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Under Decree 20 guiding the National Assembly’s Resolution 198 on private sector development, the Government has detailed policies on corporate and personal income tax exemptions and reductions.
The decree was signed and took effect on January 15.
Specifically, newly registered small and medium-sized enterprises (SMEs) are entitled to a three-year corporate income tax exemption, starting from the date they are issued their first business registration certificate. This policy does not apply to enterprises established through division, separation, merger, consolidation, conversion of ownership, or changes in business form.
Innovative startups and startup support organizations are eligible for a two-year corporate income tax exemption, followed by a 50% reduction for the subsequent four years. Eligible income must be accounted for separately or allocated based on the proportion of revenue and expenses.
In addition, enterprises are exempt from tax on income derived from the transfer of shares, capital contributions, or capital contribution rights in innovative startups. This mechanism does not apply to the transfer of shares in public or listed companies. Similarly, transfers of capital associated with real estate are subject to real estate transfer tax regulations.
Regarding personal income tax, the decree provides tax exemptions for individuals earning income from the transfer of shares, capital contributions, capital contribution rights, or from purchasing shares in innovative startups.
Experts and scientists working at research and development centers, startups, and intermediary organizations supporting innovative startups are entitled to a personal income tax exemption for the first two years, followed by a 50% reduction for the next four years on income from salaries and wages.
Regarding support for research and technology application development, the decree stipulates that enterprises may set aside up to 20% of their corporate income tax–assessable income to establish a Science, Technology, Innovation, and Digital Transformation Development Fund. Enterprises may use this fund to conduct in-house research and development.
The State will provide free digital platforms and shared accounting software for small and micro-sized enterprises, household businesses, and individual business operators.
By the end of 2025, Vietnam is expected to have nearly 1.1 million active enterprises nationwide. Under Resolution 68, the country aims to reach 2 million active enterprises by 2030. The private economic sector is projected to grow at an average rate of 10–12% per year, exceeding overall GDP growth.
Hai Phong News
