30% Reduction in Personal Income Tax and Corporate Income Tax in 2026 and 2027: Who Is Eligible?

Resolution No. 43/2026/QH16 of the National Assembly on the reduction of Personal Income Tax (PIT) and Corporate Income Tax (CIT) for individuals and enterprises introduces a notable support policy for the 2026 and 2027 tax periods.

Accordingly, certain business individuals and enterprises that meet the prescribed revenue thresholds will be entitled to a 30% reduction in the PIT or CIT payable. This policy is expected to help reduce tax cost pressures, support production and business activities, and provide additional momentum for enterprises and business households.

So, which taxpayers are eligible, and what should they pay attention to when applying the policy?

1. 30% Reduction in Personal Income Tax (PIT) for Business Individuals

According to Article 1 of Resolution No. 43/2026/QH16, resident individuals earning income from business activities with annual revenue of no more than VND 10 billion in 2026 or 2027 are eligible for the tax reduction.

The reduction is specified as follows:

A 30% reduction in the PIT payable for the 2026 and 2027 tax periods.

Therefore, an important condition for determining whether an individual qualifies for the tax reduction is that the annual revenue generated from business activities in each relevant year must not exceed the VND 10 billion threshold prescribed by the Resolution.

Example:

Suppose a resident individual carries out business activities and has PIT payable of VND 100 million for the 2026 tax period.

If the individual fully satisfies the eligibility requirements under Resolution No. 43/2026/QH16, the tax reduction will be:

VND 100 million × 30% = VND 30 million

The remaining PIT payable after the reduction will be:

VND 100 million – VND 30 million = VND 70 million

Therefore, enterprises and individuals need to clearly distinguish between the revenue used to determine eligibility for the policy and the actual tax payable used to calculate the 30% reduction.

2. Enterprises with Revenue of No More Than VND 10 Billion Are Eligible for a 30% CIT Reduction

The tax reduction policy applies not only to business individuals but also to enterprises and organizations that satisfy the conditions prescribed by the Resolution.

Specifically, enterprises and organizations established under Vietnamese law with annual revenue of no more than VND 10 billion in 2026 or 2027 will be entitled to a 30% reduction in CIT payable for the corresponding tax period.

The policy applies to:

• The 2026 tax period;
• The 2027 tax period.

This is particularly noteworthy for small and medium-sized enterprises, as the 30% reduction may have a direct impact on their tax costs and cash flow.

Example:

Suppose an enterprise satisfies the revenue requirements and has CIT payable of VND 200 million for the 2026 tax period.

The tax reduction will be:

VND 200 million × 30% = VND 60 million

The remaining CIT payable by the enterprise will be:

VND 200 million – VND 60 million = VND 140 million

Accurately determining revenue and CIT payable is important when preparing the tax finalization documentation.

3. Enterprises Established Following a Division or Separation Need to Pay Attention

Resolution No. 43/2026/QH16 also provides specific provisions for enterprises established as a result of the division or separation of an enterprise after the Resolution takes effect.

Under the Resolution, where an enterprise is already entitled to CIT incentives under the Law on Corporate Income Tax or other laws and resolutions of the National Assembly, the CIT reduction under this policy will be determined based on the CIT payable after deducting the applicable tax incentives.

This is an issue that enterprises should pay particular attention to when they are simultaneously subject to multiple tax incentive policies.

In principle, enterprises should not interpret the 30% reduction as being calculated directly on the tax amount before applying other tax incentives.

The amount eligible for the reduction should be determined based on the CIT payable after the applicable tax incentives have been applied in accordance with the regulations.

4. How Should Enterprises Determine Revenue?

To apply the tax reduction policy, one of the most important issues is determining whether annual revenue exceeds the VND 10 billion threshold.

Enterprises should review revenue data recorded in their accounting systems, financial statements, and tax filings to ensure consistency.

In particular, revenue determination should not be performed independently only at the time of tax finalization. Instead, it should be cross-checked against:

• Accounting records;
• Sales invoices and supporting documents;
• Tax returns;
• Financial statements;
• Revenue arising during the relevant tax period.

For enterprises engaged in multiple business activities or carrying out specific or unusual transactions, revenue determination should be carefully reviewed to avoid incorrectly applying the tax reduction policy.

5. During Which Period Does the Tax Reduction Policy Apply?

Another important point for enterprises and individuals to note is that this policy is not applicable indefinitely.

According to Article 2 of Resolution No. 43/2026/QH16, the Resolution takes effect from August 24, 2026 and applies to the 2026 and 2027 tax periods.

This means that the tax reduction policy has been specifically designed for the two tax periods of 2026 and 2027.

Therefore, when preparing tax declarations and tax finalization dossiers, taxpayers need to correctly identify the relevant tax period for applying the policy and monitor guidance issued by the Government to ensure consistent implementation.

6. What Should Enterprises Prepare to Avoid Errors When Applying the Tax Reduction?

Although the 30% reduction is a significant support policy, its application must still be based on the taxpayer's actual records and data.

Enterprises should proactively take the following steps:

• First, review revenue. Reconcile accounting revenue with invoice data and tax filings to determine whether the enterprise satisfies the prescribed revenue threshold.
• Second, accurately determine the tax payable. For enterprises benefiting from other CIT incentives, the enterprise must determine the tax payable after applying the applicable incentives before calculating the 30% reduction.
• Third, maintain complete supporting documentation. Documents evidencing revenue, taxable income, tax payable, and the legal basis for applying the policy should be properly retained to support explanations or responses when necessary.
• Fourth, keep updated on implementation guidance. The Resolution assigns the Government responsibility for providing detailed regulations. Therefore, enterprises and business individuals should closely monitor newly issued guidance to ensure that the policy is applied correctly and in accordance with the applicable regulations.

Viet Australia
Viet Australia Auditing Company is an independent auditing organization licensed and established in 2007 in the Socialist Republic of Vietnam.