The Ministry of Finance proposed to raise the tax-free revenue level to 500 million VND/year.

The draft Law on Personal Income Tax (replacement) aims to reshape tax policy in a modern direction, suitable for practice and approaching international practices.

According to information from the Ministry of Finance , the Ministry has issued Official Dispatch No. 18491/BTC-CST reporting to Prime Minister Pham Minh Chinh and Deputy Prime Minister Ho Duc Phoc on receiving and explaining the review opinions and opinions of National Assembly Deputies on the Draft Law on Personal Income Tax (amended). One of the important contents mentioned in the dispatch is the proposal on tax for business households and individuals.

Accordingly, regarding personal income tax on business income, based on research, listening to and absorbing the opinions of National Assembly deputies, the Ministry of Finance proposes to adjust the tax-free revenue level to 500 million VND/year (instead of the previous proposal of 200 million VND/year), which is 5 times higher than the level currently applied under the current Personal Income Tax Law. At the same time, this level of 500 million VND/year is also the level deducted before paying tax at the rate on revenue.

According to the Ministry of Finance, with estimated figures that by October 2025 there will be more than 2.54 million regular business households, if this revenue level is applied, it is expected that about 2.3 million business households will not have to pay tax (accounting for about 90% of the total of more than 2.54 million business households).

With this new proposal from the Ministry of Finance, about 90% of business households will not have to pay taxes.

The Ministry of Finance also proposed to supplement the regulation on applying tax calculation based on income (revenue - expenses) for households and individuals doing business with revenue from over 500 million VND/year to 3 billion VND/year to ensure tax collection in accordance with the nature of personal income tax and apply the tax rate of 15% as for enterprises with revenue under 3 billion VND/year as prescribed in the Law on Corporate Income Tax No. 67/2025/QH15.

Accordingly, all business households and individuals must pay taxes based on actual income. If they have little income, they must pay less, and if they have no income, they must not pay taxes. Therefore, the level of tax-free revenue will not have much impact on tax-paying households and individuals. In cases where business households and individuals cannot determine expenses, they must pay taxes based on the percentage of revenue, depending on the industry, for revenue over 500 million VND.

In addition, to ensure consistency in the level of revenue not subject to personal income tax, in the draft law amending the Law on Value Added Tax No. 48/2024/QH15, the Ministry of Finance proposed to increase the level of tax-free revenue of business households and individuals from VND 200 million/year to VND 500 million/year.

To ensure tax payment is simple, especially for individuals whose real estate rental activities are irregular business activities under contracts (except for accommodation business activities), in the draft Law, the Ministry of Finance proposes to stipulate that individuals whose real estate rental activities have annual revenue of over 500 million VND/year will only apply the method of calculating based on the ratio of revenue. Accordingly, there will be no need to determine expenses, no need to offset income (if there is more than 1 real estate for rent), no need to finalize annual tax.

ANH MINH

Source: https://nhandan.vn/bo-tai-chinh-de-xuat-nang-muc-doanh-thu-mien-thue-len-500-trieu-dongnam-post927675.html