Pursuant to Clause 1, Article 3 of the Law on Personal Income Tax 2007 amended by Article 17 of the Law on Value Added Tax 2024, the taxable subjects are as follows:
Taxable income
Personal income taxable income includes the following types of income, excluding tax-exempt income as prescribed in Article 4 of this Law:
1. Income from business, including:
a) Income from production and trading of goods and services;
b) Income from independent practice activities of individuals with a license or practice certificate as prescribed by law.
The income from business specified in this clause does not include the income of households and individuals producing and trading with revenue below the level specified in Clause 25, Article 5 of the Law on Value Added Tax.
Clause 25, Article 5 of the Law on Value Added Tax 2024 stipulates as follows:
Subjects not subject to tax
25. Goods and services of households and individuals produced and traded with annual revenue of VND 200 million or less; assets of non-business organizations and individuals, not paying value added tax sold; national reserve goods sold by the national reserve agency; fees and charges collected according to the provisions of law on fees and charges.
Article 18 of the Law on Value Added Tax 2024 stipulates:
Implementation effectiveness
1. This Law takes effect from July 1, 2025, except for the case specified in Clause 2 of this Article.
2. Regulations on the revenue level of households and individuals producing and trading subjects not subject to tax in Clause 25, Article 5 of this Law and Article 17 of this Law take effect from January 1, 2026.
In the Project issued with Decision 3389/QD-BTC recently, the Ministry of Finance divided business households into 03 new tax management groups, detailed as follows:
Group 1: Revenue under 200 million VND/year
- Exemption from value added tax and personal income tax.
- It is not mandatory to apply complex accounting books, but they must still be periodically declared.
- You can choose to declare 02 times/year ( beginning and mid-year or end of year) or choose the right time.
Thus, from the above regulations, it can be understood that:
- Before December 31, 2025, business households with a revenue of less than VND 100 million/year will not have to pay VAT and personal income tax;
- From January 1, 2026, business households with a revenue of less than VND 200 million/year will be exempt from VAT and personal income tax.
