Legal Update - May 2025

Minh Thien Law is pleased to introduce our Legal Update summarizing recent notable regulations and legal policies, to which our valued individual and corporate clients might be interested in.

For more information, please contact us at:

▪ Email: info@minhthienlaw.com  ▪ Phone number: 0913 865 900 ; 09 77 33 77 99

▪ Address: Floor 19, Room 1901, Saigon Trade Center, No. 37 Ton Duc Thang, Ben Nghe Ward, District 1, Ho Chi Minh City

A.    AMENDMENT TO TAX PAYMENT METHODS FOR BUSINESS HOUSEHOLDS FROM JANUARY 1, 2026

Under Circular 40/2021/TT-BTC providing guidance on Value Added Tax, Personal Income Tax, and tax administration for business households and individuals, business households can pay taxes using either the declaration method or the lump-sum method.

The declaration method involves tax declaration and calculation based on a percentage of actual revenue generated on a monthly or quarterly basis. The lump-sum method involves tax calculation based on a percentage of the fixed revenue determined by the tax authority to calculate the lump-sum tax amount in accordance with the Law on Tax Administration. The lump-sum tax amount is calculated annually or monthly for seasonal businesses.

However, according to Clause 6, Article 10 of Resolution 198/2025/QH15, it is stipulated that "business households and individuals shall not apply the lump-sum tax method from January 1, 2026. Business households and individuals shall pay taxes in accordance with the law on tax administration."

Therefore, from January 1, 2026, business households will no longer apply the lump-sum tax method and will only apply the declaration method.

B.    PUBLIC CONSULTATION ON THE AMENDMENTS OF THE CONSTITUTION

On April 12, 2025, the Central Executive Committee issued Resolution 60-NQ/TW of the 11th Plenum of the 13th Central Committee of the Communist Party, which includes the policy to amend and supplement certain articles of the 2013 Constitution due to changes in the organization of local government.

Amending the Constitution is a significant matter, and therefore, public consultation may be organized. The National Assembly will decide whether or not to hold a referendum on the Constitution. Formal decisions is expected at the upcoming 9th Session of the 15th National Assembly, scheduled to take place from May 5, 2025, to June 30, 2025.

So, what is a referendum and how is it conducted? A referendum is a process organized by the State for voters nationwide to directly vote by ballot to decide on important national issues. Vietnamese citizens who are 18 years of age or older as of the date of the referendum are considered eligible voters, except for individuals sentenced to death pending execution, individuals serving non-suspended prison sentences, and individuals declared by the Court to have lost civil act capacity, who shall not be registered in the voter list. Referendum voting day is a Sunday, and citizens can vote at their place of permanent or temporary residence.

The results of the referendum shall have decisive value regarding the issue put to the referendum.

C.    TAX SUPPORT POLICIES FOR ENTERPRISES UNDER RESOLUTION 198/2025/QH15

On May 17, 2025, the National Assembly passed Resolution 198/2025/QH15 on special mechanisms and policies for private economic development, which includes various tax support policies for enterprises, specifically:

• Corporate Income Tax (CIT) exemption for two years and a 50% reduction of payable tax for the subsequent four years for income from innovative startup activities of innovative startup enterprises, innovative startup investment fund management companies, and intermediate organizations supporting innovative startups. The determination of the exemption and reduction period shall comply with the law on corporate income tax.

• CIT exemption for income from the transfer of shares, capital contributions, rights to contribute capital, rights to purchase shares, and rights to purchase capital contributions in innovative startup enterprises.

• CIT exemption for SMEs for three years from the date of issuance of their first Enterprise Registration Certificate.

• Training and retraining costs incurred by large enterprises for small and medium-sized enterprises participating in their supply chains shall be included as deductible expenses for CIT calculation.

• Cessation of license fee collection from January 1, 2026.

• Exemption from fees and charges for organizations, individuals, and enterprises for documents that require re-issuance or replacement due to the reorganization or restructuring of state agencies in accordance with legal provisions.

  
  

This Resolution takes effect from the date of its adoption by the National Assembly, which is May 17, 2025. In cases where there are different provisions on the same matter between this Resolution and other Laws or Resolutions of the National Assembly, the provisions of this Resolution shall apply. If another legal normative document provides more preferential or favorable mechanisms and policies than this Resolution, the provisions of that legal normative document shall apply.

D.   PILOT TRANSFER OF AGRICULTURAL LAND FOR COMMERCIAL HOUSING PROJECTS

Resolution 171/2024/QH15 on the pilot implementation of commercial housing projects through agreement on receiving land use rights or having land use rights, effective for five years from April 1, 2025, stipulates that real estate businesses implementing pilot projects meeting the prescribed conditions may receive transfer of land use rights and change the land use purpose for agricultural land to implement pilot projects.

Accordingly, for real estate businesses to receive the transfer of land use rights and change the land use purpose for agricultural land to implement pilot projects, the pilot projects must meet the following conditions:

• The scope of the land plot or parcel for the project must conform to the district-level land use plan or construction plan, or urban plan.

• The scope of the land plot or parcel for the project must conform to the local housing development program and plan that has been approved.

• The scope of the land plot or parcel for the project must be included in the list of land plots expected for pilot projects approved by the provincial-level People's Council.

• There must be written approval from the provincial-level People's Committee for the agreement on receiving land use rights to implement the pilot project for projects where the real estate business receives land use rights, and for projects where the real estate business already has land use rights and receives additional land use rights.

• The real estate business must meet the conditions prescribed by laws on land, housing, real estate business, investment, and other relevant legal provisions.

• In cases where national defense land or security land that has been planned to be removed from national defense or security land is used for the pilot project, it must meet the above conditions and have written approval from the Ministry of National Defense for national defense land or the Ministry of Public Security for security land.

Click to read the Vietnamese version of this article

Read this article as a printed matter: Vietnamese | English

Disclaimer:

This article

• reflects the author's subjective viewpoint on the main topic mentioned in this article, providing the best reference value at the time of publishing;

• is not considered the viewpoint or opinion of any state agency in any case; and

• does not constitute legal advice from Minh Thien Law and should not be applied to resolve any specific legal situation.

For more detailed information, please contact: info@minhthienlaw.com | 09 77 33 77 99 - 0913 865 900