Abolition of business license fee as from 01 January 2026

In May 2025, the National Assembly promulgated Resolution No. 198/2025/QH15 on certain special mechanisms and policies aimed at promoting the development of the private economic sector (“Resolution 198”). Resolution 198 took effect on 17 May 2025 and applies to enterprises, household businesses, individual business entities, and relevant organizations and individuals.  

One of the key provisions of Resolution 198 is the policy to abolish fees assessed as “no longer appropriate in the context of promoting start-ups and business scale expansion”, as stipulated in Clause 7 Article 10 on the “Termination of the collection and payment of business license fee as from 01 January 2026”. 

Accordingly, from the termination of the collection and payment of business license fee on 01 January 2026, tax obligations from the year 2026 onward shall be restructured as follows: 

1. Enterprises shall only be required to comply with three principal taxes

(i) Value-Added Tax (VAT); 

(ii) Corporate Income Tax (CIT); 

(iii) Personal Income Tax (PIT), where payments of taxable income are made. 

2. For household businesses

Household businesses shall only be required to pay two principal taxes: VAT and PIT. However, certain household businesses operating in specific sectors may still be subject to environmental protection tax, natural resources tax, etc. 

The abolition of the fixed-tax mechanism for household businesses: Clause 6 Article 10 of Resolution 198 stipulates the official termination of the fixed-tax mechanism as from 01 January 2026. Accordingly, under the Law on VAT 2024, household businesses with annual revenue of VND 200 million or more are required to pay VAT or PIT in accordance with applicable regulations.  

On 10 December 2025, the amended Law on PIT was passed. Under this law, the Government adjusted the revenue threshold exempted from tax for household and individual businesses from VND 200 million per year to VND 500 million per year, and allows this threshold to be deducted prior to calculating tax based on the prescribed percentage of revenue. 

3. Other preferential policies for innovative start-ups

To promote the innovation start-up ecosystem, Clause 1 Article 10 of Resolution 198 provides CIT incentives for: (i) Innovative start-up enterprises; (ii) Management companies of innovative start-up investment funds; and (iii) Intermediary organizations supporting innovative start-ups. 

Specifically, these entities shall be exempt from CIT for the first two (02) years, and shall receive a 50% reduction in payable tax for the subsequent four (04) years with respect to income derived from innovative start-up activities. 

Further to the principles laid down in Resolution 198, detailed guiding regulations are expected to be promptly promulgated for better implementation, particularly regarding revenue determination methods, tax declaration and payment mechanisms for household businesses, as well as procedures for applying tax incentives for innovative start-up enterprises. 

Disclaimer: This publication is for general update. This should not constitute our professional advice for a particular case, entity, or individual. Should you need further information or our professional assistance for your specific cases, please feel free to contact us. 

Credit: We extend our sincere appreciation to Senior Associate Cuong Nguyen, Associate Anh Tran and Trainee Associate Linh Quach for their valuable expertise and dedicated contributions to this article.