reduction | 30% of CIT payable for the tax year |
| Revenue threshold | Annual revenue not exceeding VND 10 billion, tested separately for 2026 and for 2027 |
| Taxes not covered | VAT and other taxes are not reduced |
For the general CIT framework (rates, taxable income, deductible expenses), see our guide to corporate income tax in Vietnam.
Who qualifies for the 30% reduction?
The reduction applies to:
- Enterprises established under Vietnamese law, including foreign-invested companies (FDI companies) holding an Enterprise Registration Certificate in Vietnam;
- Cooperatives and unions of cooperatives;
- Public service units and other organisations established under Vietnamese law that earn taxable income from business activities.
The key condition is revenue. The company’s total revenue for the year must not exceed VND 10 billion. The test is applied to each year on its own: a company can qualify for 2026 and not for 2027, or the other way round.
Exclusion for companies created by a split
Companies formed by a division or separation (chia, tách) after Resolution 43 took effect do not qualify if the combined 2026 or 2027 revenue of all the companies formed from the original one exceeds VND 10 billion. This prevents a larger business from splitting itself just to fall under the threshold.
How is the VND 10 billion revenue measured?
According to Decree 398/2026/ND-CP, revenue for the threshold is broader than sales alone. It includes:
- Revenue from sales of goods and services, after revenue deductions;
- Financial income (for example, interest and foreign exchange gains);
- Other income.
Revenue of dependent units and business locations is included, based on the company’s annual financial statements. For a new company whose first tax period is shorter than three months, or a company in its final period (conversion, merger, split, dissolution or bankruptcy) of less than three months, revenue and the reduction are determined on a 12-month basis.
For many foreign-invested companies this is the point to check carefully. Intercompany service fees, interest on deposits and exchange gains on foreign-currency balances all count towards the VND 10 billion, so a company with modest sales can still be over the threshold.
How is the reduction calculated?
The reduction is 30% of the CIT payable for the whole tax year. If your company already enjoys a CIT incentive (a preferential rate, exemption or reduction under the CIT Law), the 30% is applied after deducting that incentive. A company in a full CIT exemption period therefore has nothing left to reduce. You can read more about the incentive rules in our article on tax incentives in Vietnam.
Example: a company’s CIT payable for 2026 is VND 100 million. With the 30% reduction it pays VND 70 million. If it had already made provisional payments of VND 60 million during the year, it pays VND 10 million more at finalisation. If it had paid VND 90 million, the VND 20 million overpaid is handled under the tax administration rules.
How to declare the reduction
Quarterly provisional payments
A company that expects its 2026 (or 2027) revenue to stay within VND 10 billion may work out the reduction itself when it makes its quarterly provisional CIT payments. The reduction is not paid back automatically for quarters already paid: what matters is the final tax for the year after the reduction, compared with what was prepaid.
Annual CIT finalisation
The reduction is confirmed in the annual CIT finalisation for 2026 (and later for 2027), based on actual revenue. For FDI companies this usually happens together with the audited financial statements, so the revenue figure used must match the audited accounts.
If revenue ends up above VND 10 billion
If actual revenue for the year exceeds VND 10 billion, the company is not entitled to the reduction. It must declare and pay CIT in full, pay the difference, and late-payment interest may apply under the tax administration rules. Companies close to the threshold should therefore be cautious about applying the reduction to provisional payments.
Why this matters for small FDI companies
Many foreign-invested companies in Ho Chi Minh City are trading, consulting and service businesses with annual revenue well under VND 10 billion. For them, the reduction is a real saving in 2026 and 2027, but only if the revenue figure is right and the reduction is declared consistently in provisional payments and in the finalisation return. A mistake usually shows up at year-end, when the audited revenue differs from the estimate, and the company has to pay back tax with interest. Planning the estimate now, before the 2026 books are closed, avoids that surprise.
Checklist for foreign-invested companies
- Estimate full-year 2026 revenue, including financial income and other income, not just sales.
- Check whether any CIT incentive applies first, and calculate the 30% on the tax left after it.
- Decide whether to apply the reduction in provisional payments or wait for finalisation.
- Make sure your accounting records and invoices support the revenue figure (see our note on Decree 254/2026 e-invoice rules).
- Explain the reduction to your parent company and auditors before year-end closing.
Frequently asked questions
Does the 30% CIT reduction apply to foreign-invested companies?
Yes. The reduction applies to enterprises established under Vietnamese law, which includes companies with foreign ownership, as long as their annual revenue is VND 10 billion or less.
Does the reduction apply to VAT?
No. Only CIT (and, for individuals and household businesses, personal income tax on business income) is reduced. VAT is not covered.
Can a company with CIT incentives also get the 30% reduction?
Yes. The 30% is calculated on the CIT payable after the existing incentive has been deducted.
Which years does it cover?
The 2026 and 2027 tax periods. The revenue test is applied separately for each year.
What if our revenue goes above VND 10 billion at year-end?
The reduction no longer applies. The company must pay the full CIT for the year, and late-payment interest may arise on the amount underpaid.
Need help applying the CIT reduction correctly?
Informly helps foreign-invested companies in Ho Chi Minh City with bookkeeping, quarterly CIT, year-end finalisation and financial statements. We can check whether your company qualifies for the 30% reduction for 2026 and how to declare it. Learn more about our accounting services in Vietnam or contact us for a compliance check.
Legal basis: Resolution 43/2026/QH16 of the National Assembly dated 24/08/2026 (effective 24/08/2026); Decree 398/2026/ND-CP of the Government (effective 29/10/2026). This article is general information, not tax advice for a specific case.
