Warning about the risks of splitting a business to "evade" taxes.

According to Decree No. 141/2026/ND-CP dated April 29, amending and supplementing several articles of Decree No. 68/2026/ND-CP regulating tax policies for business households and individual businesses, and Decree No. 320/2025/ND-CP detailing several articles and measures to organize and guide the implementation of the Corporate Income Tax Law, the revenue threshold for business households exempt from personal income tax and value-added tax has been raised to VND 1 billion instead of less than VND 500 million. The new revenue threshold will be applied from January 1, 2026.

Tax officials guide business owners in switching from lump-sum tax to declaration-based tax. Photo: PV

Raising the tax exemption threshold for household businesses to 1 billion VND/year, while positive in nature, may still give rise to some noteworthy side effects during implementation.

In reality, with the new regulations, it is possible that households with revenue exceeding 1 billion VND may split into smaller households, such as husband and wife registering under separate names but still operating businesses at the same location, or registering under multiple names to disperse revenue in order to bring the revenue of each household down below 1 billion VND to benefit from tax exemption policies.

The tax authorities note that if the separation of a business household results in genuine independence in terms of location, assets, capital, business operations, revenue, expenses, and legal responsibilities, the law will still recognize it. However, if the separation is only on paper but the business operation remains a single entity, this is a sign of risk and may be subject to inspection and penalties according to regulations.

Speaking with reporters from the Hanoi Press and Broadcasting Agency, the Chairwoman of the Vietnam Tax Consulting Association, Nguyen Thi Cuc, stated that with digital management, the application of information technology, e-commerce, artificial intelligence, and data connectivity between business households, business registration accounts, business locations, and production costs, tax authorities are able to inspect and control these cases.

The consequences of tax evasion are very serious. Evading taxes of 100 million VND or more can lead to criminal prosecution, not only in the form of administrative penalties for tax violations but also potentially imprisonment. Therefore, Ms. Nguyen Thi Cuc recommends that people strictly adhere to the policies.

“The government has created favorable conditions, such as raising the taxable revenue threshold for household businesses from 100 million VND to 500 million VND and currently to 1 billion VND. Many cases are exempt from tax. Therefore, people need to work together to fulfill their tax obligations,” said Ms. Nguyen Thi Cuc.

According to the Chairman of the Vietnam Tax Consulting Association, the State has created conditions to reduce administrative procedures and tax obligations for citizens in order to better support compliance with the law. However, fairness must still be ensured between those who comply with the law and those who evade taxes. Therefore, the handling of tax violations will be increasingly strengthened to ensure deterrence.

Source: https://hanoimoi.vn/canh-bao-rui-ro-tach-ho-kinh-doanh-de-ne-thue-748859.html