Abolishing lump-sum tax, how much revenue does a business household have to pay tax?

(Dan Tri) - Many business households are wondering how much revenue they will have to pay tax on after the lump-sum tax is abolished and the revenue threshold is required to switch to operating as an enterprise.

From June 1, about 37,000 business households with annual revenue of over 1 billion VND in certain industries (food and beverage, hotels, retail, passenger transport, beauty, entertainment...) must use electronic invoices via cash registers connected to the tax authorities. Instead of paying lump-sum tax, households will have to declare and declare on actual revenue.

Revenue from 100 million VND/year will have to pay tax

According to current regulations, business households with revenue of 100 million VND/year still have to pay 3 types of taxes, including business license tax, personal income tax and value added tax (VAT).

Business license tax is a fixed annual amount, not depending on the business owner's profit, but is determined based on charter capital or revenue.

Business license tax rate (Photo: My Tam).

Personal income tax and VAT will be calculated by the management agency based on total revenue, VAT rate of goods, services and personal income for each business activity.

For example, if an individual distributes or supplies goods, the tax payable = revenue x (1% VAT + 0.5% personal income tax). If the household is engaged in transportation business, the tax rate will be = revenue x (3% VAT + 1.5% personal income tax).

Tax rates by industry (Photo: My Tam).

When must a business household convert into an enterprise?

The Tax Department has not yet issued regulations on conditions and revenue thresholds for business households and individual businesses to convert to private enterprises.

However, Vietnam currently has more than 5.2 million business households, creating 8-9 million jobs, according to the General Statistics Office. Tax authorities recommend that business households with large revenues convert to enterprises to develop their business activities, enjoying tax incentives for newly established enterprises such as exemption of corporate income tax for small and medium enterprises in the first 3 years of establishment.

According to tax experts, if business households intend to become companies, this is considered a favorable time. For example, according to the revised Law on Corporate Income Tax 2025, business households that convert to companies will be exempt from corporate income tax for the first 2 years, then receive a 50% reduction in the next 4 years.

Along with that, in order to support business households, the Ministry of Finance as well as the tax authority said that they have coordinated with associations, organizations, and e-invoice solution providers to provide free shared accounting tools and software, support for equipment and e-invoice service costs in the initial phase.

Tax leaders have repeatedly shared that the tax authority always encourages business households to convert to micro-enterprise models. This will help them receive many support policies and operate transparently and clearly.

According to current regulations in Decree 80/2021, the criteria for micro-enterprises in the fields of agriculture , forestry, fisheries; industry and construction are to employ no more than 10 employees participating in social insurance on average per year and have a total revenue of no more than 3 billion VND per year or a total capital of no more than 3 billion VND per year.

Meanwhile, micro-enterprises in the trade and service sector have the criteria of employing no more than 10 employees participating in social insurance per year on average and having a total annual revenue of no more than 10 billion VND or a total annual capital of no more than 3 billion VND.

Source: https://dantri.com.vn/kinh-doanh/bo-thue-khoan-ho-kinh-doanh-co-doanh-thu-bao-nhieu-thi-phai-dong-thue-20250623002821392.htm