Lawmakers officially approved a Resolution to reduce personal and corporate income taxes for individuals and businesses on the final day of the first extraordinary session of the 16th National Assembly on August 24.
Under the approved Resolution, a 30% reduction in personal income tax will be granted for the 2026 and 2027 tax periods to resident individuals with business income, provided their annual revenue in those years does not exceed VND10 billion ($380,000).
The Resolution is set to take effect on August 24, 2026, and will be applicable for the 2026 and 2027 tax years.
For enterprises and organizations established under Vietnamese laws with an annual revenue of no more than VND10 billion in 2026 and 2027, a 30% corporate income tax reduction will also apply. This incentive, however, does not extend to businesses formed through the division or separation of existing companies after the Resolution's effective date.
Presenting the report on the explanation and revision of the draft Resolution, Minister of Finance Ngo Van Tuan stated that the VND10-billion threshold was selected to focus the policy on individuals, household businesses, and micro-to-small enterprises. With this revenue threshold, approximately 99.86% of individuals and household businesses and over 81.11% of enterprises will be eligible for the tax reduction.
The Minister noted that the threshold is consistent with the criteria for identifying micro-enterprises in the trade and service sectors as defined in the Law on Support for Small and Medium-Sized Enterprises and Decree No. 80/2021/ND-CP.
He further explained that individuals, household businesses, and companies with annual revenue under VND10 billion account for a significant proportion of the economy. At the same time, this group typically possesses limited resilience and is more susceptible to the adverse impacts of production and business challenges.
Regarding the 30% reduction rate, the Minister said it provides meaningful support to taxpayers while still ensuring national budget balance. This reduction is also consistent with several previous tax support policies approved by the NA or its Standing Committee.
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