Vietnam Announces Corporate Income Tax Exemption for Newly Established SMEs

Vietnam’s Decree No. 20 on Corporate Income Tax (CIT) incentives for small and medium-sized enterprises (SMEs) officially came into effect on January 15. Newly registered SMEs are eligible for a CIT exemption for the first three years from the date their initial Enterprise Registration Certificate is issued. However, this incentive does not apply to enterprises established through mergers, consolidations, divisions, separations, changes of ownership, or business restructuring. In addition, eligible innovative startups and other qualified entities may enjoy a preferential scheme, including a two-year exemption followed by a 50% reduction for the subsequent four years.

The Vietnamese government also allows enterprises to allocate up to 20% of their funds to establish a Science and Technology, Innovation, and Digital Transformation Fund. The state will provide free digital platforms and shared accounting software to support small and micro enterprises as well as household businesses. Meanwhile, Vietnam aims to reach 2 million enterprises by 2030 and is committed to fostering domestic private enterprises with international competitiveness.

For more detailed information or related inquiries, it is recommended to consult professional legal or tax advisors. To learn more about company registration in Vietnam, please refer to our dedicated article.

Source: Vietnam Briefing