On August 24, 2026, at the First Extraordinary Session, the XVIth National Assembly officially passed Resolution No. 43/2026/QH16 on personal income tax (PIT) and corporate income tax (CIT) reduction policies for specific individuals and businesses, regulating a 30% reduction of PIT and CIT. The Resolution takes effect immediately from the date of passage and is directly applied to the tax periods of 2026 and 2027.
The following article by LawPlus will quickly analyze the eligibility conditions and rules for cumulative incentives so that your business can proactively apply them accurately, safely, and in accordance with the law
1. Applicable Subjects and Revenue Condition of Under 10 Billion VND.
Pursuant to Article 1 of Resolution No. 43/2026/QH16, the 30% tax reduction policy applies to target groups that meet the specified revenue threshold:
- Resident individuals with business activities: Entitled to a 30% reduction of payable PIT on income from business activities, on the condition that the annual revenue of the tax periods of 2026 and 2027 does not exceed 10 billion VND/year.
- Enterprises and organizations: Entitled to a 30% reduction of payable CIT on the income of enterprises and organizations established under Vietnamese law with an annual revenue of the tax periods of 2026 and 2027 not exceeding 10 billion VND/year.
2. Important Implementation Notes for Taxpayers
To apply the incentives accurately and avoid the risk of tax recovery, taxpayers should note the following technical rules:
- Scope of application for individuals: The 30% PIT reduction policy only applies to income from business activities. However, other income sources of individuals, such as salaries and wages, are not eligible for this incentive.
- Anti-avoidance regulations for split or separated enterprises: To prevent intentional splitting of scale to lower revenue below the incentive ceiling, the CIT reduction policy does not apply to enterprises formed from the split or separation of enterprises carried out after the effective date of this Resolution (August 24, 2026), if the total annual revenue of 2026 or 2027 of the enterprises after split or separation combined exceeds 10 billion VND.
- Principle of calculating tax with overlapping incentives: For enterprises currently enjoying other CIT incentive packages as prescribed by law, the 30% CIT reduction under this Resolution will be calculated based on the actual CIT payable after subtracting the current incentives.
3. Principle of Cumulative Tax Incentives
A noteworthy point of the 30% CIT reduction policy is the cumulative tax incentive mechanism under Clause 2, Article 1 of Resolution No. 43/2026/QH16. Specifically, enterprises currently enjoying other CIT incentives, such as tax exemptions, tax reductions, or preferential tax rates under the Law on Corporate Income Tax, are still entitled to an additional 30% reduction under this Resolution. Accordingly, the 30% reduction is calculated on the actual CIT payable remaining after applying current incentives.
a) Method of Application
To help your enterprise better understand how this incentive policy is applied, LawPlus would like to present the following example:
Enterprise A has a revenue of 8 billion VND in 2026, satisfying the condition of revenue not exceeding 10 billion VND. Due to operating in a sector where investment is encouraged, the enterprise is enjoying preferential tax rates and a tax reduction regime. After applying current incentives, the remaining CIT payable is 300 million VND.
According to Resolution No. 43/2026/QH16, Enterprise A continues to receive a 30% reduction. Specifically, the reduced tax amount = 300 million VND x 30% = 90 million VND. Thus, the actual CIT payable is 210 million VND.
b) Significance of the Cumulative Tax Incentive Principle
This mechanism helps enterprises further reduce their tax obligations after applying current incentives, thereby obtaining more resources to reinvest and develop business activities.
4. Practical Impact Assessment on Businesses
a) Broad Coverage across the Private Economic Sector
With an annual revenue cap of no more than 10 billion VND, the 30% PIT and CIT reduction policy directly targets the most vulnerable sector in the economy: business households, individual businesses, and micro and small enterprises. According to verification reports from specialized agencies, this policy is expected to cover almost all resident individuals with business activities and the majority of enterprises operating in Vietnam. Particularly in 2026, this fiscal support package is expected to create a strong push to stimulate consumer demand and recover production.
b) Challenges regarding the Revenue Threshold for Certain Specific Industries
Despite its broad coverage, the 10 billion VND revenue cap remains a technical barrier for several capital-intensive sectors such as construction installation, mechanical manufacturing, export processing, or commercial distribution. Due to the nature of their high direct costs for raw materials and labor which construct the product cost, enterprises in these areas can easily exceed the 10 billion VND revenue threshold even though their actual profit margin is very thin, leading to their exclusion from the policy’s benefits. Conversely, enterprises providing services, technology consulting, or software, which have smaller contract values but higher profit margins, will easily make the most of the incentives under this Resolution.
5. Recommendations for Businesses
Resolution No. 43/2026/QH16 is a timely financial support solution by the National Assembly to reinforce the financial capacity of business households and small enterprises. Therefore, to safely utilize the incentive policy and limit post-audit risks, LawPlus recommends:
- Proactively review the actual revenue threshold: Businesses and individual businesses need to closely control their accumulated revenue during the 2026 and 2027 tax periods to ensure it does not exceed 10 billion VND. At the same time, it is necessary to standardize accounting, invoicing, and documentation, and ensure that transactions of 5 million VND or more must be made via non-cash payments to guarantee eligibility for input VAT deduction and deductible expenses when determining taxable income for CIT.
- Be cautious with corporate reorganization plans (splitting or separating): Under Clause 2, Article 1 of Resolution No. 43/2026/QH16, enterprises formed from split-ups or separations after August 24, 2026 will not be eligible for the 30% CIT reduction if the total annual revenue of the post-split enterprises exceeds 10 billion VND. Therefore, any restructuring, splitting, or separation plan must be carefully evaluated from a legal perspective to avoid affecting the right to enjoy tax incentives.
- Closely track implementation guidance documents: Since the Government will issue a Decree guiding the implementation of the Resolution, businesses need to timely update regulations, forms, and tax reduction appendices attached to tax finalization dossiers to ensure compliance with regulations.
6. Conclusion
Resolution No. 43/2026/QH16 brings noteworthy tax support policies for individual businesses and small enterprises. Accordingly, eligible subjects are entitled to a 30% reduction of PIT or CIT in 2026 and 2027. However, taxpayers need to note the condition that annual revenue must not exceed 10 billion VND. At the same time, it is crucial to proactively review dossiers and update new guidance to apply the policy in accordance with regulations. LawPlus is always ready to accompany our clients during the implementation process.