Abolishing fixed tax, business households switch to declaration
On May 17, 2025, the National Assembly passed Resolution 198/2025/QH15 on a number of special mechanisms and policies for private economic development.
Notably, in the policy of supporting taxes and fees, business households and individuals do not apply the tax fixed method from January 1, 2026. Business households and individuals pay taxes according to the law on tax management.
Value-added tax (VAT) threshold for business households from 500 million VND/year or more
In the 2025 Personal Income Tax Law, the National Assembly sets the taxable revenue threshold for business households and individuals to be 500 million VND/year and deducts this level before calculating tax according to the ratio on revenue. At the same time, adjust the corresponding value-added tax-free revenue level to 500 million VND/year.
In addition, supplementing the method of calculating tax on income for households and individuals doing business with revenue over 500 million VND/year to 3 billion VND. Applying a tax rate of 15% similar to the corporate income tax rate for businesses with revenue under 3 billion VND/year. At the same time, stipulating that these individuals are allowed to choose the method of calculating tax according to the ratio on revenue or income.
Thus, from 2026, business households with annual revenue of 500 million VND or less will not have to pay VAT and PIT.
Regarding the progressive tax schedule, the tax schedule has been adjusted in the direction of reducing tax rates in some levels to ensure rationality, avoid sudden increases and create motivation for employees. The tax rate of 15% in level 2 is reduced to 10% and the tax rate of 25% in level 3 is reduced to 20%.
Income of 17 million VND/month not yet subject to personal income tax
The Law on Personal Income Tax (amended) will take effect from July 1, 2026, marking an important adjustment in tax policy, thereby helping to reduce the burden on tens of millions of people with income from salaries and wages.
Notably, the amended law also stipulates contents related to income from business - from salaries and wages of individual residents - which will be applied immediately from the tax period of 2026, i.e. from January 1, 2026.
In which, increasing the family circumstance deduction level for taxpayers themselves and dependents is expected by many workers.
According to new regulations, the deduction level for taxpayers increased from 11 million VND to 15.5 million VND/month, equivalent to 186 million VND/year, and the deduction level for each dependent person increased from 4 million to 6.2 million VND/month.
With the new family circumstance deduction level, individuals without dependents with an income of 17 million VND/month (after deducting compulsory insurance premiums) will be exempt from personal income tax from 2026.
In addition, the amended Personal Income Tax Law also expands the deductible amounts, including charitable and humanitarian contributions and expenses for health, education and training of taxpayers and dependents.
These expenses must fully meet the conditions for invoices and documents as prescribed and must not be paid from other sources.
