In the Draft Decree Regulating the declaration, calculation, tax deduction, tax payment, and use of electronic invoices for business households and individuals doing business for the 2nd time, the Government proposes as follows:
Article 8. Principles of declaration, calculation of tax and use of invoices
1. For value-added tax, personal income tax:
a) In case business households and individual businesses self-determine that they have annual revenue from production and business activities of goods and services from 500 million VND or less, business households and individual businesses shall notify the tax authority of actual revenue arising in the year no later than January 31 of each year.
b) In case business households and individual businesses determine that annual revenue from production and business activities of goods and services is over 500 million VND, business households and individual businesses self-determine the amount of value-added tax and personal income tax to be paid according to the provisions of law on value-added tax and personal income tax as prescribed in Articles 3, 4, 5, and 6 of this Decree.
c) In cases where business households and individuals use electronic invoices, electronic invoices generated from cash computers connected to tax authorities, the tax management information system automatically creates tax declarations to support business households and individuals in declaring value-added tax, personal income and calculating value-added tax, personal income on the basis of electronic invoice data, tax management data and other data sources that tax authorities obtain from other state agencies, organizations, and individuals.
In case of not using electronic invoices, business households and individuals determine the amount of tax to be paid according to regulations.
Thus, according to the above Draft, if self-determined business households and individuals have annual revenue from production and business activities of goods and services from 500 million VND or less, business households and individuals shall notify the tax authority of actual revenue arising in the year no later than January 31 of each year.
Recently, Grassroots Tax No. 4 under Gia Lai Provincial Tax has issued guidelines for business households with revenue of less than 500 million VND/year. In which, it clearly states 04 things business households under 500 million VND need to do to avoid tax risks as follows:
(1) Notice of actual revenue on time
Based on Clause 2, Article 4 of Circular 40/2021/TT-BTC, it is stipulated:
Business households and individuals with revenue from production and business activities in the calendar year from 100 million VND or less are not subject to VAT and are not subject to PIT according to the provisions of law on VAT and PIT. Business households and individuals are responsible for accurate, truthful, and complete tax declaration and timely payment of tax dossiers; and are responsible before the law for the accuracy, truthfulness, and completeness of tax dossiers as prescribed.
However, from 2026, the revenue threshold for personal income tax and VAT exemption will be adjusted from 100 million to 500 million VND/year.
Although they are exempt from paying VAT and PIT, business households and individuals with revenue of less than 500 million VND are still responsible for tax declaration and submitting tax dossiers on time according to regulations.
Accordingly, business households must make a notice once a year (usually before January 31 of the following year) so that the tax authority has a basis to confirm that business households are tax-exempt.
(2) Recording and storing minimum documents
(3) Business registration and tax code
(4) Closely monitor revenue when issuing invoices
Thus, business households with revenue from 500 million VND or less are not required to pay PIT and VAT. Therefore, business households need to closely monitor actual revenue. If they exceed this threshold without timely declaration, business households will face unintended tax arrears and fines.
