The tax-free threshold has been officially raised to 500 million VND per year.

(HTV) - The personal income tax threshold for individual business households has officially been raised from 100 million to 500 million VND per year. This new policy is expected to reduce the tax burden for millions of small-scale business households.

The tax threshold for individual business households has been officially adjusted upwards from 100 million VND/year to 500 million VND/year. At Binh Tien Market, which has approximately 370 business households with over 500 stalls, the market management board stated that more than 90% of the traders there fall within the revenue threshold that exempts them from paying taxes.

Ms. Tran Thi Thu Ha, Deputy Head of the Management Board of Binh Tien Market, Ho Chi Minh City

Ms. Tran Thi Thu Ha, Deputy Head of the Management Board of Binh Tien Market, Ho Chi Minh City, stated that the majority of vendors' total income falls outside the tax bracket, with only a few households exceeding 500 million VND in revenue. She also pointed out the current challenge lies in technology, as most elderly vendors struggle to use computers, mobile phones, and software applications, requiring assistance from the Management Board and tax authorities.

Technological challenges arise because the majority of elderly small business owners struggle with using machines, phones, and software functions, requiring assistance from the management board and tax authorities.

Thanks to this new regulation, small business owners like Ms. Thanh, who has owned a tailoring shop for decades and used to pay around 8 million VND in taxes annually, no longer have to pay it, giving them extra savings and a safety net in the face of difficult economic conditions.

Ms. Xuan Thanh, a small business owner at Binh Tien Market, Ho Chi Minh City.

Ms. Xuan Thanh, a small business owner at Binh Tien Market in Ho Chi Minh City, expressed her delight that this policy is more practical for small traders in traditional markets, where the fixed tax is often higher than the actual cost of living. She believes that less work and lower taxes will help stabilize their lives.

In addition, Ms. Nguyen Thi Ngoc Huong, a small business owner at Binh Tien Market, Ho Chi Minh City.

In addition, Ms. Nguyen Thi Ngoc Huong, a small business owner at Binh Tien Market in Ho Chi Minh City, also shared her joy upon hearing that a revenue of 500 million VND would be exempt from taxes. She said that the income of small business owners is insufficient, so she was very happy to hear this, and expressed her hope that the threshold could be raised even higher.

Mr. Lam Khanh Hy, Hiep Ky Tamarind Candy Production Facility

However, for businesses with high input costs, the 500 million VND threshold is still considered low. Mr. Lam Khanh Hy, owner of Hiep Ky tamarind candy production facility, believes that while small businesses might agree, spas, nail salons, coffee shops with high costs, or manufacturers like his own facility also have relatively high expenses. Compared to companies that receive refunds for those expenses, the increased tax will reduce profits.

According to the newly approved tax policy, up to 2.3 million business households will be exempt from taxes. Only revenue exceeding 500 million VND per year will be subject to a 15% tax rate on profits. For example, a business household with revenue of 400 million VND will not have to pay taxes, but if revenue is 700 million VND, the 200 million VND exceeding the threshold will be subject to a 15% tax on profits. This calculation method is expected to reduce the tax burden for small-scale businesses while creating a clear stratification between small-scale businesses and those with large revenues.

Mr. Nguyen Huu Nghia, Deputy Director of the Center for Supporting Small and Medium Enterprises, Ho Chi Minh City Business Association.

Mr. Nguyen Huu Nghia, Deputy Director of the Center for Supporting Small and Medium Enterprises of the Ho Chi Minh City Business Association, stated that firstly, policies must be changed to truly support household businesses. Secondly, policies must be implemented effectively and have a positive impact, reducing compliance costs for household businesses so they comply better, and legal documents and invoices must be simplified to suit the management capacity of household businesses and micro-enterprises.

According to Decree 70, only business households with annual revenue of 1 billion VND or more are required to use electronic invoices with tax authority codes.

Currently, business households are still concerned about proving revenue below 500 million VND/year. According to Decree 70, only business households with annual revenue of 1 billion VND or more are required to use electronic invoices with tax authority codes. Business households with revenue below 1 billion VND will self-declare using invoices and supporting documents as guided by the tax authorities.

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Source: https://htv.com.vn/chinh-thuc-nang-nguong-mien-thue-len-500-trieu-dong-nam-222251211103006112.htm