On the morning of December 10, at the 10th session, the National Assembly voted to pass the Law on Personal Income Tax (amended), with the majority of delegates participating in the vote in favor.
The law takes effect from July 1, 2026, except for regulations related to income from business, from salaries, and wages of residential individuals applied from the tax calculation period in 2026.
Clause 1, Article 7 of the Law recently passed by the National Assembly stipulates that individuals residing in a production and business household with an annual revenue of VND500 million or less do not have to pay personal income tax.
Thus, the Government has adjusted the taxable revenue from 200 million VND/year to 500 million VND/year. At the same time, this rate of VND 500 million/year is also the rate deducted before paying tax according to the rate on revenue.
According to the Government, in case a household or individual distributes or supplies goods with a revenue of VND 1 billion/year and cannot determine the cost, it is only necessary to pay personal income tax for the excess of VND 500 million with a tax rate of 0.5%, meaning the tax payable is (1,000-500) x 0.5% = 2.5 million VND/year.
Applying this revenue level, according to current data managed by the tax sector, as of October-October 2025, there are more than 2.54 million households doing regular business (including households and individuals doing business that are still implementing the contract method, some households and individuals are implementing the declaration).
It is expected that about 2.3 million business households will not have to pay taxes (accounting for about 90% of the total of 2.54 million business households).
According to the tax authority's estimate, the total tax reduction (including personal income tax and VAT) is about 11,800 billion VND.
In addition, the Law also adds a regulation for households and individuals doing business with a revenue of over VND500 million/year to VND3 billion/year to apply tax according to income (revenue - expense) to ensure tax collection in accordance with the nature of income tax and apply a tax rate of 15% similar to the corporate income tax rate for enterprises with a revenue of less than VND3 billion/year.
The Government's report on receiving, explaining, revising and perfecting the draft Law clearly states: All households and individuals doing business pay taxes based on actual income, if they have a large income, they pay a lot of tax, if they have a small income, they pay a little, if they do not have income, they do not have to pay tax.
In addition, these individuals are also allowed to choose the method of calculating tax based on the ratio on revenue.
The Government affirmed that by adjusting the threshold of non-taxable revenue to VND 500 million and raising the non-taxable VAT revenue to VND 500 million, and at the same time deducting VND 500 million from pre-taxable revenue, adding the method of calculating tax based on income (revenue - cost) for business households and individuals, the Law has created a fair and equal legal corridor, in accordance with the business conditions of business households and individuals. Thereby, supporting individuals to feel secure in production and business to stabilize their lives and develop production and business.
In addition, for individuals who are engaged in real estate leasing activities, which are business activities that are not regularly leased under contracts (except for accommodation business activities), to ensure tax payment is simple, the Law stipulates that individuals with real estate leasing activities with annual revenue of over VND500 million/year will only apply the method of calculating the ratio on revenue, thereby not having to determine costs, not having to settle annual taxes.
The newly passed law has provisions to amend and supplement the Law on VAT, raising the non-taxable revenue of households and individuals doing business from 200 million VND/year to 500 million VND/year to ensure consistency and unity in the revenue level that does not require personal income tax.
