Business households: tax threshold 200 million/year, proposed 1 billion

The threshold for taxable revenue for business households will increase to 200 million VND/year from next year. The tax authority is considering 400 million VND, while many experts and small traders suggest 1 billion VND to reflect costs.

The revenue threshold for business households to pay tax will be raised to 200 million VND/year from next year according to the Project just approved by the Ministry of Finance . However, many opinions say that this level is still low compared to actual costs, while the tax authority has considered the threshold of 400 million and experts and traders have proposed raising it to 1 billion VND/year.

Policy developments and key figures

The Ministry of Finance has approved the conversion of the tax management model and method for business households, determining the taxable revenue threshold from 200 million VND/year. Previously, the applicable threshold was 100 million VND/year.

By the end of 2024, the country will have about 3.6 million households and individuals doing business; of which 2.2 million are operating stably (contracted and declared households). The number of households with revenue above the tax-paying threshold (VND 100 million/year) is 1.3 million, equivalent to 59% of the total number of households.

Small traders at a market in Hanoi , December 2024. Photo: Phuong Dung

Cost pressures and tax fairness

Many retailers believe that the threshold of 200 million VND/year is low in the context of increasing input costs. Ms. Nguyen Thai Trang (An Dong wholesale market, Ho Chi Minh City) said: "The cost price is high, the profit is low, just need to sell a few items to exceed the threshold."

Mr. Tran Van An (Tay Mo ward, Hanoi) said that his family's pho shop has a revenue of about 20 million VND/month (240 million VND/year), belongs to group 2 and has to pay 4.5% tax. "Doing business for profit, almost no profit", he said.

According to Mr. Le Van Tuan, Director of Keytas Tax Accounting Company, a revenue of 200 million VND “does not create profit” for many households, because the labor costs of the household head and supporting relatives may have exceeded this level. He also said that this level is not fair compared to salaried workers who have their personal income tax reduced by up to 186 million VND/year and do not bear business risks.

Compared to enterprises, business households that declare do not have lower tax obligations due to the reference tax rates for each industry. Losing households still have to pay and cannot transfer losses like enterprises.

Compare policy milestones and recommendations

Milestone/Plan	Revenue threshold	Note
Current	100 million VND/year	Currently applying
From next year	200 million VND/year	According to the Ministry of Finance Project
Options for tax authorities to consider	400 million VND/year	Presented at the June workshop
Suggestion for small traders	500–700 million VND/year	Reflects actual costs
Expert recommendations	1 billion VND/year	Many experts agree

Ms. Nguyen Thi Cuc, President of the Tax Consulting Association, argued that the threshold of 1 billion VND is reasonable when assuming a net profit of 16%: income of about 13.3 million VND/month, in line with the goal of raising average income. The current deduction is 15.5 million VND/month for taxpayers (186 million VND/year) and 6.2 million VND/month for each dependent (74 million VND/year).

How will business households pay taxes from 2026? Video : Kim Long - Diem Hanh

Policy trends and compliance discipline

The threshold of 200 million VND/year will reduce the number of households having to pay taxes compared to the previous level of 100 million VND, but according to Mr. Le Van Tuan, the threshold is too low, reducing the efficiency of budget collection due to increased management costs: "One officer has to supervise thousands of business households, causing management efficiency to decrease and administrative pressure to increase."

Experts suggest linking the threshold increase with increased data transparency. Electronic invoices from cash registers should apply to all households, regardless of revenue; households register for tax, determine revenue and pay when exceeding the threshold, and issue electronic invoices when buyers request to connect data.

Impact on related industries and markets

- Retail, catering, personal services: Higher thresholds can reduce tax liability pressure for households with thin profit margins, creating room for reinvestment in operations.

- Compliance solution providers: Demand for cash registers, electronic invoices, and digital signatures may increase as businesses have more resources for initial investments.

- Tax management: Raising thresholds and digitizing invoices are expected to help focus monitoring resources on groups with large revenues, improve collection efficiency and reduce administrative "friction".

Source: https://baolamdong.vn/ho-kinh-doanh-nguong-thue-200-trieunam-de-xuat-1-ty-397689.html