Proposal to maintain a stable tax calculation method for two consecutive years for household and individual businesses.

Photo caption — Illustrative photo: Tran Viet/TTXVN

Accordingly, the draft Decree clearly stipulates that business households and individual businesses with annual revenue of 500 million VND or less are exempt from value-added tax and personal income tax.

In cases where revenue exceeds 500 million VND/year, value-added tax (VAT) is paid using the direct method on revenue, applying the percentage rate as stipulated in the Value-Added Tax Law No. 48/2024/QH15 and its guiding documents.

For households and individuals with annual revenue exceeding 500 million VND, personal income tax is determined by multiplying taxable income (revenue minus eligible expenses) by a tax rate of 15%, 17%, or 20%, depending on the revenue level. For those with revenue between 500 million and 3 billion VND, the option is to pay tax based on taxable income or a percentage of revenue exceeding 500 million VND, at rates of 0.5%, 1%, 1.5%, 2%, or 5%, depending on the industry. Rental income from real estate (excluding accommodation) is subject to a 5% tax rate on revenue exceeding 500 million VND and is not subject to the income-based tax calculation method.

The tax calculation method is applied consistently for two (2) consecutive years from the first year of application. In the case of business households and individual businesses with annual revenue exceeding 500 million to 3 billion VND currently applying the personal income tax calculation method based on a percentage of revenue, if for two consecutive years they self-determine or the tax authority has data confirming that the business household or individual business has actual revenue exceeding 3 billion VND, then from the following year they must switch to the method of calculating personal income tax based on taxable income (revenue - expenses) multiplied by the tax rate.

Revenue is the total amount of money received from the sale of goods or services by a household or individual business, regardless of whether the money has been collected or not, and excluding value-added tax. For property rentals, taxable revenue is the amount the lessee pays periodically or as per a prepaid contract for multiple years.

According to the draft, in cases where business households and individual business owners determine their annual revenue from the production and sale of goods and services to be 500 million VND or less, they must notify the tax authorities of their actual revenue generated during the year no later than January 31st of each year.

In cases where a household business or individual business determines that its annual revenue from the production and sale of goods and services exceeds 500 million VND, the household business or individual business shall determine the amount of value-added tax and personal income tax payable in accordance with the provisions of the value-added tax and personal income tax laws as stipulated in Articles 3, 4, 5, and 6 of this Decree.

In cases where household businesses and individual business owners use electronic invoices, or electronic invoices generated from cash registers connected to the tax authority's data system, the Tax Management Information System will automatically generate tax declarations to support household businesses and individual business owners in declaring value-added tax and personal income tax, and calculating value-added tax and personal income tax based on electronic invoice data, tax management data, and other data sources obtained by the tax authority from other state agencies, organizations, and individuals.

In cases where electronic invoices are not used, household businesses and individual business owners must determine the amount of tax payable themselves according to regulations.

Source: https://baotintuc.vn/kinh-te/de-xuat-on-dinh-phuong-phap-tinh-thue-2-nam-lien-tiep-cho-ho-ca-nhan-kinh-doanh-20251215153140642.htm