On the morning of December 10, at the 10th session, the National Assembly voted to pass the Law on Personal Income Tax (amended), with the majority of delegates voting in favor.
The Law takes effect from July 1, 2026, except for provisions related to income from business, salaries and wages of resident individuals applied from the 2026 tax period.
Clause 1, Article 7 of the Law recently passed by the National Assembly stipulates that resident individuals with production and business activities with annual revenue of 500 million VND or less are not required to pay personal income tax.
Thus, the Government has adjusted the taxable revenue from 200 million VND/year to 500 million VND/year. At the same time, this 500 million VND/year is also the deductible amount before paying tax according to the rate on revenue.
According to the Government, in the case of households or individuals distributing or supplying goods with an annual revenue of 1 billion VND and undetermined costs, they only have to pay personal income tax on the amount exceeding 500 million VND at a tax rate of 0.5%, meaning the tax payable is (1,000 - 500) x 0.5% = 2.5 million VND/year.
Applying this revenue level, according to current data managed by the tax industry, as of October 2025 there are more than 2.54 million regular business households (including households and individuals still doing business according to the contract method, some households and individuals are doing business according to declaration).
It is expected that about 2.3 million business households will not have to pay taxes (accounting for about 90% of the total 2.54 million business households).
According to estimates by the tax authorities, the total tax reduction (including both personal income tax and value-added tax) is approximately 11,800 billion VND.
Furthermore, the Law also adds a provision for households and individuals engaged in business with annual revenue exceeding 500 million VND up to 3 billion VND, applying income tax (revenue – expenses) to ensure tax collection in accordance with the true nature of income tax, and applying a 15% tax rate similar to the corporate income tax rate for businesses with annual revenue below 3 billion VND.
The Government's report on receiving, explaining, revising and perfecting the draft Law clearly states that all business households and individuals must pay taxes according to actual income. If they have a lot of income, they must pay more tax; if they have a little income, they must pay less tax; if they have no income, they do not have to pay tax.
In addition, these individuals also have the option of having their tax calculated based on a percentage of their revenue.
The government affirms that by adjusting the tax-exempt revenue threshold to 500 million VND and raising the value-added tax-exempt revenue threshold to 500 million VND, while also allowing a deduction of 500 million VND from revenue before tax calculation, and adding a tax calculation method based on income (revenue - expenses) for household and individual businesses, the Law has created a fair and equitable legal framework suitable to the business conditions of household and individual businesses. This supports individuals in confidently engaging in production and business activities to stabilize their lives and develop their businesses.
In addition, for individuals whose real estate rental activities are irregular business activities under contracts (except for accommodation business activities), to ensure tax payment is simple, the Law stipulates that individuals whose real estate rental activities have annual revenue of over 500 million VND/year will only apply the method of calculating based on the ratio of revenue, accordingly, they will not have to determine costs and will not have to finalize annual taxes.
The newly passed law has provisions amending and supplementing the Law on Value Added Tax, raising the non-taxable revenue of business households and individuals from VND200 million/year to VND500 million/year to ensure consistency and uniformity in the revenue level not subject to personal income tax.
Source: https://vtv.vn/tu-2026-ho-kinh-doanh-co-doanh-thu-duoi-500-trieu-dong-nam-khong-phai-nop-thue-10025121010233228.htm
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