Vietnam approves tax relief and business reforms for 2026
6 min read
Vietnam's National Assembly Standing Committee on October 17 unanimously approved sweeping economic reforms that will ease business operations and reduce tax burdens starting in 2026, signaling the country's commitment to creating a more competitive investment environment.
Here are the three key points from Vietnam's recent business and tax reforms for 2026:
- Personal income tax deductions will increase by more than 40%, lifting millions out of the tax bracket and stimulating consumer spending.
- A major extension of a 2% VAT reduction will continue through the end of 2026 for most goods and services, easing costs for both businesses and consumers.
- Business regulations will be simplified by amending the Investment Law, removing special permit requirements for many sectors to streamline operations and encourage investment.
Government Reduces Tax Burden for Millions
The Standing Committee officially raised personal income tax deductions by more than 40%, increasing the monthly deduction for taxpayers from 11 million VND to 15.5 million VND ($588) and for each dependent from 4.4 million VND to 6.2 million VND ($235). The changes will take effect from the 2026 tax year, with final tax calculations due in early 2027.[1][2][3]
Under the new structure, individuals earning up to 17 million VND monthly will pay no personal income tax, while those with one dependent can earn up to 24 million VND tax-free. Deputy Finance Minister Nguyen Duc Chi told the committee that the adjustment reflects a 40-42% increase in per capita income and GDP since the last revision in 2020.[4][5][6][1]
The reform will cost the national budget approximately 21 trillion VND ($798 million) annually in reduced tax revenue, but officials argue it will stimulate consumer spending and economic growth. Chi noted that Vietnam's current deduction level is now nearly three times the national average income and comparable to regional standards.[3][7][4]
Investment Law Streamlines Business Operations
Simultaneously, the committee reviewed draft amendments to the Investment Law that propose eliminating business conditions for 21 sectors currently requiring special permits. Deputy Finance Minister Nguyen Thi Bich Ngoc presented the reform package, which targets sectors including accounting services, tax procedures, rice exports, auto warranty services, data center operations, and study abroad consulting.[1][2][3]
The Vietnam Chamber of Commerce and Industry has advocated for additional deregulation, suggesting the removal of conditions for UAV research and manufacturing, crematorium operations, and narrowing regulations on gold trading to focus only on gold bar production rather than all gold-related businesses. VCCI Deputy Secretary-General Dau Anh Tuan argued that many current restrictions are "relatively unnecessary" and limit innovation.[1]
The proposed changes shift Vietnam's regulatory approach from pre-approval to post-supervision monitoring, aligning with global trends toward reducing market entry barriers. The reforms aim to enhance Vietnam's business environment as the country targets annual economic growth of at least 10% for 2026-2030.[2][3][4][5]
If approved by the National Assembly, the Investment Law amendments will take effect January 1, 2026, providing immediate relief to businesses navigating Vietnam's regulatory framework.[3][2]
Reference sources:
[1](https://thanhnien.vn/de-xuat-bai-bo-dieu-kien-kinh-doanh-21-nganh-nghe-185251017093935945.htm)[2](https://thethaovanhoa.vn/phien-hop-thu-50-uy-ban-thuong-vu-quoc-hoi-giam-so-nganh-nghe-dau-tu-kinh-doanh-co-dieu-kien-tao-thuan-loi-cho-nha-dau-tu-20251017110747104.htm)[3](https://www.vietnamplus.vn/giam-so-nganh-nghe-dau-tu-kinh-doanh-co-dieu-kien-tao-thuan-loi-cho-nha-dau-tu-post1070864.vnp)[4](https://www.reuters.com/world/asia-pacific/vietnam-targets-annual-growth-least-10-2026-2030-2025-10-15/)[5](https://www.channelnewsasia.com/asia/vietnam-communist-party-target-faster-growth-five-years-challenges-5403301)[1](https://tuoitre.vn/chinh-thuc-nang-giam-tru-gia-canh-len-15-5-trieu-thang-ap-dung-tu-ky-tinh-thue-2026-20251017103939942.htm)[2](https://eva.vn/tin-tuc/chinh-thuc-nang-giam-tru-gia-canh-len-155-trieu-thang-c73a650809.html)[3](https://plo.vn/chot-phuong-an-nang-muc-giam-tru-gia-canh-va-nguoi-phu-thuoc-post876023.html)[4](https://thanhnien.vn/nang-muc-giam-tru-gia-canh-thue-thu-nhap-ca-nhan-len-155-trieu-dong-thang-tu-2026-185251017102812806.htm)[5](https://cand.com.vn/su-kien-binh-luan-thoi-su/thu-nhap-tren-15-5-trieu-dong-thang-moi-phai-dong-thue-muc-giam-tru-cua-nguoi-phu-thuoc-la-6-2-trieu-dong-i784911)[6](https://thethaovanhoa.vn/phien-hop-thu-50-uy-ban-thuong-vu-quoc-hoi-thong-qua-nghi-quyet-dieu-chinh-muc-giam-tru-gia-canh-20251017133001516.htm)[7](https://www.24h.com.vn/kinh-doanh/giam-tru-gia-canh-len-155-trieu-dong-tu-ky-tinh-thue-2026-c161a1706643.html)