Only businesses with revenue over 200 million/year must pay VAT

    CAO NGUYÊN |

    According to the revised Law on Value Added Tax (VAT), business individuals with annual revenue of less than VND 200 million are not subject to VAT.

    On the afternoon of November 26, the National Assembly passed the Law on VAT (amended) with 407/451 National Assembly deputies in favor, accounting for 84.97% of the total number of National Assembly deputies. This law will take effect from July 1, 2025.

    Before the National Assembly voted to approve, Chairman of the Finance and Budget Committee Le Quang Manh presented a report explaining, accepting and revising the Law.

    Accordingly, there are opinions suggesting to consider and raise the threshold of revenue not subject to value added tax to over 200 million VND. In addition, there are opinions suggesting the level of over or under 300 million VND or 400 million VND for the coming years.

    The National Assembly Standing Committee said that the current law stipulates that the revenue level not subject to value added tax is 100 million VND/year.

    According to calculations by the Ministry of Finance, if the non-taxable revenue level is set at 200 million VND/year, the number of taxable households and individuals will decrease by 620,653 households, and the State budget revenue will decrease by about 2,630 billion VND.

    If the non-taxable revenue is 300 million VND/year, the number of taxable households and individuals will decrease by 734,735 households, and the budget revenue will decrease by about 6,383 billion VND.

    Therefore, to ensure a reasonable increase in the threshold of non-taxable revenue, relatively consistent with the average GDP and CPI growth rate from 2013 to present, the draft Law stipulates a revenue threshold of VND 200 million/year.

    The Government proposes to be assigned the authority to adjust this revenue level in accordance with the socio-economic development situation of each period, to ensure flexibility in management, consistent with the actual situation.

    The Chairman of the Finance and Budget Committee said that this content has been consulted by National Assembly delegates by ballot.

    Accordingly, 204 delegates (accounting for 63.35% of the total number of National Assembly delegates giving opinions) agreed with the regulation "Goods and services of business households and individuals with annual revenue of 200 million VND or less are not subject to tax", as shown in the draft Law that has just been passed.

    CAO NGUYÊN
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