The Ministry of Finance is seeking public feedback on a draft decree that guides National Assembly Resolution 43/2026. This resolution outlines personal and corporate income tax reductions for the two-year period spanning 2026-2027.
Under the draft, business households and individuals with annual revenue not exceeding 10 billion VND will receive a 30% reduction in personal income tax. This reduction applies to all income generated from production and business activities, irrespective of the tax calculation method.
Business owners can self-assess their projected annual revenue for 2026 and 2027 to apply this preferential reduction directly to their quarterly or annual tax declarations. This approach eliminates the need to wait for year-end finalization.
For cases involving proxy tax payments, the withholding party will also receive a corresponding 30% reduction in monthly or quarterly income tax. This regulation extends to e-commerce and digital platforms currently remitting taxes on behalf of sellers.
At year-end, business households and individuals must reconcile their actual total revenue. If their revenue does not exceed 10 billion VND, they retain the reduced tax amount. Should revenue surpass the preferential threshold, taxpayers may need to file an adjusted declaration and pay the difference, but they will not incur late payment penalties. Any overpayment is expected to be offset in a subsequent period or refunded.
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Cash transaction at a bank. *Photo: Giang Huy* |
For corporate income tax, the 30% reduction applies to businesses, cooperatives, and public service units with annual revenue below 10 billion VND. The reduced tax amount is calculated on total annual income, regardless of the tax calculation method. If a business already benefits from other tax incentives, the 30% reduction is applied to the remaining tax payable after accounting for those existing incentives.
Businesses are expected to self-determine the reduction when making quarterly corporate income tax provisional payments, instead of waiting for year-end finalization. The 10 billion VND revenue threshold for eligibility is the total annual income, including sales and services, before any deductions. For businesses with branches or dependent business locations, this revenue level is calculated based on the consolidated financial statements.
If actual annual revenue exceeds 10 billion VND, businesses must pay the full outstanding tax amount. Late payment penalties will be calculated according to tax administration regulations.
Previously, the Ministry of Finance estimated that this tax reduction policy would result in a budget revenue shortfall of approximately 6,700 billion VND over two years. Around 99,86% of individuals and business households, and 81,1% of businesses, are expected to benefit from this tax reduction policy with the 10 billion VND revenue threshold.
Phuong Dung
