Many business households are confused when switching from low revenue to taxable thresholds, especially at the time when revenue exceeds the 500 million VND/year mark. The tax authority has just issued specific instructions to help business households determine the correct declaration time, avoid errors and generate unnecessary obligations.
Declaration from the time of "touching the threshold", no need to redo for a whole year
According to the guidance of the Tax Department, the important principle is to correctly determine the time when revenue exceeds the threshold of 500 million VND/year - the milestone marking the start of tax obligations.
If from the beginning of the year to before the fourth quarter, business households' revenue has not exceeded 500 million VND. By the fourth quarter, total accumulated revenue exceeds the 500 million VND mark. At that time, business households declare tax for the period from the beginning of the year to the end of the fourth quarter - that is, the period reaching the tax threshold.
In other words, business households only need to declare once for the period from the beginning of the year to the time of exceeding the threshold, instead of having to redo all tax obligations annually.
The tax authority emphasizes that business households will declare revenue from the beginning of the year to the quarter that reaches the threshold of 500 million VND - which is the time when tax obligations arise. This helps avoid two common mistakes: Insufficient declaration (only counting quarters exceeding the threshold); Duplicate declaration (both quarterly declaration and additional annual finalization).
Business households are divided into 3 groups to apply taxes
In addition to the 500 million VND mark, the tax authority also guides the classification of business households according to revenue to determine appropriate tax declaration and calculation methods:
Group 1 – Revenue under 500 million VND/year: Not subject to tax
Group 2 – Revenue from 500 million to under 3 billion VND/year: Implement declaration and tax payment according to instructions. Can choose methods suitable for the scale and industry
Group 3 – Revenue over 3 billion VND/year: Apply value-added tax deduction method; Personal income tax calculated at 17% on profit
Important notes for business households
To avoid risks when changing revenue thresholds, business households need to monitor accumulated revenue from the beginning of the year; Accurately determine the time of exceeding 500 million VND; Implement declarations on time, avoid omissions or duplication. In particular, business households need to store full invoices and documents to serve declarations.
