Tax exemption for the first 3 years and training cost incentives – how can businesses take advantage?

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In the context of the Government promoting policies to support small and medium enterprises, exemption of business license fees, corporate income tax (CIT) incentives and allowance for calculating training costs into eligible expenses are becoming great advantages to reduce financial burden. Not only helping to optimize tax obligations, these incentives also create conditions for businesses to reinvest in human resources, technology and market expansion. However, to make the most of them, businesses need to understand the regulations, account correctly and apply modern management tools to limit risks.

1. Exemption from business license fees and corporate income tax – what benefits do small and medium enterprises get?

The Government has implemented many tax incentive policies to support small and medium enterprises (SMEs). Specifically:

  • Completely exempt from business license fees from January 1, 2026
  • Exemption from corporate income tax (CIT) for the first 3 years from the date of issuance of the first Business Registration Certificate

These policies directly reduce tax and fee costs, freeing up capital for businesses to invest in human resources, technology and market development. For example, costs for human resources or machinery can quickly be converted into real competitiveness.

2. Training costs are included in eligible expenses.

Personnel training is considered a “difficult to account” cost because it does not generate direct profits. However, the law has allowed staff training costs included in eligible expenses when determining taxable income, provided that the conditions are met.

This has two big benefits:

  • Business no worries about increased tax costs when investing in human resources.
  • Optimized human resource training resources, encouraging businesses to improve the quality of human resources, thereby creating long-term competitive advantages.

For example: A company spends 200 million VND to train management skills for its team of department heads. If there are full valid documents, this expense will be counted as a deductible expense, helping the company reduce taxes while still improving human resource capacity.

3. Conditions and accounting methods

Employee training costs are counted as valid expenses when meeting all conditions prescribed by law and are transparently accounted for. This helps businesses both improve the quality of human resources and optimize tax benefits.

3.1 Conditions for training costs to be included in eligible costs

In order for training expenses to be recognized as valid expenses, businesses need to note the following points:

  • Related to production and business activities: Training content must be appropriate to the profession and job position.
  • Full documents and invoices: Including decision to send to study, training contract, invoice, receipt/payment authorization...
  • Payment via bank with cost from 20 million VND or more: This is a mandatory condition for valid expense calculation.
  • Large costs can be spread over many years: Maximum of 3 years, if the training cost is too high and brings long-term benefits.

3.2 How to account for training costs

Depending on the situation, accountants can make entries:

  • Debit account 642 – Business management expenses (training of management and office staff)
  • Debit account 133 – Deductible VAT (if any)
  • Credit account 111/112/331 – Cash, bank deposits, or accounts payable

If costs arise before the establishment of the business:

  • Record in account 242 (Prepaid expenses) and allocate within 3 years maximum.

Correct accounting helps businesses ensure transparency and avoid the worry of having costs excluded when settling taxes.

4. Cost management, automatic accounting on software

In fact, many small and medium-sized enterprises are still managing costs and accounting using Excel. Although easy to use, this method has many limitations:

  • Easy to make data errors, difficult to control documents: Manual data entry makes it easy to get confused, lose invoices or documents that do not match reality. When the tax authority inspects, businesses are at risk of having their expenses excluded. 
  • Time consuming and resource consuming: Accountants have to spend hours manually entering, reconciling and checking data. This not only slows down the reporting process but also leaves staff with less time to focus on financial analysis and planning. 
  • Difficult to summarize and report when settlement is needed: Due to fragmented and unconnected data, it often takes days to compile data to prepare financial or tax reports. Just one small mistake can cause the entire reporting system to have to be re-edited from scratch.

Cost management & automatic accounting on Bizzi software

Job cost management Manually using Excel often takes accountants and business owners a lot of time to enter data, easily confuses data and makes it difficult to store valid documents. This is a common cause of training costs or valid expenses being excluded when settling taxes.

The solution chosen by many businesses today is Bizzi automatic accounting and cost management software. Not only does it replace manual work, Bizzi also helps businesses take full advantage of tax incentives thanks to:

  • Automatically collect and check electronic invoices from suppliers: Bizzi integrates directly with email, invoice management systems and tax authorities, helping accountants avoid manual data entry. All training and service purchase invoices are automatically stored, ensuring validity when tax authorities check.
  • Synchronize data with accounting software in use: Bizzi does not completely replace the enterprise's accounting system but integrates and synchronizes data. Thanks to that, accountants avoid repeated data entry, saving 70-80% of document processing time.
  • Prepare accurate and timely tax reports: Bizzi automatically aggregates costs, classifies valid and invalid costs according to regulations. When finalizing, businesses immediately have clear and transparent tax reports, minimizing the risk of having training costs or management costs excluded.
  • Improve transparency and financial governance: All cost data is stored centrally and can be looked up instantly. Business owners and accounting departments can easily track cost situations, manage budgets and make timely decisions.

Thanks to the Bizzi application, businesses not only save on management costs but also Make the most of the policies of exemption of business license fees, preferential corporate income tax and valid training costsThis is a strategic step for SMEs to manage their finances systematically, transparently and develop sustainably.

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5. Note to not miss tax incentives

To fully take advantage of tax incentives, especially exemption of business license fees, reduction of corporate income tax and recognition of valid training costs, small and medium enterprises need to pay attention to the following points:

  • Determine exactly when you are tax exempt: The period of exemption from business license fees is usually calculated from the date of issuance of the Business Registration Certificate. If the accountant does not closely monitor this time frame, the business can easily overpay or lose preferential benefits.
  • Keep complete training records: Including the contract signed with the training unit, the list of trainees, the decision to send personnel to participate, payment documents and financial invoices. This is the basis to prove that the training costs are reasonable and valid when the tax authority inspects.
  • Bank payment for expenses over 20 million VND: According to regulations, expenses of 20 million or more must have non-cash payment documents (bank transfer, payment order). If paid in cash, the expense may not be included in the valid expense when settling taxes.
  • Correct accounting account: For training costs, businesses need to record them in business management cost accounts (account 642) or general production costs (account 627) depending on the case. If the costs are large, they need to be allocated reasonably for each period to ensure compliance with accounting standards and avoid sudden increases in costs within a fiscal year.
  • Cost management and accounting software application: Managing with Excel can easily lead to lost invoices, incorrect data entry or omission of valid expenses. Software like Bizzi helps businesses automatically collect and store documents, accurately account for and promptly prepare tax reports, thereby minimizing the risk of losing incentives.

In short, businesses not only need to have a firm grasp of tax regulations but also need to have transparent management mechanism of records, documents and costsThis is the foundation for both complying with the law and making the most of current tax incentives.

Conclude

Policy Exemption from business license fees, preferential corporate income tax and counting training costs as eligible expenses These are practical supports that the State provides for small and medium enterprises. If they know how to take advantage of them, small and medium enterprises will not only reduce their tax burden but also improve their long-term competitiveness.

However, accurate accounting, transparent document storage and scientific cost management are prerequisites. This is also the reason why more and more businesses choose software such as Bizzi to automate cost management and maximize tax benefits.

Experience Bizzi software demo today to optimize cost management, automatic accounting and fully exploit tax incentives for your business.

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