In Vietnam, firms, household businesses exempt from business license fee from 2026

The General Department of Taxation under the Ministry of Finance has issued an urgent dispatch requesting provincial and municipal tax authorities to disseminate information on the declaration and payment of the business license fee for businesses and household traders.

Under the new regulation, they will also be exempt from submitting business license fee declarations for 2026 and subsequent years.

The abolition of this fee is stipulated in Resolution No. 198/2025 of the National Assembly on a number of special mechanisms and policies aimed at developing the private sector.

The taxman stated that it will continue to review and apply management measures in accordance with regulations to ensure the correct and full collection of any business license fees arising in 2025 and earlier years for remittance to the state budget.

The removal of the business license fee is aimed at reducing compliance costs, simplifying administrative procedures, and aligning with the nation’s policy of promoting private sector development.

The business license fee had previously applied to enterprises, cooperatives, public service units engaged in business activities, as well as household and individual business operators.

The fee was determined based on charter capital, investment capital, or revenue, regardless of whether the business was profitable or operating at a loss.

As early as 2019, the Vietnam Chamber of Commerce and Industry (VCCI) proposed exempting household businesses and individuals from the business license fee in their first year of operation.

The VCCI said that the business license fee was an annual payment required of organizations and individuals engaged in production and business activities.

This meant that simply conducting business triggered the obligation to pay this fee, in addition to other taxes.

“While the State is encouraging the establishment of new businesses, ensuring citizens’ freedom to conduct business, cutting costs will facilitate business operations,” according to the VCCI.

The VCCI assessed that collecting the business license fee as soon as people begin doing business runs counter to this policy orientation and spirit.

Recently, the General Department of Taxation also issued guidance to local tax authorities affirming that revenue declared in 2026 will not be used to retrospectively collect presumptive taxes for previous years from household and individual business operators.

Household and individual businesses that paid taxes under the presumptive method up to 2025, including cases where changes in business scale led to revenue adjustments of 50 percent or more and where tax authorities had already assessed presumptive revenue and tax amounts, will not be subject to retroactive review.

Upon shifting to the declaration-based tax method from January 1, 2026, tax authorities will not conduct tax inspections or use 2026 declared revenue to retrospectively handle presumptive tax obligations for 2025 and the previous years.