Vietnam has introduced a 30% reduction in corporate income tax (CIT) payable for eligible enterprises with annual revenue of no more than VND 10 billion. Established under Resolution 43/2026/QH16, the relief applies to the 2026 and 2027 tax periods, with eligibility assessed separately for each year.
For foreign-invested businesses, the opportunity starts with understanding how the conditions apply to their Vietnam entity. Revenue forecasts, existing tax incentives and provisional payments should be reviewed together to establish a clear and supportable tax position.
What Does Vietnam’s 30% CIT Reduction Provide?
Resolution 43 took effect on 24 August 2026 and applies to the 2026 and 2027 tax periods. Eligible enterprises can reduce their CIT payable by 30% after deducting any existing tax incentives.
The practical benefit depends on the company’s underlying tax position. Finance teams should first establish the correct taxable income, applicable rate and incentives before calculating the additional relief.
This also means that management should distinguish a potential tax saving from an amount ready to recognise in a forecast. A documented eligibility review provides a stronger basis for budgeting and internal reporting.
Could your business qualify for Vietnam’s 30% CIT reduction? Speak with Ascentium Vietnam’s tax experts to review your eligibility and assess the potential savings
Which Foreign-Invested Businesses May Qualify?
Companies established under Vietnamese law, including locally incorporated foreign-owned subsidiaries, may qualify where they meet the conditions. Foreign contractors and representative offices have different tax positions, while branches should assess their treatment separately.
The resolution also contains an exclusion for certain enterprises formed through division or separation after its effective date where the combined annual revenue of the resulting enterprises exceeds VND 10 billion.
Businesses should therefore review both their legal structure and any restructuring history. Group membership, entity size and local incorporation should each be considered in the context of the particular relief being assessed.
Unsure whether your Vietnam entity qualifies? Speak with Ascentium Vietnam’s tax experts to review your company structure and assess your eligibility.
How Is Revenue Determined for the VND 10 Billion Threshold?
Under Decree 398, the revenue test covers sales and service revenue after revenue deductions, financial revenue and other income. It also includes revenue from dependent units and business locations reflected in the annual combined financial statements.
A review based only on sales invoices may therefore overlook relevant amounts. Businesses approaching the threshold should reconcile the forecast with the full accounting records.
| Area to review | Practical check |
| Sales and services | Reconcile recorded revenue with contracts, delivery and acceptance records. |
| Financial revenue | Review the relevant ledger accounts alongside operating revenue. |
| Other income | Identify amounts omitted from the initial management forecast. |
| Dependent operations | Confirm that relevant units and business locations are included. |
| Year-end cut-off | Check that recognition follows the applicable accounting and tax requirements. |
How Is the 30% CIT Reduction Calculated?
The reduction is calculated on CIT payable after existing incentives.
The following example illustrates the calculation for a company assumed to meet all eligibility conditions:
| Calculation | Amount |
| CIT payable after existing incentives | VND 300 million |
| Additional reduction: VND 300 million × 30% | VND 90 million |
| CIT payable after the reduction | VND 210 million |
For internal review, retain a calculation that shows each stage separately. This helps local finance teams, external advisers and regional management understand the assumptions behind the final amount.
How Does the Reduction Affect Provisional CIT Payments?
Decree 398 allows enterprises forecasting qualifying revenue to determine the reduction when making quarterly provisional CIT payments. Where actual annual revenue exceeds VND 10 billion, the enterprise must pay the resulting shortfall, with late-payment treatment governed by the applicable tax administration rules.
Businesses should update their assessment as the year progresses. A forecast prepared earlier in the year may need revision following new contracts, completed projects or changes in expected income.
For companies close to the threshold, comparing qualifying and non-qualifying scenarios can help management plan for the possible cash requirement.
Key Compliance Risks Businesses Should Review
Several practical gaps can weaken an otherwise reasonable assessment:
- Incomplete forecasts: relevant income is missing from the revenue reconciliation.
- Unsupported recognition: the forecast does not align with delivery, completion or acceptance records.
- Incorrect calculation sequence: the additional relief is calculated before existing incentives.
- Outdated payment assumptions: provisional payments continue to rely on an earlier forecast.
- Unclear responsibility: no one owns the final eligibility review or supporting documentation.
Addressing these gaps early can make the year-end review more efficient and give management a clearer view of the expected liability.
What Should Foreign-Invested Businesses Do Now?
- Confirm the entity’s position. Review its legal structure and any relevant division or separation.
- Prepare a complete revenue reconciliation. Connect the forecast with the general ledger and supporting records.
- Review existing incentives. Document the basis for the tax rate and incentives used in the calculation.
- Update the provisional payment assessment. Compare payments made with the latest estimated annual liability.
- Assign review responsibilities. Agree who prepares, checks and approves the assessment.
- Maintain an evidence file. Keep calculations, assumptions and supporting documents together.
These steps help connect the potential saving with the company’s wider accounting, reporting and cash flow planning.
How Ascentium Vietnam Can Help
Ascentium Vietnam, formerly InCorp Vietnam, supports foreign-invested and local businesses with accounting, tax compliance and advisory services.
Our team can help assess eligibility for CIT relief, review existing incentives, reconcile accounting information and prepare tax calculations and filings. We work with businesses to identify gaps early and coordinate the information needed for year-end finalisation.
Speak With Our Expert to review how Vietnam’s 30% CIT reduction may apply to your business. Contact vietnam@ascentium.com, call +84 28 3930 2828, or visit Ascentium Vietnam.
