Vietnam Small Business Tax Breaks Expand Under New Income Tax Rules

New Vietnam small business tax breaks will provide lower rates and exemptions for smaller enterprises while introducing additional compliance requirements under the country's latest income tax changes.

Corporate income tax rates will range from 15% to 20%, depending on company size, while businesses involved in petroleum and precious-mineral activities will face rates ranging from 25% to 50%.

Businesses generating annual revenue of no more than VND1bn (USD38,000) will be exempt from corporate income tax.

The same revenue threshold will apply to household and individual businesses for value-added tax and personal income tax exemptions, retrospectively from January 1, 2026.

The reforms also provide incentives for innovation.

Eligible companies can allocate up to 20% of pretax profits to science and technology funds, reducing taxable income where the capital is used within five years for approved innovation activities and technological upgrades.

The changes are designed to provide smaller enterprises with tax relief while encouraging companies to direct more resources towards productivity and technological development.