Enterprises with annual total revenue below VND 1 billion shall be exempt from CIT
The income of enterprises with annual total revenue of less than VND 1 billion shall be included in the category of CIT-exempt income currently prescribed in Article 4 of the Law on Corporate Income Tax 2025 according to Article 2 of Decree No. 141/2026/ND-CP To be specific:
Income of enterprises or organizations established in accordance with Vietnamese law whose annual total revenue does not exceed VND 1 billion:
- The annual total revenue used as the basis for determining whether an enterprise is eligible for CIT exemption means the total revenue from the sale of goods and provision of services (excluding revenue deductions), revenue from financial activities and other income stated in the Appendix on production and business results enclosed with the CIT settlement return of the immediately preceding tax period;
- Where an enterprise has operated for less than 12 months in the immediately preceding tax period, the total revenue of such preceding tax period shall be determined by dividing the actual total revenue generated during that tax period by the number of months during which the enterprise actually conducted production and business activities in that tax period and multiplying the result by 12 months. Where an enterprise is newly established, converted into another type of enterprise, changes ownership form, undergoes consolidation, merger, full division or partial division in any month of the immediately preceding tax period, its operating duration shall be calculated on a full-month basis;
- Where an enterprise is newly established during the tax period and its projected total revenue for the tax period does not exceed VND 1 billion, it shall not be required to make provisional CIT payments. At the end of the tax period, if the actual total revenue exceeds VND 1 billion, the enterprise shall declare and settle CIT payments in accordance with regulations and shall not be subject to late payment interest;
- The tax exemption prescribed in this clause shall not apply to enterprises established in accordance with Vietnamese law that are subsidiaries or affiliated enterprises where the affiliated enterprise does not satisfy the tax exemption conditions prescribed in this clause.
For more details, see Decree No. 141/2026/ND-CP which comes into force from January 01, 2026.
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