Tax and Finance Newsletter – August 2026

30% Reduction in PIT and CIT for Enterprises and Business Individuals with Revenue Below VND 10 Billion for the 2026–2027 Period

At Anh Consulting and Auditing Co., Ltd. (ACAC), we place strong emphasis on keeping pace with regulatory developments and providing accurate professional knowledge to help businesses make effective financial decisions, remain compliant, and adapt flexibly in a changing policy environment.

The most notable development in August 2026 is the National Assembly’s adoption of a Resolution reducing by 30% the personal income tax (PIT) and corporate income tax (CIT) payable by small enterprises and business individuals for the two years 2026 and 2027 – a support policy with very broad coverage. In addition, the tax authority has further clarified a number of regulations on PIT withholding for wages and remuneration under the new PIT Law. ACAC’s August 2026 newsletter summarizes the most notable updates to help enterprises and business individuals stay informed and adjust accordingly in a timely manner.

Tax Policy Guidance and Updates

Value-Added Tax (VAT)

Under Official Letter No. 5868/CT-CS (14 August 2026), livestock products (such as buffaloes and cattle) self-produced by an organization or individual — including those purchased as young stock and fattened in accordance with the techniques and timeframes prescribed by the Ministry of Agriculture — and sold unprocessed are not subject to VAT. Conversely, where an enterprise purchases buffaloes or cattle for resale without continuing to raise or fatten them, or fattens them without following the prescribed techniques or timeframes — i.e., engages in pure trading activity — then from 1 January 2026: sales to enterprises, cooperatives, or unions of cooperatives are not required to be declared or VAT calculated and paid; whereas sales to business households, business individuals, and other entities are subject to VAT at the rate of 5%.

Corporate Income Tax (CIT)

The tax authority has reiterated the principles governing CIT incentives for expansion investment projects: an enterprise with an ongoing investment project in an incentivized sector or location that expands its production scale, increases capacity, or renews technology, and that satisfies the prescribed conditions, may elect either to continue receiving the incentives applicable to the existing project for its remaining term, or to be exempted from or have reduced the tax on the additional income generated by the expansion investment (with the exemption/reduction period equivalent to that of a new investment project in the same location and sector). For an enterprise formed through conversion of enterprise type, change of ownership, division, separation, merger, or consolidation, the resulting enterprise inherits the CIT incentives (including any unutilized carried-forward losses) of the enterprise or project prior to the conversion, provided it continues to satisfy the conditions for the incentives and for loss carry-forward as prescribed.

Personal Income Tax (PIT)

Under Decree No. 253/2026/ND-CP, for a resident individual who has not entered into a labor contract or has entered into one of less than three (03) months, an income-paying organization must withhold PIT at a rate of 10% before paying any income of VND 5 million or more per payment – this requirement also applies to payments made to an employee whose labor contract has already terminated. Where an individual estimates that their total taxable income for the year, after personal deductions, will not reach the taxable threshold, they may submit a commitment letter to the income-paying organization to be temporarily exempted from withholding — the individual bears responsibility for the accuracy of the commitment and will be dealt with under tax administration law if found to have acted fraudulently. Regarding the applicable threshold, under the personal deduction levels effective from 2026 (VND 15.5 million/month for the taxpayer and VND 6.2 million/month for each dependant), an individual with no dependants becomes liable for PIT once their taxable income from wages and remuneration exceeds VND 15.5 million/month; each additional dependant raises this threshold by a further VND 6.2 million/month (for example, VND 21.7 million/month with one dependant, and VND 27.9 million/month with two dependants). In addition, wages and remuneration for night work and overtime performed in accordance with the conditions and hours prescribed under labor law are exempt from PIT; enterprises must prepare a schedule clearly recording the hours worked and the corresponding night-work/overtime pay, to be retained and produced upon request by the tax authority – any amount paid in excess of the limits prescribed under labor law remains subject to tax.

Other Taxes

Regarding agricultural land use tax, Circular No. 89/2026/TT-BTC prescribes the dossier required for tax exemption or reduction for taxpayers facing difficulties due to natural disasters, fire, or unexpected accidents, comprising a request in the prescribed form together with documentation from the competent authority confirming the time, location, and extent of the damage. A taxpayer already recorded in the agricultural land use tax register who now qualifies for exemption under the regulations is not required to re-declare; the tax authority will proactively update the monitoring register in coordination with the commune-level People’s Committee.

30% Reduction in PIT and CIT for the 2026–2027 Tax Periods

On the afternoon of 24 August 2026, the National Assembly adopted a Resolution reducing the PIT and CIT payable for the 2026 and 2027 tax periods, effective immediately from the date of adoption. Specifically: a 30% reduction in PIT payable on business income of a resident individual with annual revenue not exceeding VND 10 billion; and a 30% reduction in CIT payable by an enterprise or organization established under Vietnamese law with annual revenue not exceeding VND 10 billion — except where an enterprise is formed through a division or separation after the Resolution’s effective date and the combined revenue of the divided/separated enterprises exceeds VND 10 billion. For an enterprise already receiving tax incentives under the Law on CIT or other laws or resolutions of the National Assembly, the 30% reduction is calculated on the CIT payable after deducting the existing incentives — that is, the reduction is applied cumulatively on top of those incentives. This is a support policy with very broad coverage; small enterprises and business individuals should promptly review the revenue condition so as to apply it when finalizing taxes for the two years 2026 and 2027.

Other Matters

On 21 August 2026, the Ministry of Finance issued Circular No. 121/2026/TT-BTC amending a number of forms for enterprise and business household registration; dossiers received before the Circular’s effective date but not yet approved continue to be processed under the previous regulations. Notably, under Official Letter No. 5947/CT-KTr (17 August 2026), the Tax Department acknowledged and moved to correct instances where certain local tax officials created difficulties or prolonged the processing of dossiers to “clean up tax codes” (confirming the termination or restoration of tax code validity), even though the taxpayers concerned had fully satisfied their obligations. The tax authority has required its units to publicize their processing procedures and timelines, strictly prohibited the imposition of any additional requirements beyond those prescribed, and published hotline numbers for receiving feedback — enterprises encountering similar difficulties may report directly through these channels.

Transparency – Updates – Partnership

Through its monthly newsletter, ACAC aims not only to deliver authoritative information but also to help enterprises understand the practical impact of policy changes, enabling them to proactively adjust their financial strategies and risk management.

We believe that transparency, professional rigor, and timely updates form the foundation for the sustainable growth of Vietnam’s business community in this era of global integration.

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