Tax exemption for the first 3 years: "Levier" for business households to convert
Decree No. 20/2026/ND-CP detailing and guiding the implementation of a number of articles of Resolution No. 198/2025/QH15 of the National Assembly has detailed policies on exemption and reduction of corporate and personal income tax.
For small and medium-sized enterprises registering for the first time, they will be exempt from corporate income tax for the first 3 years from the date of issuance of the first registration certificate.
In case the Enterprise Registration Certificate is issued before Resolution No. 198/2025/QH15 takes effect but there is still time to apply incentives, the enterprise is entitled to incentives according to the provisions of this clause for the remaining time.
This policy does not apply to enterprises established due to division, separation, merger, consolidation, ownership conversion or type of operation.
Ms. Thanh Huyen (Hung Yen) - a business household specializing in wholesale of phone accessories who wishes to be transferred to a business - said: "I often post on groups and forums to seek help when there is information that small and medium-sized enterprises registering for the first time will be exempt from corporate income tax for the first 3 years. This is a great motivation for me to seriously calculate the roadmap to become a business owner.
After many years of doing business in the form of individuals, with the scale of wholesale and retail of phone accessories increasingly expanding, being tax-exempt in the initial stage helps Ms. Huyen reduce cost pressure, have more resources to invest in warehouses, complete the sales system and hire methodical accounting personnel.
According to Ms. Huyen, the new policies aim to encourage individual households to do business transparently and comply with the law. "If we are "nurtured" in the first 3 years, we will have more faith and develop for a long time" - Ms. Huyen shared.
At the same time, Ms. Huyen hopes that functional agencies will continue to support and provide specific guidance so that business households like her can feel secure in transitioning, contributing to expanding the official business sector of the economy.
Similarly, Mr. Nguyen Tung Lam (Hai Ba Trung ward, Hanoi) has been doing business in household electrical appliance stores under the individual household model for many years. Revenue each year reaches 3 billion VND, but he is still quite cautious when converting to a business.
Worried about accounting costs, tax obligations and complicated legal procedures, I still delayed converting business forms. Many people also said that revenue is high, input invoices are sufficient, then go to the business" - Mr. Lam said.
However, Mr. Lam is still worried about complicated tax accounting procedures, which are easy to be fined if not done correctly. Meanwhile, if stability is not maintained, the dissolution of the business will face difficulties.
Need to legalize clearly and easily comply
Sharing from international experience, Dr. Le Duy Binh - Director of Economica Vietnam said that currently almost no country maintains the concept of "business household". In OECD countries, the US, European countries or in ASEAN countries such as Malaysia and Singapore, about 70-80% of businesses register new businesses annually in the form of business entities.
If it is a business individual, tax obligations will be implemented in the form of individual enterprises or individual business types. At the same time, regulations on accounting and social insurance are also designed with the principle of low compliance costs, convenience and ease, suitable to the scale and nature of individual and individual business entities.
In many countries, the one-owner or individual business model has been clearly legalized, with a system of clear, transparent and easy-to-comply regulations.
Building a separate legal framework for individual business forms and individual enterprises for business households and individuals to transform is necessary. This legal framework should be separated from the legal framework for business entities such as limited liability companies and joint-stock companies operating under the current Enterprise Law" - a representative of Economica Vietnam stated clearly.
The determination of legal status for business households should be carried out before reforms of regulations on taxes, social insurance, business conditions... to ensure a fundamental, scientific, and systematic approach to tax management, labor or other regulations for the business household sector.
