Decree 20/2026/NĐ-CP: Detailed Guidance on Tax Incentives and Premises Support under Resolution 198

On 15 January 2026, the Government officially issued Decree 20/2026/ND-CP (“Decree 20”), providing detailed regulations and implementation guidance for Resolution No. 198/2025/QH15 on special mechanisms and policies for the development of the private sector.

As a key legal instrument issued at the beginning of 2026, Decree 20 concretizes the National Assembly’s commitments to improving the business environment. Its core focus lies in tax incentives and land-access support mechanisms, aimed at creating strong momentum for small and medium-sized enterprises (SMEs) and innovative startups.

Below is a summary and analysis of the key highlights that businesses should note in order to optimize available benefits:

1. Breakthrough Corporate Income Tax (CIT) incentives

Decree 20 activates significant tax incentive packages, applicable immediately from the 2025 tax period, providing strong momentum for business operations and investment attraction.

• For SME:

• Incentive: SMEs are entitled to a 3-year CIT exemption, starting from the first year in which the enterprise is granted its initial Enterprise Registration Certificate.
  Where the certificate was issued prior to the effective date of Resolution 198 and the incentive period has not expired, enterprises may continue to enjoy the remaining incentive period.
• Exclusion cases: To ensure fairness, the incentives do NOT apply to:

• Enterprises newly established as a result of merger, division, separation, consolidation, or conversion of ownership form;
• Enterprises newly established where the legal representative, owner, or majority capital contributor has participated in the management of another enterprise that is still operating or was dissolved less than 12 months prior to the establishment of the new enterprise.
• Certain types of income not eligible for preferential CIT treatment, such as capital transfer, capital contribution rights transfer, real estate transfer, etc.

• For Innovative Startups, Intermediary Support Organizations, and Startup Investment Fund Management Companies:

• CIT incentives: A 2-year CIT exemption, followed by a 50% reduction in CIT payable for the subsequent 4 years, applicable to income derived from innovative startup activities. The incentive period is calculated consecutively from the first year in which taxable income is generated (or from the fourth year since revenue generation if no taxable income arises in the first three years).

Note: Eligible income from innovative and startup activities must be accounted for separately.

2. Personal Income Tax (PIT) incentives on salaries and wages – attracting high-quality talent

Recognizing that human capital is the most valuable asset in innovation, Decree 20 introduces PIT incentives for experts and scientists working at startups, R&D centers, and innovation support organizations:

• Incentives: PIT exemption for 2 years (24 consecutive months); and 50% reduction of PIT payable for the subsequent 4 years (48 consecutive months).
• Conditions: Applicable to income from salaries and wages paid by eligible organizations. Enterprises should prepare sufficient documentation to substantiate expert or scientist status in accordance with the Law on Science and Technology for tax finalization purposes.

3. Tax incentives for investors

• Income derived from the transfer of shares, capital contributions, capital contribution rights, rights to purchase shares, or rights to purchase capital contributions in innovative startups is exempt from CIT and PIT. This policy plays a crucial role in facilitating capital exits for venture capital funds and angel investors.

Note: The exemption does not apply to income from the transfer of shares or related rights in public companies, listed entities, or registered trading organizations under securities laws, nor to capital transfers associated with real estate, which remain subject to taxation under real estate transfer regulations.

4. Land access and production premises support mechanisms

To address the burden of premises costs, Decree 20 establishes direct financial support mechanisms for high-tech enterprises, SMEs, and startups:

• At industrial zones, industrial clusters, and technology incubators:

• Provincial authorities are responsible for publicly disclosing principles, criteria, support levels, and land fund allocations dedicated to priority beneficiaries.
• The State provides support for land sublease rental reductions of at least 30% for the first 5 years from the land lease signing date. Provincial People’s Committees determine the specific reduction levels in accordance with regulations.

Implementation mechanism: Infrastructure developers apply rental reductions directly to tenants. The reduced amounts are subsequently reimbursed by the State budget or offset against land rental obligations payable by the developers.

• Support for leasing public assets:

SMEs, supporting industries, and innovative enterprises are given priority and rental support for unused or underutilized public land and buildings at the local level.

5. Comprehensive support for digital transformation and human resource development

• R&D and innovation support

• Science and technology development fund establishment: Enterprises are permitted to allocate up to 20% of their corporate income tax (CIT) income to establish a fund for science, technology, innovation, and digital transformation. 
• R&D cost incentives: When determining corporate income tax, businesses are allowed to deduct 200% of the actual costs incurred for scientific research and technological development activities

Support for enterprises within value chains: Large enterprises may treat expenses for training and retraining human resources for SMEs participating in their value chains as deductible expenses.

• Free accounting software and digital platforms

• Eligible beneficiaries: small enterprises, micro-enterprises, household businesses, and individual business operators
• Support: Free digital platforms are provided, especially accounting software with integrated electronic invoicing and digital signatures.
• Software requirements: The Ministry of Finance is responsible for leasing/purchasing this software. The software must ensure compliance with accounting/tax standards, security, cloud storage, and the ability to connect data with the tax authority.
• Approach: Beneficiaries will be provided with accounts for free use when needed

• Free training support on management

• Implementation process: The organization of training is carried out in accordance with the law. 
• Beneficiaries: Micro-enterprises, small enterprises, business households and individuals.
• Support level: The state budget supports 100% of the total cost of the Corporate Governance training course (including accounting, tax, human resources).

RECOMMENDATIONS FROM BAKER TILLY A&C

Decree 20/2026/ND-CP opens up many opportunities but comes with strictly binding conditions on the subjects of application. To take advantage of these incentives and limit compliance risks, we recommend:

1. Review the beneficiaries of incentives: Enterprises need to clearly determine whether they belong to the group of "Creative Startups", "Science and Technology Enterprises" or "Small and Medium Enterprises" according to the prescribed criteria. Avoid applying the wrong subjects leading to the risk of tax arrears.
2. Separately monitor incentives: Enterprises are required to separately account income from preferential activities and income from ordinary business activities as well as prepare explanatory bases when inspecting tax.
3. Prepare documents strictly: For PIT and CIT incentives, enterprises need to prepare all documents as prescribed to be ready to explain as well as have a basis for appropriate application.

Please contact Baker Tilly A&C for specific advice on how to apply these offers to your business model.

Contact for advice:

• Mr. Nguyen Bao Anh - Deputy General Director in charge of Tax, Transfer Pricing & Outsourcing services

         Email: anh.nb@a-c.com.vn

• Ms. Nguyen Thi Thu Thao – Senior Manager of Tax and Accounting Services.

        Email: thao.ntt@a-c.com.vn