Apply 17% tax if business household revenue exceeds threshold for 2 consecutive years

Business households with revenue of over 3 billion VND/year must pay 17% personal income tax on profits from January 1, 2026. Photo: Thanh Binh

Accordingly, the project "Converting tax management models and methods for business households when eliminating lump-sum tax" clearly summarizes 3 groups of business households and new points in converting tax calculation methods after eliminating lump-sum tax.

With group 1 being the Business households with revenue under 200 million VND/year . This group is exempt from paying value added tax (VAT) and personal income tax (PIT) (the old regulation is 100 million VND/year).

In addition, group 1 will not need to apply complex accounting books but still have to make periodic declarations. Business households can choose the appropriate time to declare twice a year, which can be at the beginning of the year or in the middle/end of the year.

Group 2 is the Business households with revenue from 200 million to less than 3 billion VND . The Ministry of Finance 's project clearly states that this group applies the method of calculating direct tax on revenue like the current one. Tax rates by industry are clearly classified: Distribution of goods 1.5%, production, food services 4.5%, other services 7%, property leasing is 10%,...

The Ministry of Finance's regulations also create conditions for group 2 not to comply with complicated accounting regimes, but still have to keep simple books with prescribed forms. However, business households must declare taxes 4 times/year (quarterly) instead of paying taxes by lump-sum method as before.

In this group, if a business household has a revenue of over 1 billion VND/year and belongs to the retail industry, direct services to consumers according to the provisions of Decree 70 of 2025 must issue electronic invoices from cash registers connected to the tax authority.

Other businesses under 1 billion VND/year are not required to issue invoices, but the Ministry of Finance notes that they should still record revenue.

For the Business households with revenue of over 3 billion VND/year for 2 consecutive years based on monitoring by tax authorities will be transferred to group 3 in the 3rd year.

Group 3 is businesses with revenue of over 3 billion VND/year. For this group, the authorities have specific requirements as follows:

Firstly, it is mandatory to apply the VAT deduction method including: Output VAT - Input VAT equals VAT payable.

Personal income tax is calculated at 17% of total profit, where Profit = revenue minus reasonable expenses.

Second, regarding the declaration method. For revenue over 50 billion VND/year, business households declare monthly. For revenue under 50 billion VND, business households declare quarterly.

Third, it is mandatory to issue invoices (whether from a cash register or by other means).

Fourth, it is mandatory to open a separate bank account for business purposes.

According to the Ministry of Finance, the number of business households continues to increase, in 2024 the country will have about 3.6 million households and individuals doing business (equivalent to 106% of 2023). The number of stable business households (including contracted and declared households) is 2.2 million, an increase of 4% compared to 2023.

Notably, the number of households with revenue above the tax threshold (over 100 million VND/year) is 1.3 million households, accounting for 59% of the total number of business households.

Source: https://baoquangninh.vn/ap-thue-17-neu-doanh-thu-ho-kinh-doanh-vuot-nguong-2-nam-lien-tiep-3379837.html