Regarding taxes on individual business households, under the current Law on Personal Income Tax (PIT), annual revenue of 100 million dong or below is exempt from PIT. This threshold is currently applied consistently for households and individual business operators.

On November 26, 2024, the National Assembly passed VAT Law No48/2024/QH15, under which this threshold was adjusted from VND100 million dong/year to VND200 million/year, effective from January 1, 2026. To ensure coherence and uniformity in the legal system, the Government submitted to the National Assembly a proposal to raise the annual revenue threshold exempt from tax for individual business operators to VND200 million/year.

MOF said that, based on feedback from verification bodies and deputies, it will continue researching adjustments to raise this threshold appropriately, ensuring relative fairness compared with individuals earning wages and salaries. It also plans to amend the VAT Law to raise the threshold exempt from VAT to ensure alignment.

Currently, MOF intends to report to the Government a plan to adjust the non-taxable revenue threshold for individual business operators to match actual conditions, reflecting the State’s support for households and individual businesses with revenue of VND3 billion or below, aiming toward social welfare goals.

In addition, the ministry will continue researching a tax calculation method for households and individuals with revenue of VND3 billion or below to ensure appropriateness and reflect the true nature of income tax.

It is planning to report to the Government a plan to collect tax on income (revenue minus expenses) for all individuals whose revenue exceeds the tax-exempt threshold. Accordingly, it proposes adding a regulation under which individual business operators with annual revenue above the exempt threshold up to VND3 billion will pay tax at a rate equivalent to the corporate income tax rate applied to enterprises with revenue under VND3 billion.

For individual business operators with revenue under VND3 billion who cannot determine expenses, they will continue paying tax based on a percentage of revenue as currently applied (with tax rates of 0.5, 1, or 2 percent depending on the business field). These households and individuals will receive deductions up to the tax-exempt threshold before tax calculation, instead of being taxed from the first dong of revenue as currently prescribed.

Prior to that, many experts and National Assembly deputies said that the proposed VND200 million threshold, though double the current fixed-tax threshold of VND100 million dong, was still too low when converted to monthly revenue, only about VND16 million. This may disadvantage household businesses, especially compared with salaried workers who have recently received higher family-circumstance deductions. Some proposed raising the taxable revenue threshold to VND1 billion/year.

Nguyen Le