Business license tax exemption policy: A golden opportunity for small businesses and startups

In recent years, the Vietnamese government has continuously adjusted tax policies toward supporting and encouraging the entrepreneurial spirit. One of the most notable policies is the exemption of business license tax for small businesses and startups in their early years of operation. This is considered a golden opportunity for new businesses to save costs and focus resources on developing their operations.

1. What is the business license tax?

The business license tax is a direct, annual tax applied to organizations, individuals, and households engaged in the production and trading of goods and services in Vietnam. The tax amount is calculated based on the enterprise’s charter capital or revenue.

Common business license tax rates:

• Enterprises with charter capital over VND 10 billion: VND 3 million/year
• Enterprises with charter capital of VND 10 billion or less: VND 2 million/year
• Branches, representative offices, and business locations: VND 1 million/year

2. Legal basis

On May 17, 2025, the 15th National Assembly passed Resolution No. 198/2025/QH15 on “several mechanisms and policies for the development of the private economy.”

Clause 7, Article 10 of the Resolution clearly states: “Terminate the collection and payment of business license fees from January 1, 2026.”

3. Entities eligible for the business license tax exemption

The policy applies to all enterprises, household businesses, and individual business owners, as well as related organizations and individuals. From January 1, 2026, they will no longer have to declare or pay the business license tax.

4. Benefits for Startups and Small Businesses

The exemption of the business license tax brings significant benefits for enterprises:

• Reduced startup costs: Businesses save from several hundred thousand to several million dong annually in upfront fees.
• Reduced administrative burden: New businesses no longer have to deal with the procedures for paying the business license tax when starting operations.
• Encourages entrepreneurship: Helps startups more easily register legally and commence business activities.

5. In combination with other preferential policies (Resolution 198)

• Up to 3 years of Corporate Income Tax (CIT) exemption for newly established small and medium-sized enterprises (SMEs).
• Special tax exemptions/reductions for innovative startups, capital transfers, experts, R&D centers, etc.

The abolition of the business license tax from 2026 serves as a driving force to promote entrepreneurship and the development of small businesses - a breakthrough reform. Startups and SMEs should take full advantage of this support to reinvest, expand operations, and enhance competitiveness.

Zora Consulting is ready to accompany you with legal consulting, tax optimization, and preferential policy utilization - from the business license tax exemption to other tax incentives. Contact us for timely and effective support.

See also: Investment funds and startup support programs in Vietnam