VAT and personal income tax rates of raw material processing business households
Business households have questions about the subjects subject to VAT and personal income tax when processing raw materials and transferring them to the company's kitchen.
The above specific business household cases are as follows:
"My family registered a business household, specializing in purchasing meat, fish, vegetables, and tubers to prepare and then transfer to the company's kitchen. The main processing process for fish is cleaning (scalping, cutting heads, removing intestines, removing carry), for vegetables is cutting corners, peeling.
After processing, the amount of goods sold has decreased compared to when imported, for example, after buying 100 kg of fish to clean, the remaining 95 kg is then returned to the company's kitchen. In addition, according to the company's order, the business household will buy and deliver some other groceries such as sugar, seasoning beans, soy sauce, fish sauce, etc.
In the above case, how much percentage of a business household is considered subject to VAT and personal income tax?
The Ministry of Finance answers
Regarding the value-added tax (VAT) and personal income tax (PIT) policies for business households:
Pursuant to the provisions of Clause 25, Article 5, Point b, Clause 2, Article 12, Clause 1, Clause 2, Article 18 of Law on Value Added Tax No. 48/2024/QH15.
Based on the guidance in the Appendix to the group of goods and services subject to the VAT calculation rate as prescribed in Point b, Clause 2, Article 12 of the Law on Value Added Tax issued with Circular No. 69/2025/TT-BTC dated July 1, 2025 of the Minister of Finance detailing a number of articles of the Law on Value Added Tax and guiding the implementation of Decree No. 181/2025/ND-CP dated July 1, 2025 of the Government detailing the implementation of a number of articles of the Law on Value Added Tax.
Pursuant to the guidance in Clause 2, Article 4 and Clause 2, Article 10 of Circular No. 40/2021/TT-BTC dated June 1, 2021 of the Minister of Finance guiding VAT, personal income tax and tax management for business households and individuals.
Pursuant to the above regulations: In case a business household has a revenue from production and business activities in the calendar year of VND 100 million or less, it is not required to pay VAT and personal income tax according to the provisions of law on VAT and personal income tax.
In case a business household has a revenue subject to tax, the VAT rate and the personal income tax rate shall be applied in detail according to the instructions in the Appendix issued with Circular No. 69/2025/TT-BTC and Circular No. 40/2021/TT-BTC.
