Resolution 198/2025/QH15: Tax Incentives & Development Support For Vietnam's Private Economy

Resolution No. 198/2025/QH15, recently passed by the National Assembly, marks a significant turning point, ushering in a new era of development for Vietnam’s private economy and innovative enterprises. With a series of tax and fee incentives and science and technology support policies, Resolution 198 is not just a financial package; it also represents the State’s strong commitment to fostering a transparent and favorable business investment environment, creating a solid foundation for sustainable development and global integration.

A New Approach In Tax And Fiscal Policy

Resolution 198/2025/QH15 reflects a profound shift in policy thinking: the private economic sector is no longer merely “supplementary” but has become a key pillar of the market economy’s development. Tax policy has been chosen as a crucial “activation tool” to help private businesses reduce cost burdens, increase capital accumulation, enhance their capacity for technological innovation, and expand production.

A notable highlight is the policy offering at least a 30% reduction in land rental fees for the first 5 years for high-tech enterprises, small and medium-sized enterprises (SMEs), and innovative startups operating in industrial parks, industrial clusters, and technology incubators. This significantly eases initial financial pressure, creating favorable conditions for businesses to scale up and invest.

Furthermore, the exemption of business license fees from January 1, 2026, and the waiver of various fees related to issuing and changing documents during state apparatus reorganization contribute to reducing unofficial costs and streamlining administrative procedures. This allows businesses to focus resources on production and business activities.

Breakthrough Incentive Policies For Innovative Enterprises

For innovative enterprises – the driving force of the digital economy – Resolution 198 introduces many groundbreaking incentive policies:

• Corporate income tax (CIT) exemption for the first 2 years and a 50% reduction for the subsequent 4 years for innovative startups and supporting organizations.
• Personal income tax (PIT) and CIT exemption on income from share transfers and capital contribution rights of innovative startups, strongly attracting investment capital for these startups.
• PIT exemption for 2 years and a 50% reduction for the subsequent 4 years for experts and scientists working at innovative startups, research, and innovation centers, attracting high-quality human resources.

Notably, businesses are allowed to deduct up to 20% of their taxable income to establish a fund for science and technology development, innovation, and digital transformation. Simultaneously, 200% of research and development (R&D) expenses are deductible when calculating CIT. This is a powerful push to encourage businesses to invest heavily in R&D, creating new, high-value-added products and technologies, and enhancing international competitiveness.

Additionally, the State supports small, micro, and individual businesses by providing free digital platforms, shared accounting software, and legal, accounting, tax, and human resources consulting services. These supports not only reduce management costs but also improve internal governance capacity, fostering digital transformation – a vital factor for innovative enterprises to thrive in the digital age.

Ms. Le Thuy Duong, Director of a technology startup in Hanoi, shared: “The State’s companionship with businesses through tax incentives and training/consulting support helps us confidently focus on developing core technology. This is the driving force for startups like us to move steadily on the path of innovation, while contributing to enhancing Vietnam’s competitiveness on the regional and global technology map.”

Opportunities And Challenges In Implementation

The National Assembly’s passing of Resolution 198/2025/QH15 is not just an economic decision but also an affirmation of the strategic vision regarding the private sector’s dynamic role in the new growth model. The flexible, focused, and direct tax policy system supporting private enterprises, especially innovative startups and SMEs, serves as a powerful impetus for innovation and sustainable development.

The success of the Resolution largely depends on effective coordination among ministries, sectors, and localities in policy implementation. If implemented synchronously, effectively, and transparently, Resolution 198/2025/QH15 will lay a solid foundation for the emergence of a new generation of businesses – more innovative, more sustainable, and globally competitive.

Finally, businesses need to proactively seize opportunities, enhance management capacity, and innovate technology for sustainable development in a globally competitive business environment. Policy can be a crucial catalyst, but the internal capacity of businesses and the collaboration of management agencies are the decisive factors for the breakthrough development of the private economy and innovative enterprises in the coming period.