Key Highlights of Certain Special Mechanisms and Policies for the Development of the Private Economy in Resolution 198/2025/QH15
by KMC Consulting Company Limited
On May 17, 2025, the National Assembly issued Resolution 198/2025/QH15 concerning certain special mechanisms and policies aimed at fostering the development of the private economy. Accordingly, the following are the key highlights of Resolution 198/2025/QH15, through which the National Assembly has approved special mechanisms and policies to promote private sector growth:
I. Tax, Fees, and Charges Policies
- Corporate Income Tax (CIT) Exemptions and Reductions
Innovative Startup Enterprises:
- Exemption from CIT for the first 2 years of operation.
- 50% reduction in CIT for the subsequent 4 years.
Small and Medium-sized Enterprises (SMEs):
- Exemption from CIT for the first 3 years from the date of initial business registration.
- Personal Income Tax (PIT) Exemptions
Eligible individuals are exempt from PIT for 2 years and receive a 50% reduction for the following 4 years, specifically targeting:
- Experts and scientists working at innovative enterprises, research and development centers, and innovation hubs.
- Capital Transfer Tax Exemptions
Exemption from both CIT and PIT on income derived from:
- Transfer of shares or capital contributions.
- Rights to contribute capital or purchase shares in innovative enterprises.
- Fees and Charges Policies
- The business license tax (license fee) will be abolished starting January 1, 2026.
- Waiver of fees for reissuance of documents in the course of government apparatus restructuring.
II. Deductible Expenses and Tax Deductions
- Research and Development (R&D) Expenses
- R&D expenses are eligible for double deduction (200%) when determining taxable corporate income, provided that valid invoices and documents are available.
- Contributions to science, technology, and digital transformation funds can be deducted up to a maximum of 20% of taxable income.
- Training Expenses
- Large enterprises that incur costs for retraining human resources for small and medium-sized enterprises within their value chain may classify such expenses as reasonable and deductible for tax purposes.
III. Tax administration & inspection limitations
- Tax Audit and Inspection Reform
- Each enterprise or household business shall be subject to no more than one tax audit or inspection per year, unless there is clear evidence of violations.
- Priority is given to remote audits, utilizing electronic data to minimize direct contact.
- No duplication of audit or inspection content is allowed within the same fiscal year.
- Termination of Presumptive Tax Method from 2026
- Starting from January 1, 2026, household and individual businesses will no longer apply the presumptive tax method and must comply with the current tax administration regulations, including proper tax declarations and supporting documentation.
IV. Support for digital transformation & accounting
Free accounting software provision:
- Small, micro-sized enterprises and household businesses are provided with free accounting software and shared digital platforms.
Free consulting services:
- Small enterprises are eligible for free legal, accounting, and human resources consulting services.
V. Priority in public procurement & bidding
Public procurement packages under VND 20 billion, funded by the state budget, are prioritized for small and medium-sized enterprises (SMEs).
- Highest priority is given to SMEs owned by women, people with disabilities, youth, and ethnic minorities.
VI. Effective date & validity
- Takes effect from May 17, 2025.
- In the event of conflicting regulations, provisions under this policy take precedence over other laws regarding support for private enterprises.
- Certain policies—such as the abolishment of the presumptive tax method and exemption from business license fees—will take effect from January 1, 2026.
Summary
Resolution No. 198/2025/QH15 marks a significant step forward in institutional reform, improving the business environment, and promoting the sustainable development of the private sector.
From an accounting and tax perspective, the Resolution introduces a series of incentive policies aimed at reducing tax obligations, increasing legally deductible expenses, simplifying administrative procedures, and providing financial and credit support—particularly for small and medium-sized enterprises (SMEs), innovative startups, and individual business households.
Tax exemptions and reductions for corporate income tax (CIT) and personal income tax (PIT), along with policies on training and R&D expense deductions, and the elimination of presumptive tax and business license fees from 2026, require accounting and tax departments to proactively update regulations, standardize accounting books, and maintain complete supporting documents to ensure full compliance and maximize tax benefits.
In addition, support measures for accounting software, digital transformation, and access to credit will enhance operational efficiency and financial transparency.
Enterprises are therefore encouraged to promptly reassess their tax and financial strategies to fully leverage these incentives while preparing for upcoming changes in tax administration methods.
For more detailed information about this or related Tax Advisory, please don’t hesitate to contact us.
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