Decree No. 141/2026/ND-CP: Tax Exemption for Businesses with Annual Revenue Under VND 1 Billion — What Entrepreneurs Need to Know Now

11-05-26 MTParners

On 29 April 2026, the Government issued Decree No. 141/2026/ND-CP amending tax policies for business households and enterprises. The most significant change raises the VAT and personal income tax (PIT) exemption threshold for business households from VND 500 million to VND 1 billion per year. Critically, for the first time in Vietnamese tax law history, enterprises with total annual revenue not exceeding VND 1 billion are fully exempt from corporate income tax (CIT). An estimated 235,800 micro-enterprises will benefit directly, with total tax savings of approximately VND 2,164 billion per year. This Decree implements National Assembly Resolution No. 198/2025/QH15 on special mechanisms for private sector development and takes effect from 1 January 2026.

1. From VND 500 Million to VND 1 Billion — A Historic Exemption Threshold

Under Articles 3 and 4 of Decree No. 68/2026/ND-CP (as amended by Decree No. 141/2026/ND-CP), the annual revenue threshold below which business households and individual traders are exempt from VAT and PIT has been doubled — from VND 500 million to VND 1 billion per year.

This adjustment reflects the significant rise in business operating costs in recent years. Business households with annual revenue below VND 1 billion will no longer be required to file or pay VAT or PIT, substantially reducing compliance costs and administrative burden.

An important clarification: the threshold applies to the aggregate revenue across all business locations of a single household, not per individual outlet. Where multiple locations exist, all revenues are combined to determine whether the threshold is met.

2. Enterprises Under VND 1 Billion Revenue — Full CIT Exemption for the First Time

The most significant and unprecedented provision is found in newly added Clause 15, Article 4 of Decree No. 320/2025/ND-CP (inserted by Decree No. 141/2026/ND-CP): income of enterprises and organizations incorporated under Vietnamese law with total annual revenue of VND 1 billion or less is fully exempt from corporate income tax.

Based on the policy impact assessment, approximately 235,800 micro-enterprises qualify for CIT exemption under this new rule, with total tax saved estimated at VND 2,164 billion per year. On average, each eligible enterprise saves approximately VND 9.2 million in CIT annually — a practically meaningful amount for micro-scale businesses.

The exemption applies to all enterprise types incorporated legally in Vietnam: limited liability companies, joint-stock companies, private enterprises and other economic organizations, provided their total annual revenue does not exceed VND 1 billion.

3. E-Invoices — A New Mandatory Requirement for Businesses Exceeding VND 1 Billion

Alongside the tax relief, Decree No. 141/2026/ND-CP strengthens e-invoicing requirements to improve oversight of medium-scale business households. Specifically, business households and individual traders with annual revenue exceeding VND 1 billion must use one of two formats: tax authority-authenticated electronic invoices, or electronic invoices generated from cash registers connected to the tax authority’s data system.

For businesses operating at multiple locations, a single tax identification number must be used across all outlets, with a specific location code stated on each invoice. This enables the tax authority to monitor aggregate revenue and prevent artificial revenue splitting to avoid the tax threshold.

4. Retroactive Effect from 1 January 2026 — A Refund Opportunity for Enterprises

A notable feature of Decree No. 141/2026/ND-CP is that, although issued on 29 April 2026, it takes effect from 1 January 2026 — applying retroactively to the entire 2026 fiscal year. This means enterprises that already paid CIT, or business households that paid VAT/PIT during the first four months of 2026, and now fall within the newly exempt categories, are entitled to claim a tax refund or apply the overpayment as a credit against future tax obligations.

This Decree forms part of the concrete implementation of National Assembly Resolution No. 198/2025/QH15 (passed 17 May 2025) on special policies for private sector development, alongside Decree No. 20/2026/ND-CP (issued 15 January 2026) and related instruments. The overall policy picture reflects a consistent government strategy: reducing tax burdens on small and micro private businesses while promoting formalization and transparency through the e-invoicing system.

Practical Implications

Business households with revenue below VND 1 billion/year: No longer required to file or pay VAT or PIT — substantially lower compliance costs and administrative obligations.
Micro-enterprises (revenue ≤ VND 1 billion/year): Fully exempt from CIT — average savings of ~VND 9.2 million per year to reinvest in product and service development.
Business households with revenue above VND 1 billion: No tax exemption but mandatory e-invoicing — must prepare appropriate technology infrastructure and invoicing processes.
Accounting obligations remain: Even with tax exemption, businesses must maintain basic accounting records and file financial statements as required under accounting law.
Refund opportunity: Businesses that paid tax between January and April 2026 and now qualify for exemption under Decree No. 141/2026/ND-CP may file for a tax refund with their managing tax authority.

Recommendations for Enterprises and Business Households

Based on our analysis of Decree No. 141/2026/ND-CP, MT & Partners Law Firm recommends the following action steps:

Step 1 — Review your revenue threshold: Check your actual 2026 revenue to date and full-year projection to determine whether you qualify for exemption.
Step 2 — File for a tax refund (if applicable): If you qualify for exemption but have already paid CIT or lump-sum tax from 1 January 2026, file a refund application under Article 70 of the Law on Tax Administration 2019.
Step 3 — Implement e-invoicing (if revenue exceeds VND 1 billion): Business households that have not yet adopted an e-invoicing system should promptly register with the tax authority and select a suitable e-invoice service provider.
Step 4 — Consider converting your business model: As your business grows, converting from a business household to a single-member LLC provides limited liability protection and access to additional investment incentives.

MT & Partners Law Firm, with a team of experienced lawyers specializing in corporate law, tax and investment, is ready to assist businesses in reviewing eligibility for tax exemptions, processing tax refund applications, and advising on business model restructuring in line with the latest regulations. Contact our hotline at 0987140772 or email info@mtpartners.vn for direct and complimentary consultation.

(*) This article is for general reference only and does not constitute specific legal advice. For accurate and comprehensive guidance, please contact MT & Partners Law Firm directly.

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