2026 marks a turning point for small and medium-sized enterprise (SME) support policy in Vietnam. With Resolution 198/2025/QH15 on special mechanisms and policies for private-sector development and a series of new guiding decrees, SMEs now enjoy an unprecedented incentive package: multi-year corporate income tax holidays, the abolition of the flat-tax regime, and 100% training-cost support. This article summarizes the five newest policies every SME should know in 2026.
1. Three-year corporate income tax holiday for newly registered SMEs
Under Clause 3, Article 7 of Decree 20/2026/ND-CP guiding Resolution 198/2025/QH15, small and medium-sized enterprises registered for the first time are exempt from corporate income tax (CIT) for three years. This is the most valuable incentive in the 2026 package, significantly easing the financial burden on newly established SMEs during their riskiest early years.
Be careful to distinguish: this three-year exemption (Decree 20/2026, for first-time registered SMEs) is different from the two-year CIT exemption under Decree 320/2025/ND-CP — the two-year policy applies only to enterprises converted from household businesses. Different beneficiaries, different legal bases; determine which category you fall into before claiming the incentive.
2. Abolition of the flat-tax regime for household businesses from 1 January 2026
Clause 6, Article 10 of Resolution 198/2025/QH15 abolishes the flat-tax (khoan) regime for household businesses from 1 January 2026, replacing it with the declaration-based method.
The practical impact: millions of household businesses must get used to bookkeeping, invoicing and periodic tax declarations. For growing household businesses, this is a strong push to consider converting into an enterprise — where they can access the SME tax incentives described above — rather than bearing declaration compliance costs as a household business without equivalent benefits.
3. 100% training-cost support
Article 11 of Decree 20/2026/ND-CP provides SMEs with 100% support for workforce training costs. Given that the shortage of skilled labor is a major bottleneck for SMEs, this policy lets businesses upgrade their teams at no training cost — a significant competitive advantage compared with the past, when training was entirely self-funded.
Businesses should proactively check eligibility conditions, procedures and support rates with local authorities so as not to miss out.
4. 30% corporate income tax reduction for 2026–2027
Resolution 43/2026/QH15 provides a 30% reduction of CIT payable for the 2026–2027 period. Unlike the three-year holiday reserved for first-time registered SMEs, this reduction has broader application and serves as general support for the business community over the two years. Eligible SMEs should combine both policies (where qualified) to optimize their tax obligations lawfully.
5. CIT exemption for micro-enterprises (revenue of VND 1 billion or less)
Decree 141/2026/ND-CP exempts from CIT enterprises with revenue of VND 1 billion or less — the micro-enterprise segment. Together with the SME support framework under Decree 80/2021/ND-CP (which remains in force and has not been replaced), this creates a tax safety net covering micro-enterprises through newly established SMEs.
Common points of confusion
- Two years or three years? Two years (Decree 320/2025) is for enterprises converted from household businesses; three years (Decree 20/2026) is for first-time registered SMEs. Identify the correct category before claiming.
- Is Decree 80/2021/ND-CP still effective? Yes. It remains the foundational legal framework for SME support and has not been replaced.
- What is the exact effective date of Decree 20/2026? Businesses should consult the officially published original text to determine the applicable timing for their case.
Legal basis
- Resolution 198/2025/QH15 on special mechanisms and policies for private-sector development: Article 7 (SME tax incentives), Clause 6 Article 10 (abolition of flat tax for household businesses from 1 January 2026), Article 11 (training support).
- Decree 20/2026/ND-CP guiding Resolution 198/2025/QH15: Clause 3 Article 7 (three-year CIT exemption for first-time registered SMEs), Article 11 (100% training-cost support).
- Decree 80/2021/ND-CP on SME support — remains in force.
- Decree 141/2026/ND-CP: CIT exemption for enterprises with revenue of VND 1 billion or less.
- Resolution 43/2026/QH15: 30% CIT reduction for 2026–2027.
Conclusion
The five 2026 policies — a three-year tax holiday for new SMEs, flat-tax abolition, 100% training support, a 30% CIT reduction and micro-enterprise exemption — create an unprecedented incentive environment for the private sector. However, each policy has its own beneficiaries, conditions and legal basis; claiming the wrong incentive may lead to back-tax assessments and penalties. Businesses should review eligibility with legal and tax professionals before claiming.
Need advice on SME tax incentives? FLAT Law Firm helps businesses identify applicable incentives, prepare dossiers and work with tax authorities. Contact us at /en/contact/.
Disclaimer: This article provides general legal information and does not constitute legal or tax advice for any specific case. Tax policies may be further guided; please consult the original texts and professionals before applying.
Transparency label: This content was prepared by the FLAW AI Legal Council; it is reviewed by the QA Council under internal procedures (not reviewed by a human lawyer).
