Services and contract manufacturing: 30% tax relief from contract review to finalization

1. Cash receipts are not a substitute for annual revenue

Marketing, design, repair and manufacturing contracts often involve deposits, delivery, acceptance, invoicing and later collection. Record these milestones by contract. Advances, receivables and recognized revenue can differ, so bank inflows alone are not a sufficient basis.

This guide organizes records for Decree 398 relief; it does not prescribe one recognition date or tax rate for every service. Determine the applicable treatment from the contract, activity and tax method. The 30% reduction follows the proper calculation of eligible tax.

2. Review services, goods and supported reimbursements separately

Agencies should distinguish management fees, design, content production, ad budgets and contractual reimbursements. Client-funded ad spend is not automatically outside revenue. Review account ownership, supplier invoices, contractual responsibilities and authorization documents.

Repair and manufacturing operators should distinguish their own materials from customer-supplied materials, labor charges, completed goods and returns. Reconcile delivery records, acceptance documents and invoices. This prepares evidence; it does not authorize excluding receipts from the statutory ceiling.

3. Check receivables and the revenue ceiling

Illustration: a service company has VND 9.6 billion of revenue determined under applicable rules, including VND 0.8 billion uncollected, plus VND 0.2 billion of financial revenue and other income. The total is VND 9.8 billion, not VND 9 billion merely because part remains unpaid. Check all other conditions before calculating relief.

If another VND 0.3 billion belongs to the year, the total becomes VND 10.1 billion and eligibility must be reassessed. Do not manipulate invoice timing, split contracts or divert receipts to reduce reported revenue. Review the correct period, correct errors transparently and plan for additional tax.

4. Calculate relief on tax, not revenue

Separate illustrative household-business example: properly determined annual revenue is VND 6 billion and all conditions are met. Business PIT before relief is VND 80 million. Relief is 80 × 30% = VND 24 million; the remainder is VND 56 million. This does not imply a standard tax rate for the sector.

Companies apply 30% to CIT payable after any other tax incentives. Salary PIT, VAT and other obligations do not automatically receive this reduction. Where eligible tax is zero, this calculation produces no relief and no cash grant.

5. Choose the correct filing route and retain receipts

Business individuals review Form 01 with the applicable return. Withholding or filing agents use Form 02 for their responsibilities. Companies self-determine relief when making quarterly CIT payments; the individual’s Form 01 is not a company CIT-relief form.

Suggested workflow: close the period, assess eligibility, calculate tax before relief, calculate relief, check official forms, file through the applicable electronic tax channel, and retain signed files, acknowledgements and payment evidence. These are working steps, not universal portal button names. Review amendment rules for missed relief rather than arbitrarily deducting it from a later payment.

6. Monitor the ceiling and prepare the evidence pack

Individuals exceeding VND 10 billion actual annual revenue reverse relief using Form 03 with the filing for the threshold-crossing period. The specified late-payment exclusion ends at that period’s filing deadline. Companies pay the shortfall and follow Article 24(3) of Decree 252/2026/ND-CP rather than assuming the individual rule applies.

Assign someone to update monthly cumulative revenue and outstanding orders or contracts, with a review date. Retain source records, calculations and reconciliations for independent review. The following is a recommended internal evidence pack, not a universal mandatory attachment list.

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