For individual residents
According to Article 7 of the 2025 Personal Income Tax Law, the basis for calculating personal income tax on income from business is as follows:
- Resident individuals with production and business activities with an annual revenue level of 500 million VND or less are not subject to personal income tax. The Government submits to the National Assembly Standing Committee to adjust the revenue level not subject to personal income tax to suit the socio-economic situation in each period.
- Personal income tax on income from business of resident individuals with annual revenue of over 500 million VND is determined by taxable income multiplied by (x) by the tax rate.
Personal income tax = taxable income x tax rate
In which:
(i) Taxable income = revenue from goods and services sold - expenses related to production and business activities in the taxable period
(ii) Individual businesses with annual revenue of over 500 million VND to 03 billion VND: tax rate of 15%;
(iii) Individuals doing business with annual revenue of over 03 billion VND to 50 billion VND: tax rate of 17%;
(iv) Individual businesses with annual revenue of over 50 billion VND: tax rate of 20%.
Income from real estate leasing does not apply the tax calculation method specified in this clause.
- Individuals doing business with annual revenue of 500 million VND to 03 billion VND are allowed to choose to pay tax according to the provisions of points (i) and (ii) or pay tax according to the tax rate multiplied by (x) with taxable revenue. Taxable revenue and tax rate are determined as follows:
+ Taxable revenue is determined by the revenue exceeding 500 million VND;
+ Distribution and supply of goods: tax rate of 0.5%;
+ Services, construction without bidding for raw materials: tax rate 2%. For asset leasing activities, insurance agents, lottery agents, multi-level marketing agents: tax rate 5%;
+ Production, transportation, services associated with goods, construction with subcontracting of raw materials: tax rate of 1.5%;
+ Activities providing digital information content products and services on entertainment, video games, digital films, digital photos, digital music, digital advertising: tax rate of 5%;
+ Other business activities: tax rate of 1%.
- Individuals leasing real estate, except for residential business activities, paying personal income tax is determined by the revenue exceeding 500 million VND multiplied (x) by a tax rate of 5%.
For non-resident individuals
- Personal income tax on income from business of non-resident individuals is determined by revenue from business activities multiplied by (x) with the tax rate.
Personal income tax = revenue from business activities x tax rate
In which:
- Revenue is the entire amount of selling goods, processing money, service provision money including subsidies, surcharges, surpluses that the individual enjoys, regardless of whether money has been collected or not, including costs paid by the buyer of goods and services on behalf of the non-resident individual without reimbursement.
In case the contract agreement does not include personal income tax, the taxable revenue must be converted as the entire amount of money that the non-resident individual receives in any form from the provision of goods and services in Vietnam regardless of the location where business activities are carried out.
- Tax rate:
+ Distribution and supply of goods: 1%;
+ Services, construction without bidding for raw materials: 5%;
+ Production, transportation, services associated with goods, construction with raw material bidding: 2%;
+ Activities providing digital information content products and services on entertainment, video games, digital movies, digital photos, digital music, advertising: 5%;
+ Other business activities: 2%.
