Short answer: From 2026, high-tech enterprises and innovation startups in Vietnam benefit from a new three-pillar tax package: (1) a 10% corporate income tax (CIT) rate for 25 years, with a 4-year exemption and a 50% reduction for 9 years, for group 1 high-tech enterprises and strategic technology enterprises (Law 133/2025/QH15); (2) innovation startups enjoy a 2-year CIT exemption and a 50% reduction for 4 years, with research and development (R&D) expenses deductible at 200% (Resolution 198/2025, Decree 20/2026); (3) personal income tax (PIT) exemption on salaries from science, technology and innovation assignments, and a 5-year PIT exemption for high-tech talent (Law 109/2025/QH15). This article covers tax policy only, not general investment incentives.
1. CIT incentives for high-tech enterprises: Law 133/2025/QH15
The High Technology Law 133/2025/QH15 takes effect on 1 July 2026, replacing High Technology Law 21/2008/QH12. CIT incentives are split into two groups:
- Group 1 — group 1 high-tech enterprises and strategic technology enterprises: 10% CIT for 25 years, a 4-year tax holiday, and a 50% reduction for the following 9 years;
- Group 2 — group 2 high-tech enterprises: 10% CIT for 15 years.
The key point: incentives attach to recognized status — an enterprise must be recognized in the correct group (group 1, group 2, or strategic technology enterprise) to enjoy the corresponding tier. Correct group classification is the first and decisive step.
2. Incentives for innovation startups: Resolution 198/2025 and Decree 20/2026
Resolution 198/2025/QH15 sets the innovation policy framework, detailed by Decree 20/2026/ND-CP (issued 15 January 2026; the applicable effective date should be verified against the original text before citation). Core tax incentives:
- Innovation startups: 2-year CIT exemption and a 50% reduction for the following 4 years;
- R&D expenses: deductible at 200% of actual cost when determining taxable income — every dong spent on R&D counts double;
- Enterprises may set aside up to 20% of taxable income to establish their own science, technology and innovation development fund.
The 20% fund mechanism is especially valuable for profitable enterprises with long-term R&D plans: the appropriation is treated as an expense, directly reducing taxable income for the period.
3. PIT exemption for science and technology talent: Law 109/2025/QH15
The Personal Income Tax Law 109/2025/QH15 takes effect on 1 July 2026, adding incentives aimed directly at people — the key factor of the high-tech ecosystem:
- PIT exemption for salaries and wages earned from performing science, technology and innovation assignments;
- 5-year PIT exemption for high-tech talent.
For employers, this is a talent-competition tool: at the same gross salary, the take-home pay of high-tech personnel is significantly higher thanks to the PIT exemption — easing wage pressure while retaining top people.
4. Application notes: verify against original texts
- Effective dates vary by instrument: Laws 133/2025 and 109/2025 both take effect on 1 July 2026. For Decree 20/2026/ND-CP, the applicable effective date should be checked directly against the original text before citation in tax filings;
- Do not assume document numbers: anything relating to the amended CIT Law must cite the officially published number — never write a document number that has not been verified;
- Eligibility conditions: each incentive tier has its own recognition conditions (high-tech enterprise, innovation startup, high-tech talent). Claiming the wrong tier may lead to back-tax assessments and penalties upon tax audit.
Frequently asked questions
What CIT incentives do group 1 high-tech enterprises get from 2026?
A 10% rate for 25 years, a 4-year exemption, and a 50% reduction for the following 9 years, under High Technology Law 133/2025/QH15 (effective 1 July 2026).
How long is the CIT exemption and reduction for innovation startups?
A 2-year CIT exemption and a 50% reduction for the following 4 years, under Resolution 198/2025/QH15 and Decree 20/2026/ND-CP.
At what rate are R&D expenses deductible?
200% of cost — every dong spent on research and development is deducted twice when computing CIT.
How much may an enterprise set aside for its science and technology fund?
Up to 20% of taxable income, to establish the enterprise’s own science, technology and innovation development fund.
How long is the PIT exemption for high-tech talent?
A 5-year PIT exemption under Personal Income Tax Law 109/2025/QH15 (effective 1 July 2026); salaries from science, technology and innovation assignments are also PIT-exempt.
Legal references
- High Technology Law 133/2025/QH15 (effective 1 July 2026, replacing Law 21/2008/QH12): CIT incentives for high-tech enterprises;
- Resolution 198/2025/QH15: innovation policy framework;
- Decree 20/2026/ND-CP (issued 15 January 2026): guiding Resolution 198/2025;
- Personal Income Tax Law 109/2025/QH15 (effective 1 July 2026): PIT exemption for science and technology talent.
A high-tech enterprise or innovation startup looking to review eligibility for the 2026 tax incentives — from high-tech enterprise recognition to setting up a science and technology fund? Reach us via the Contact page of FLAT Law Firm for advice on applying the correct incentive tier.
The legal content of this article is reviewed by the FLAW AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.
For reference only, not legal advice.