According to information from the Tax Department, the draft Law on Tax Administration, from January 1, 2026, the contract tax method will be officially abolished. Instead, all households and individuals doing business must switch to self-declaration, self-payment of taxes, implement appropriate accounting regimes and use invoices according to regulations.
The tax authority will conduct a post-inspection based on electronic data and actual transactions to verify revenue and determine tax obligations. In case of detecting violations, they will be fined and subject to tax sealing.
According to the new management orientation, the tax sector will classify households and individuals doing business into four groups according to the revenue scale to apply different management methods.
Group 1: revenue under 200 million VND/year - not subject to tax.
Group 2: revenue from 200 million to under 1 billion VND/year.
Group 3: revenue from 1 to 3 billion VND/year (for agriculture, industry, construction) or from 1 to 10 billion VND/year (for trade and service).
Group 4: revenue over 10 billion VND/year.
For groups 1 and 2, the tax authority will encourage the use of electronic invoices. The roadmap for applying invoices with codes or from cash registers for group 2 is expected to be implemented in the period of 20272028. Group 3 and Group 4 will be required to use electronic invoices when retailing.
One of the notable contents in the new tax policy orientation is the proposal to increase the threshold of revenue not subject to VAT and personal income tax from 200 million to 400 million VND/year. This proposal aims to reduce the burden of declaration for micro-business households, while focusing management resources on larger-scale groups.
Regarding accounting regimes, groups 1 and 2 will only need to record simple revenue and expenditure according to the model of the Ministry of Finance. Group 3 applies a simple accounting regime, while Group 4 implements the provisions of Circular 88 on accounting regime for business households and individuals.
