Prior to its abolition from 2026, the business license fee was primarily regulated by the 2015 Law on Fees and Charges, along with its implementing guidelines. Notably, Decree 139/2016/NĐ-CP, which detailed the business license fee, was later amended and supplemented by Decree 22/2020/NĐ-CP. These updates expanded exemption cases and streamlined the collection mechanism.
Decision to Abolish the Business License Fee from 2026
On May 4, 2025, the Politburo issued Resolution 68-NQ/TW on private economic development. Among its solutions to foster private sector growth was the abolition of the business license fee.
Subsequently, on May 17, 2025, the National Assembly officially adopted Resolution 198/2025/QH15, outlining tax and fee support policies to encourage business and production development. Clause 7, Article 10 of this resolution explicitly states: “The collection and payment of the business license fee shall cease from January 1, 2026,” for enterprises, household businesses, individual business owners, and other related entities.
As a result, from January 1, 2026, these entities will no longer be required to declare or pay the business license fee for years 2026 onward. Tax authorities will also stop recording this revenue in the budget.
Direct Financial Impact on Businesses
While the business license fee is not a significant expense compared to total tax costs, its abolition still reduces financial and compliance burdens for businesses.
With the fee typically ranging from VND 2–3 million per year (depending on chartered capital), small, micro, and household businesses can save a fixed annual cost, especially those with multiple branches or locations.
The financial benefit is more pronounced for businesses with multiple dependent units or branches, as each previously incurred a separate license fee if registered with a dependent tax code. Additionally, household and individual businesses, often sensitive to fixed costs, will experience reduced pressure from this fee, regardless of profitability.
Furthermore, abolishing the fee improves short-term cash flow for businesses, particularly those recovering from economic challenges. Eliminating the need to allocate funds for this fee at the beginning of the year allows businesses to better direct resources toward production, debt repayment, or salaries.
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Reducing Administrative Burdens and Compliance Costs
One of the most significant impacts of abolishing the business license fee is reducing administrative burdens for both taxpayers and tax authorities. As an annual fee, it required businesses to declare, track, and reconcile, while tax authorities had to manage and enforce compliance.
Despite simplified declaration forms, businesses still needed to review and determine fee levels based on chartered capital or investment, file initial declarations for new businesses, and adjust for changes. With the fee’s abolition, businesses will save time and accounting costs by eliminating these periodic procedures.
For tax authorities, resources previously allocated to managing, monitoring, and enforcing license fee compliance can now be redirected to core tax administration tasks, enhancing overall efficiency.
Impact on Small and Medium Enterprises, Household Businesses
Resolution 198/2025/QH15 focuses on supporting small and medium enterprises (SMEs) and innovative startups, with the abolition of the business license fee being a key measure. Additionally, Article 10 of the resolution exempts SMEs from corporate income tax for three years from their initial business registration.
For household and individual businesses, the removal of the license fee from 2026 reduces cost barriers to maintaining or expanding formal business operations. Previously, many small-scale households hesitated to register or upgrade to enterprise status due to fears of increased costs and procedures.
The abolition of the fee, combined with corporate income tax exemptions for SMEs, signals a positive shift. This approach aims to broaden the tax base over the long term, rather than focusing on a minor fee that disproportionately affected new business entrants.
Impact on State Budget and Tax Policy
The business license fee represents a small portion of budget revenue, particularly compared to value-added tax, corporate income tax, and personal income tax. Its abolition reflects a policy shift toward reducing “entry fees” for formal business activities, focusing instead on direct taxes tied to production and business results. Rather than collecting fixed fees regardless of profitability, the state aims to derive revenue from taxes that better reflect a business’s financial health and scale, such as corporate income tax and value-added tax.
Practical Considerations for Businesses
Businesses should note several key points during the transition and post-abolition period. They must fully settle all license fee obligations up to the end of 2025, including filing supplemental declarations for any omissions and addressing late payment penalties or administrative violations.
From 2026 onward, businesses should no longer file new license fee declarations or payments. Instead, they should update internal processes to remove fee-related steps, avoiding unnecessary procedures. This includes updating internal tax management software and guidelines to align with the new legal framework.
The abolition of the business license fee from January 1, 2026, marks a significant policy adjustment, reducing costs and administrative burdens, particularly for SMEs, household businesses, and individual entrepreneurs. This move fosters a more transparent business environment, lowers compliance costs, and encourages private sector development.
MSc. Lawyer Huỳnh Thị Mỹ Hằng (Anh Sĩ Law Firm)
– 12:00 25/01/2026
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