After abolishing contract tax, the tax sector switched to a business household management model based on revenue threshold and operational development level, including 3 groups.
Group 1 is households with a revenue of VND 200 million/year or less, tax-exempt and not using electronic invoices; Group 2 includes households with a revenue of over VND 200 million to VND 3 billion/year, tax declaration per quarter, applying appropriate accounting regime. In particular, business households with a revenue of over 1 billion VND/year will have to use electronic invoices with codes of tax authorities or electronic invoices generated from cash registers.
Group 3 includes business households with a revenue of over VND3 billion/year, applying a more complete accounting regime, using electronic invoices and tax declarations similar to small businesses.
Assessing the management of business household tax based on revenue, Ms. Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consulting Association, said that in the past, when business households and individuals implemented contract tax, they were not proactive in case of revenue changes. Contract revenue is determined based on the previous year, and only when revenue increases by more than 50% is it adjusted.
Therefore, there are cases where taxpayers forget to adjust, unintentionally leading to tax evasion. According to Article 200 of the Penal Code, tax evasion of VND100 million or more is subject to criminal prosecution, with a very high risk. In addition, there are cases where even without revenue, they still have to pay taxes because they have signed a contract, while with high revenue, there is a risk of tax evasion. This makes business households not proactive.
When switching to the tax declaration regime according to revenue, according to Ms. Cuc, the Ministry of Finance sets revenue thresholds to suit the management method of each group of subjects. For example, households with a revenue of less than VND 200 million are exempted, but if the revenue increases to VND 300500 million in the year, they must re-declare to adjust and pay taxes promptly instead of waiting until the increase is over 50% to declare. This is the factor that helps businesses be more proactive.
Meanwhile, Ms. Le Yen - Director of Hanoi Tax Consulting Company (Hanoi Tax) warned about some risks for group 1, which are business households with a revenue of less than 200 million VND/year. This group is exempt from value added tax and personal income tax. They also do not need to apply complicated accounting books but still have to make periodic declarations.
However, the biggest risk at present is that many households with "wavy" revenue around this threshold are easily transferred without being able to recognize it. When the revenue exceeds 200 million VND/year, the household will automatically switch to group two and must use electronic invoices from the cash register, and must record a complete accounting book according to regulations.
"Many cases still registered in group one, but the actual revenue has increased to group two, causing businesses to violate without knowing it. As soon as the revenue threshold is exceeded, the mandatory regulation will be activated immediately, Ms. Le Yen noted.
Therefore, Ms. Le Yen emphasized that business households need to maintain regular records and monitoring to know when the threshold of 200 million VND/year will be exceeded in order to promptly adjust the tax calculation method. "Not closely monitoring revenue can cause households to be transferred to other groups without being able to prepare in time" - she warned.
