Vietnamese
This is a notable provision in the draft Law on Small and Medium Enterprise Development dated October 17, 2026, submitted by the Government to the second session of the 16th National Assembly.
Clause 3, Article 9 of the draft Law on Small and Medium Enterprise Development dated October 17, 2026, provides:
3. Enterprises and resident individuals earning business income with annual revenue not exceeding VND 10 billion may choose to calculate tax for the tax period by multiplying assessable income by the tax rate or multiplying revenue by a percentage, in accordance with the laws on corporate income tax and personal income tax.
Accordingly, enterprises and resident individuals earning business income with annual revenue not exceeding VND 10 billion would be entitled to choose one of two tax calculation methods for the tax period:
- Method 1: Assessable income multiplied by the tax rate.
- Method 2: Revenue multiplied by a percentage (%).
These methods would apply in accordance with the laws on corporate income tax and personal income tax.
Notably, this provision has been added to the draft submitted to the National Assembly compared with the previous draft dated August 28, 2026.
To implement this policy, Clause 1, Article 33 of the draft dated October 17, 2026, proposes amending Point b, Clause 2, Article 11 of the 2025 Law on Corporate Income Tax.
Under the proposal, enterprises with total annual revenue not exceeding VND 10 billion, instead of VND 3 billion, would be entitled to choose to pay tax under Clause 1, Article 11 of the Law on Corporate Income Tax or calculate tax by multiplying revenue by a percentage prescribed by the Government.
If the proposal is adopted, the annual revenue threshold for enterprises to choose their tax calculation method under this provision would therefore increase from VND 3 billion to VND 10 billion.
In addition, Clause 2, Article 33 of the draft proposes amending Clause 3, Article 7 of the 2025 Law on Personal Income Tax, as amended and supplemented by Law No. 09/2026/QH16. Under the proposed amendment, individual business operators with annual revenue exceeding the threshold prescribed in Clause 1, Article 7 but not exceeding VND 10 billion would be entitled to choose a tax calculation method prescribed at Points a and b, Clause 2, Article 7, or calculate tax as a percentage of taxable revenue.
Regarding the effective date, Clause 1, Article 34 of the draft proposes that the Law on Small and Medium Enterprise Development take effect on July 1, 2027. The amendments concerning corporate income tax and personal income tax under Clauses 1 and 2, Article 33, however, are proposed to apply from the 2026 tax period.
