OFFICIAL: SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) ARE EXEMPT FROM CORPORATE INCOME TAX FOR THE FIRST 3 YEARS

On January 15, 2026, the Government issued Decree No.20/2026/NĐ-CP guiding the implementation of
Resolution No.198/2025/QH15 on special mechanisms and policies for the development of the private economy.
👉 This is essential information that newly established enterprises should take note of.

🔥 Key Highlight

✅ Corporate Income Tax (CIT) Exemption for the first 3 years.

• Applicable to small and medium-sized enterprises registering for the first time.
• The tax exemption period is calculated continuously from the first year in which the Business Registration Certificate is issued.
• Applicable to tax periods from 2025 onwards.

👉 In the case where enterprises were established before Resolution No.198 came into effect
but still have remaining incentive periods , they will continue to enjoy the incentives for the remaining duration.

⚠️ Cases where this does NOT apply.

❌ Enterprises established through:

• Merger, consolidation, division, separation.
• Change of business form or change of ownership.

❌ Newly established enterprises, but:

• The legal representative or major contributing member has previously been registered as a legal representative or shareholder of another enterprise.
• The former enterprise was dissolved less than 12 months ago.

❌ Income falling under exclusion items under the Law on Enterprise Income Tax No.67/2025/QH15.

🚀 Special incentives for innovative startups.

👉 Corporate Income Tax Exemption for income derived from:

• Transfer of shares, transfer of contributed capital,or transfer of the right to purchase equity in innovative startups.
• This does NOT apply to shares of listed companies or public companies.

⚠️ In case of selling the entire single-member limited liability company associated with real estate
→ The transaction must be declared in accordance with regulations on real estate transfer tax.

⏰ Effective date

• Decree No.20/2026/NĐ-CP takes effect from January 15,2026.
• Some provisions are applied retroactively from the tax year 2025.
• In cases of overlapping regulations → Taxpayers may choose the most advantageous option.

📌 Message for enterprises & accountants

👉 Establishing an enterprise in the 2025 – 2026 period is not just about starting up, it is “starting up with tax incentives”.

👉 Failure to meet the conditions → losing all tax incentives for the 3-year period.

💬 Comment below if you need a quick check on whether your enterprise qualifies for the tax exemption.