Clause 6, Article 10 of Resolution 198/2025/QH15 stipulates that from January 1, 2026, business households and individuals will no longer apply the tax contract method, but must pay taxes according to the provisions of the law on tax management.
This means that from the above time, all business households must switch to the tax declaration method, instead of the previous method of calculating contract tax.
Below are details of the 8-step process of converting from a contract business household to a tax declaration business household:
Step 1: Business households submit conversion documents to the Tax Authority to carry out procedures for converting tax calculation methods from the contract method to the declaration method using Form 08-MST issued with Circular 86/2024/TT-BTC.
Step 2: The business household must make a record of all inventories (both goods with invoices and without invoices) as a basis for including in the inventory data at the beginning of the bookraising period.
Step 3: Business households are required to use electronic invoices when they have registered for the declaration method:
- If selling directly: Business households register to use electronic invoices generated from cash registers.
- If doing business in services or selling wholesale: Business households register for electronic invoices (common sales invoices).
Step 4: The business household is equipped with accounting software for the business household to declare or can do it yourself on Excel if you are familiar with the profession.
Step 5: Organize and implement the construction of a system of books, recording 7 types of compulsory accounting books according to the provisions of Appendix 2 of the form and accounting method issued with Circular 88/2021/TT-BTC.
Step 6: Business households shall declare taxes monthly or quarterly by tax declaration according to Form 01/CNKD issued with Circular 40/2021/TT-BTC.
Appendix to the Business Activities List for the period of business household according to form No. 01-2/BK-HDKD issued with Circular 40/2021/TT-BTC (if there is a basis to determine revenue according to confirmation by the competent authority, it is not necessary to submit this Appendix).
Step 7: The business household opens a separate bank account, separating it from the personal account to supplement the business household's operations to declare.
Step 8: The business household registers and pays full social insurance to employees (if any) and pays to the business household owner.
Note: When a business household has officially paid tax according to the declaration method, it is mandatory to have full invoices and valid documents for both goods and services purchased and sold.
