According to Article 7 of the 2025 Personal Income Tax Law, resident individuals with production and business activities with an annual revenue 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.
In cases where households and individuals do business with revenue of over 500 million VND to 3 billion VND/year, there are 2 ways to calculate PIT as follows:
Method 1:
Personal income tax on income from business of resident individuals with annual revenue above 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:
- Taxable income = revenue from goods and services sold - expenses related to production and business activities during the tax period
- Individuals doing business with annual revenue above 500 million VND to 03 billion VND: tax rate of 15%;
Method 2:
Individuals doing business with annual revenue over 500 million VND to 03 billion VND are allowed to choose to pay tax in the above-mentioned way or pay tax according to the tax rate multiplied (x) by the taxable revenue.
Personal income tax = taxable revenue x tax rate
Taxable revenue and tax rates are determined as follows:
- Taxable revenue is determined by the revenue exceeding 500 million VND.
- Tax rate:
+ 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%.
The above tax calculation method applies to individual residents.
Taxable income for income from business in 2026
Based on Clause 1, Article 3 of the 2025 Personal Income Tax Law, income subject to PIT from business includes:
- Income from production and business activities of goods and services;
- Income from independent professional activities of individuals with licenses or certificates of professional practice as prescribed by law;
- Income from agency, brokerage, and business cooperation activities with organizations;
- Income from e-commerce business activities, digital platform-based business.
