Expected tax calculation on profits for all business households exceeding the tax threshold

(Dan Tri) - The Ministry of Finance plans to report to the Government a plan to collect tax on income (revenue - expenses) for all business households with revenue above the non-taxable threshold.

Information related to imposing tax on profits for all business households with revenue exceeding the tax threshold was announced by the Ministry of Finance on November 25, when completing the draft Law on Personal Income Tax (amended).

The Ministry of Finance said that this unit plans to report to the Government a plan to adjust the non-taxable revenue level of business individuals to ensure it is consistent with the actual situation, demonstrating the State's sharing with households and business individuals with revenue of 3 billion or less, towards the goal of social security.

To ensure consistency and reflect the true nature of income tax, the Ministry of Finance plans to report to the Government a plan to collect tax on income (revenue - expenses) for all individuals with revenue above the non-taxable threshold.

Accordingly, it is expected to add a regulation that business individuals with annual revenue above the non-taxable threshold of up to 3 billion VND will pay tax at the tax rate corresponding to the corporate income tax applicable to enterprises with revenue below 3 billion VND.

Business households selling goods at traditional markets (Photo: Ngoc Linh).

In case an individual business has a revenue of less than 3 billion VND and cannot determine the cost, they will continue to pay tax at the current rate on revenue (with tax rates of 0.5%, 1%, 2% depending on the industry) and these households and individuals will be deducted according to the non-taxable threshold before calculating tax, not calculating tax from the first revenue as current regulations.

Thus, the method of calculating tax on profits can be applied uniformly instead of dividing into groups as proposed by the Ministry of Finance in October in the Project on converting tax management models and methods for business households.

According to the previous project, business households are expected to be divided into 3 groups, linked to each revenue level and corresponding tax management method.

Group 1 is business households with revenue under 200 million VND/year. This group is exempt from paying value added tax and personal income tax. They also do not need to apply complicated accounting books but still have to make periodic declarations. These households can choose to declare twice a year at the beginning and middle/end of the year or choose a suitable time.

Group 2 is business households with revenue from 200 million to less than 3 billion VND . This group is required to pay tax by the direct method on revenue, and can voluntarily register for the deduction method if qualified. In which: Value added tax payable = revenue x % rate; personal income tax payable = revenue x % rate.

Different business lines will have different percentages.

Tax rates are determined according to specific industry groups, including: 1% for goods distribution and supply activities; 5% for services and construction without contracted materials; 3% for production, transportation, services associated with goods and construction with contracted materials and 2% for the remaining business activities.

This business household does not need to follow a complicated accounting regime, but still has to keep simple books with prescribed forms. They have to declare taxes 4 times a year (quarterly).

A notable new point is that business households in this group with a revenue of over 1 billion VND/year, especially in the retail and direct-to-consumer services sector, will have to issue electronic invoices from cash registers connected to the tax authorities. This is considered a measure to reduce revenue loss and increase transparency in transactions. These households must also open separate bank accounts for business purposes and will be supported with free accounting software.

If a business household's revenue exceeds 3 billion VND for 2 consecutive years, they will be transferred to a higher management group.

Group 3 is businesses with revenue of over 3 billion VND per year . This is the largest group in terms of scale and will apply the tax deduction method, similar to enterprises. Value added tax payable is equal to output tax minus input tax; personal income tax is calculated at 17% of profit after deducting reasonable expenses.

Business households in this group must issue electronic invoices, use bank accounts for business purposes and declare taxes monthly if revenue is over VND50 billion, or quarterly if below this threshold.

Source: https://dantri.com.vn/kinh-doanh/du-kien-tinh-thue-tren-lai-cho-toan-bo-ho-kinh-doanh-vuot-nguong-chiu-thue-20251125171945819.htm