Resolution 198/2025/QH15, adopted by the National Assembly on 17 May 2025, introduced a three-year corporate income tax (“CIT”) exemption for newly established small and medium enterprises (“SMEs”), effective from the date of the first issuance of the Enterprise Registration Certificate.
As foreign-invested SMEs increasingly seek to benefit from this incentive, a key question arises: Do foreign-invested SMEs fall within the scope of this exemption?
Regulatory opinion
The Ho Chi Minh City Tax Department addressed this issue directly in Official Letter No. 2169/CTPHCM-QLDN3 dated 3 September 2026, confirming that foreign-invested SMEs do not fall within the scope of the exemption and are accordingly not entitled to the three-year CIT exemption, on the basis that the exemption is intended to implement a private sector development policy for domestic enterprises and does not apply to foreign-invested enterprises.
While the Official Letter is not legally binding, it reflects the tax authority’s view and provides useful guidance for compliance.
SMEs that have applied or are considering applying for this exemption should conduct a thorough review of their CIT position to identify and address any potential tax exposure.
