Specifically, based on research, listening to and incorporating the opinions of National Assembly deputies, in order to ensure that the regulations on personal income tax for household and individual businesses are consistent with reality; and to ensure relative fairness with tax collection on other types of income, as well as between individuals who are exempt from tax and those who are required to pay tax, including value-added tax, the Ministry of Finance proposes adjusting the personal income tax on business income from VND 200 million/year to VND 500 million/year. This is also the amount that can be deducted before tax payment based on a percentage of revenue. Based on data up to October 2025, with over a million regular business households, it is projected that approximately 2.3 out of 2.54 million business households will be exempt from tax, accounting for about 90%.
Secondly, regulations should be added for households and individuals conducting business with annual revenue exceeding 500 million VND to 3 billion VND, applying income tax calculation (revenue - expenses) to ensure tax collection in accordance with the true nature of personal income tax, and applying a 15% tax rate similar to the corporate income tax rate stipulated in the Corporate Income Tax Law No. 67/2025/QH15 for businesses with annual revenue below 3 billion VND.
Accordingly, all households and individual businesses pay taxes based on actual income; if they have little income, they pay less, and if they have no income, they pay no tax. Therefore, the tax-exempt revenue threshold will no longer significantly impact taxable households and individual businesses. Only in cases where households and individual businesses cannot determine their expenses will they pay tax based on a percentage of their revenue.
Thirdly, to ensure uniformity in the level of revenue exempt from personal income tax, the draft Law will amend and supplement Clause 25, Article 5 of the Value Added Tax Law No. 48/2024/QH15 to raise the tax-exempt revenue threshold for household and individual businesses from VND 200 million/year to VND 500 million/year.
Regarding this adjustment, many experts believe that this approach is more reasonable, closely adhering to the nature of income tax, and aligning with the trend of reform, simplification of procedures, and increased transparency in tax administration. However, the 500 million VND/year threshold still does not ensure fairness compared to the tax rate for salaried employees and needs to be raised to 1 billion VND/year. Furthermore, it is important to consider tax policies for household businesses in relation to those for enterprises. The tax rate for household businesses should also be designed similarly to ensure equality and reduce tax burden. An unreasonable tax rate will erode profits, making household businesses, already at a disadvantage due to their small scale and limited cash flow, even more vulnerable.
Other opinions also suggest that the proposal to raise the tax threshold for household businesses to 500 million VND/year is a commendable step forward. However, in the context of a volatile economy and numerous business challenges, this level needs careful consideration. In reality, household businesses with annual revenue exceeding 500 million VND but still incurring losses will still have to pay taxes based on their revenue. A business household may achieve an annual revenue of 500 million VND but only earn a few tens of millions of VND in profit after deducting expenses. Therefore, it is advisable... Consider raising the tax threshold for household businesses even higher or designing a more flexible calculation method. Additionally, there needs to be a mechanism to update the tax threshold annually according to economic fluctuations; it shouldn't remain fixed for too long.
Not long ago, when explaining the draft law, Minister of Finance Nguyen Van Thang acknowledged that tax policies related to household and individual businesses are extremely difficult and complex. He stated that the revenue threshold must be recalculated so that household businesses do not feel disadvantaged compared to the tax threshold for salaried employees. Therefore, raising the taxable revenue threshold for household businesses is necessary. More importantly, the amendment to the law must create a fair and equitable legal framework that is consistent with practical conditions to promote development.
Source: https://daibieunhandan.vn/cach-tiep-can-da-hop-ly-hon-10399439.html
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