The roadmap to eliminate contract tax and switch to declaration according to actual revenue from 2026 is entering the final preparation stage. Although the administrative penalty framework for business households has not changed, management increasingly based on declaration, invoices and comparison data is causing many business households to worry about "fines" if they continue to maintain the old approach.
In fact, the violations of business households are still being handled according to current sanctions decrees, there is no regulation on increasing fines. However, when the management mechanism switches to data-based, errors that were previously less noticed are now more easily detected and handled.
Business registration: not ignored for low revenue
According to current regulations, business registration is a mandatory requirement, regardless of the scale or level of revenue. Whether or not there is a tax payment obligation does not change the requirement to register and update registration information.
In fact, many businesses start with a small scale, then expand their businesses, relocate or increase the scope of operations but have not yet completed the procedures to register for changes. When business registration data is compared with tax and actual performance data, these deviations are easily detected and administrative violations are handled.
However, many cases are punished not for tax evasion, but because their actual activities do not match the registered information, even when the revenue is low.
Tax declaration: no more "measurement" of revenue
When switching from the contract tax mechanism to declaration according to actual revenue, the revenue of business households is no longer determined according to the estimate. Instead, revenue must be declared based on data generated during the business process, as a basis for management agencies to monitor and compare.
This requires business households to fully record all revenues, including small transactions. Declaration of lack of revenue, omission of transactions or inconsistent records can be determined as not fulfilling the declaration obligation.
Note: the declaration obligation does not depend on whether the tax payable is arising or not. In case of low revenue, not subject to tax but not declared according to regulations, business households can still be administratively sanctioned for violations.
Bills: Selling invoices is increasingly risky
According to current regulations, business households are obliged to make invoices when selling goods and providing services, except in cases permitted by law. In the new management mechanism, invoices become an important basis for determining actual revenue.
However, many households still maintain the habit of only making invoices when customers request or ignoring small transactions. When invoice data is used to compare with revenue declaration, sales without invoices with potential risks are discovered to be higher.
Behaviors such as not making invoices when a transaction arises, making invoices at the wrong time or not reflecting the correct transaction value can all be punished, regardless of the scale or revenue level.
Low revenue does not mean it is not managed
A common misunderstanding is that if revenue is low, there is no need to pay attention to management procedures. In fact, the law clearly distinguishes between tax payment obligations and obligations to comply with management. Not having to pay taxes does not mean being exempted from registration, declaration exemption or invoice execution exemption.
Many cases of being fined in the past do not stem from tax evasion, but due to not registering a business, not declaring or violating regulations on invoices - violations that are procedural but easily detected when managing based on data.
Transition period: No need to wait until 2026
From now until the new management mechanism is fully applied, it is considered a time for businesses to proactively review and adjust operations, instead of waiting until the regulations take effect to handle them.
During this period, re-checking business registration documents, forming a habit of recording full revenue and issuing invoices according to regulations will help business households significantly reduce the risk of arising procedural violations. This is also the time to get used to the new management method, avoiding confusion when the new mechanism comes into play.
In reality, many cases were punished not for tax evasion, but for shortcomings in registration, declaration or invoices. Therefore, early preparation in the transition period is considered the most effective way to limit unnecessary fines when entering 2026.
