Under the amended PIT Law, recently passed by the National Assembly on December 10, individuals engaged in production and business activities with annual revenue of VND500 million or less are not required to pay PIT.

This is also the threshold at which business households are exempt from value-added tax (VAT) and PIT when switching from the lump-sum method to self-declaration, with tax payment from January 1, 2026.

Hoa Tue Tam, a grocery shop owner in Bach Mai Ward, Hanoi, said his annual sales revenue is estimated at nearly VND1 billion a year.

“When the tax-free threshold for business households is raised to VND500 million in 2026, the amount of tax payable will be reduced significantly, helping business households like ours feel more secure in doing business,” Tam said.

However, he is still worried that once revenue exceeds VND1 billion, business households like his will have to use electronic invoices along with accounting books. 

“How can we comply properly with regulations on documents, accounting books, and issuing electronic invoices when we are not familiar with them and can easily make mistakes?” he said.

“We hope to receive support so that sales can be conducted quickly and efficiently, avoiding errors. If mistakes occur, there will be penalties, which really worries me,” he said.

Tam expressed hope that state agencies will provide support during the first one to two years so that small business households have time to get used to declaration procedures. If mistakes occur, he hopes they will not be penalized, because “grocery households have large capital but very small profits.”

Le Thi Duyen Hai, Deputy Secretary General of the Vietnam Association of Tax Consultants, said that when the National Assembly “finalized” the taxable revenue threshold for business households at over VND500 million per year from January 1, 2026, business households will know which category they fall into and what tax procedures they must follow.

“Business households can feel reassured about most current tax regulations. Households with revenue of VND500 million or more will only have to pay VAT at a rate calculated on revenue. The new and beneficial point for business households is that they only have to pay tax on the portion exceeding VND500 million.

If they fall under the category required to declare and pay tax, the tax amount will be calculated as a percentage of revenue depending on the business sector, similar to the method currently applied,” Hai explained.

Regarding electronic invoices, Hai said regulations remain as stipulated in Decree 70, meaning only households with revenue above VND1 billion per year are required to use invoices, while those below VND1 billion may use them voluntarily if they see fit.

Pressure reduced but penalties still high

Regarding concerns about penalties raised by business households, Hai said that under previous regulations, the behavior of not issuing invoices or issuing them at the wrong time was subject to very heavy penalties, calculated per violating invoice.

However, under Decree 310 (effective from January 16, 2026), penalty regulations have been changed in a more progressive way. 

Authorities will consider it a single violation with aggravating circumstances based on the number of invoices, rather than adding up fines for each invoice as before. Penalty levels remain high, possibly reaching millions or tens of millions of VND, but the new calculation method significantly reduces pressure compared to the past.

Meanwhile, lawyer Truong Thanh Duc, Director of Anvi Law Company, said regulations on administrative penalties in the tax field need to be reconsidered.

According to him, current penalty levels are high relative to the revenue scale and income of business households. Penalizing late declarations is reasonable, but penalties should be limited to reprimands or warnings of a few tens or hundreds of thousands of VND, rather than fines of millions, which he considers too heavy.

At the same time, policies need to be designed carefully to avoid situations where people try to “circumvent the law” by splitting business household scales among family members’ names to enjoy lower tax rates.

Nguyen Le