The Government has just issued Decree No. 20/2026/ND-CP, detailing and guiding the implementation of a number of articles of Resolution 198/2025/QH15 on special mechanisms and policies to promote the development of the private economic sector. One of the key contents of the decree is to expand and concretize tax incentives, creating a more favorable environment for private enterprises - especially small businesses, innovative startups and research and technological innovation organizations.
The tax policy group is designed in the direction of reducing input costs, increasing accumulation capacity, and encouraging businesses to invest in high value-added activities. This is an important solution to enhance the role of the private economic sector in the period 2026-2030.
Corporate income tax exemption for newly established small and medium-sized enterprises
A noteworthy highlight of Decree 20/2026 is the regulation on corporate income tax (CIT) exemption for small and medium-sized enterprises registering for the first time. This policy helps businesses significantly reduce financial pressure in the newly established stage, while opening up room for reinvestment, expanding operations and improving competitiveness.
This incentive also contributes to promoting the process of transitioning from business households to business models, in line with the orientation of developing the private economic sector in a more formal, larger and more capable direction.
Tax incentives for innovative startups and investment funds
Decree 20/2026 reserves significant space for innovative startup businesses and startup investment fund management companies. These entities enjoy tax incentives for activities related to innovation and venture capital, thereby reducing initial costs and creating conditions to promote the development of new business models.
The greatest significance of the policy lies in reducing financial risks for innovative businesses - groups with significantly higher research, product development and market testing costs than ordinary businesses.
Personal income tax incentives for experts and innovative human resources
In addition to businesses, the decree also expands personal income tax (PIT) incentives for experts, scientists and human resources operating in innovative startups or research organizations. This is one of the mechanisms to help attract and retain high-quality human resources - a decisive factor for the technological capacity and innovation capacity of the private sector.
Reducing the burden of income tax creates conditions for businesses to access strategic personnel and encourages experts to participate more deeply in research and development projects.
Scholarship fund for science, technology and innovation
The Decree allows businesses to deduct a portion of taxable income to form a fund for science, technology and innovation development. This mechanism creates stable financial resources to support businesses in upgrading technology, improving processes, developing new products or implementing digital transformation projects.
Fund setting up both helps businesses proactively invest in the long term and contributes to reducing tax obligations, creating motivation for businesses to restructure in the direction of improving productivity and added value.
Linking tax incentives with supporting access to production and business premises
A noteworthy new point of Decree 20/2026 is the connection of tax policy with support for land and production and business infrastructure. Accordingly, eligible businesses can be facilitated in accessing land, funds and infrastructure to serve production activities, helping to reduce operating costs and increase scale expansion.
The combination of tax incentives and land support is considered a comprehensive solution, helping policies promote practical efficiency instead of just reducing paper tax obligations.
Expected impact on the private economic sector
Overall, tax incentives in Decree 20/2026 are designed to address both short-term needs and long-term goals of businesses. In the short term, businesses have more resources to overcome high input costs and economic fluctuations. In the long term, incentive mechanisms help promote investment in technology, high-quality human resources and innovative business models - the core foundation for improving the competitiveness of the private sector.
When implemented synchronously with policies on land, infrastructure and capital access support, Decree 20/2026 is expected to open up a new growth space for the private economy in the period 2026-2030, contributing to the goal of building the private sector into an important driving force of the Vietnamese economy.
