Supplementing regulations for business households with revenue of over 500 million to 3 billion VND/year
Recently, the Ministry of Finance has proposed regulations for households and individuals with a revenue of over VND500 million/year to VND3 billion/year to apply tax according to income (revenue - expense) to ensure tax collection in accordance with the nature of personal income tax. At the same time, a tax rate of 15% is applied similar to the corporate income tax rate prescribed in the 2025 Corporate Income Tax Law for enterprises with a revenue of less than VND3 billion/year.
Accordingly, all households and individuals doing business pay taxes based on actual income, if they have low income, they pay low, and even if they do not have income, they do not have to pay taxes.
Therefore, the level of non-taxable revenue will no longer have much impact on households and individuals doing business that have to pay taxes. In case the business household or individual cannot determine the cost, they will pay tax according to the rate on revenue.
According to the Project issued with Decision 3389/QD-BTC, business households have been divided into 03 new tax management groups, specifically as follows:
Group 1: Revenue under 200 million VND/year
- Exemption from value added tax and personal income tax.
- It is not mandatory to apply complex accounting books, but they must still be periodically declared.
- You can choose to declare 02 times/year ( beginning and mid-year or end of year) or choose the right time.
Group 2: Revenue from 200 million to under 3 billion VND/year
This group is required to pay taxes directly as a percentage of revenue, and can voluntarily register for the deduction method if eligible.
Accordingly:
VAT payable = revenue x percentage; VAT payable = output VAT - input VAT deducted. Pending personal income tax = revenue x percentage.
Different businesses will have different tax rates:
+ 1%: Distribution and supply of goods
+ 3%: Production, transportation, services associated with goods, construction with material bidding
+ 5%: Services and construction do not include material bidding
+ 2%: Other business activities
This group of business households makes quarterly declarations (4 times/year) and year-end settlements. If you have a revenue of over 1 billion VND and sell directly to consumers, it is mandatory to use electronic invoices generated from cash registers. Business households must open their own accounts for business, be supported with free accounting software, legal advice and instructions on using electronic invoices.
In case the revenue is over 3 billion VND for 2 consecutive years, the business household will switch to applying it as group 3 from the following year.
For example: Small grocery business household has a revenue of 600 million VND/year. The tax calculation is as follows:
VAT: 600 million VND x 1% = 6 million VND
personal income tax: 600 million VND x 0.5% = 3 million VND
Thus, the total tax that grocery business households must pay in 2026 is 9 million VND.
Group 3: Revenue over 03 billion VND/year
This is a group that applies the same deduction and management method as micro and medium enterprises. In which, business households will pay VAT payable = output VAT - input VAT deducted.
Pending personal income tax = taxable income x 17%, of which taxable income = reasonable revenue - expenses.
Business households and individuals will declare monthly or quarterly, depending on the scale and annual settlement and are required to use electronic invoices with codes or electronic invoices generated from cash registers, open separate accounts and implement accounting regimes like businesses.
For example: A mechanical workshop has a revenue of 4 billion VND/year, the reasonable cost is 3.2 billion VND. The tax calculation is as follows:
VAT is calculated by deduction method: Suppose the mechanical industry applies a VAT rate of 10%.
Output VAT: 4 billion VND x 10% = 400 million VND. For example, input VAT is 250 million VND from material purchases. VAT payable = 400 - 250 = 150 million VND.
personal income tax: How to calculate personal income tax = Revenue - cost = 4 billion VND - 3.2 billion VND = 800 million VND. The expected tax rate is 17%. personal income tax: 800 million VND x 17% = 136 million VND.
Thus, the mechanical workshop must pay 150 million VND in VAT and 136 million VND in personal income tax. The total tax payable in 2026 is 286 million VND.
