From June 1, Decree 70/2025 takes effect. About 37,000 households with revenue of over 1 billion VND per year in a number of industries (food and beverage, hotels, retail, passenger transport, beauty, entertainment...) must use electronic invoices generated from cash registers with data connection to tax authorities.
Lump-sum tax is a tax calculated based on a percentage of lump-sum revenue determined by the tax authority, applied to business households and individuals who pay taxes under the lump-sum method. Regulations on lump-sum tax rates can be calculated by calendar year or by month in the case of seasonal business.
According to Decree 70/2025, instead of paying lump-sum tax, households will have to declare and pay tax on actual revenue.
According to current regulations, business households must pay three types of taxes, including business license tax, personal income tax and value added tax (VAT).
Business license tax
Business license tax is the amount of money that organizations and individuals with production and business activities must pay annually. According to Clause 2, Article 4 of Decree 139/2016 and Point c, Clause 1, Article 1 of Decree 22/2020, the business license fee for business households is not fixed but is calculated based on average annual revenue.
| Annual Revenue | Annual business tax rate |
| From 100-300 million VND | 300,000 VND |
| From 300-500 million VND | 500,000 VND |
| Over 500 million VND | 1 million dong |
Value Added Tax (VAT) and Personal Income Tax
According to Clause 2, Article 4 of Circular 40/2021 of the Ministry of Finance , business households and business individuals with revenue from production and business activities in the calendar year of VND 100 million or less are not required to pay value added tax and personal income tax.
Business households and business individuals are responsible for declaring taxes accurately, honestly, and completely and submitting tax records on time; and are responsible before the law for the accuracy, honesty, and completeness of tax records as prescribed.
In case of revenue over 100 million VND, it is subject to value added tax and personal income tax. The tax amount is calculated by the management agency based on total revenue, VAT rate of goods, services and personal income for each business activity.
| Industries | VAT | Personal Income Tax |
| Wholesale and retail of goods | 1% | 0.5% |
| Eat and drink | 3% | 1.5% |
| Accommodation: motel, hotel | 5% | 2% |
| Karaoke, tailoring, laundry, haircut, shampoo services | 5% | 2% |
| Transportation | 3% | 1.5% |
| Land and warehouse for rent | 5% | 5% |
For example: Before June 1, a hair salon was determined by the tax authority to have a fixed revenue of 1 billion VND/year. Thus, the tax that this household must pay is 70 million VND/year, equivalent to about 5.83 million VND/month (value added tax and personal income tax).
However, after June 1, this store's revenue will be recorded in reality through invoices from the cash register and declared and taxed monthly or quarterly.
For example, if they actually have a monthly revenue of 100 million VND, the tax payable is 100 million VND × 7% = 7 million VND. If they have a monthly revenue of 70 million VND, the tax payable is 70 million VND × 7% = 4.9 million VND.
The above rates do not include business tax.
After the lump-sum tax is abolished from June 1, business households will pay taxes based on actual revenue, including business license tax, personal income tax and value-added tax (Photo: Thanh Dong).
Previous statistics from the Ministry of Finance showed that by the end of 2024, Vietnam will have about 3.6 million business households and individuals, with total tax revenue reaching nearly VND26,000 billion.
Notably, more than 4,000 business households have revenue of over 10 billion VND, but more than half still pay lump-sum tax at a very low rate, only about 0.4% of revenue, while the declaring households have to pay tax up to 25-30% of revenue.
The Ministry of Finance stated that the average lump-sum tax rate is currently about 672,000-700,000 VND/month/household, while the average tax rate according to the declaration method is about 4.6 million VND/month/household, which is nearly 7 times higher.
According to the roadmap, Vietnam will eliminate lump-sum tax for business households by 2026 at the latest, as required in Resolution 68 of the Politburo on private economic development.
Source: https://dantri.com.vn/kinh-doanh/ho-kinh-doanh-dong-thue-ra-sao-sau-khi-bo-thue-khoan-20250618140741983.htm
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