Ministry of Finance calculates to increase tax-free revenue for business households to 500 million/year

The Ministry of Finance has proposed to adjust the tax-free revenue from VND200 million/year to VND500 million/year. It is expected that about 2.3 million business households will not have to pay tax.

It is expected that 2.3 million business households will not have to pay taxes.

The Ministry of Finance has just issued a report on receiving and explaining the opinions of the National Assembly deputies on the draft Law on Personal Income Tax (amended).

The Ministry of Finance said that, based on listening to and absorbing the opinions of National Assembly deputies, in order for the content of regulations on personal income tax (PIT) for households and individuals doing business to be consistent with reality, ensuring relative fairness in the collection of PIT on other types of income (including income from salaries and wages) between individuals doing business that do not have to pay and individuals doing business that have to pay tax, including value added tax, the Ministry of Finance reported the revised content on PIT on income from business.

Specifically, regarding the tax-free revenue level, the Ministry of Finance proposed to adjust from 200 million VND/year to 500 million VND/year. At the same time, this 500 million VND/year level is also the level deducted before paying tax according to the rate on revenue.

The Ministry of Finance proposed adjusting the tax-free revenue level from VND200 million/year to VND500 million/year. Photo: NL

When applying this revenue level, the Ministry of Finance said it is expected that about 2.3 million business households will not have to pay tax, accounting for about 90% of the total 2.54 million business households (according to data as of October 2025).

Supplementing regulations for business households and individuals with revenue from over 500 million VND/year to 3 billion VND/year, apply tax calculation based on income (revenue minus expenses) to ensure tax collection in accordance with the nature of personal income tax. Accordingly, apply a tax rate of 15% similar to the corporate income tax rate prescribed in the Corporate Income Tax Law No. 67/2025 for enterprises with revenue under 3 billion VND/year.

All business households and individuals pay taxes based on actual income. If they have little income, they pay less, and if they have no income, they do not have to pay taxes. Therefore, the level of revenue that is not subject to tax will not have much impact on taxable business households and individuals. In case the business households and individuals cannot determine the expenses, they will pay taxes based on the percentage of revenue.

To ensure consistency in the level of revenue not subject to personal income tax, this draft law will amend and supplement the Law on Value Added Tax No. 48/2024 to increase the level of tax-free revenue of business households and individuals from VND 200 million/year to VND 500 million/year.

Particularly for individuals whose real estate rental activities are irregular business activities under contracts (except for accommodation business activities), to ensure tax payment is simple, the draft law stipulates 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.

Reduce tax rates and tax brackets on income from salaries and wages

Also in the report on explanation and acceptance, the Ministry of Finance said that it had reviewed and adjusted the progressive tax schedule (applied to income from salaries and wages). Accordingly, it reduced the number of levels from 7 to 5, widened the gap between the levels and readjusted the 2 tax rates of the tax schedule. This adjustment is to reduce the tax rate for all individuals paying taxes at all levels compared to the current level, overcoming the sudden increase between tax levels.

Specifically, reduce the tax rate from 15% (at level 2) to 10% and the tax rate from 25% (at level 3) to 20% as follows:

The latest plan of the Ministry of Finance is to adjust the tax rate and tax bracket. Screenshot

In response to comments and contributions, to ensure the National Assembly's authority to regulate the basic content of taxes as stipulated in the Constitution, the Ministry of Finance would like to revise the draft Law in the direction of including family deductions in the law.

At the same time, the Government is assigned to submit to the National Assembly Standing Committee to adjust this family deduction level based on fluctuations in prices and income to suit the socio -economic situation in each period.

Calculating income tax for business households: Proposal to reduce tax rates The Ministry of Finance has proposed a mechanism to calculate personal income tax for business households based on income. Experts consider this a reasonable direction, but note that if the tax rate is not appropriate, it will "eat into profits", causing difficulties for business households.

Source: https://vietnamnet.vn/bo-tai-chinh-tinh-toan-nang-doanh-thu-mien-thue-ho-kinh-doanh-len-500-trieu-nam-2467662.html