Regarding tax policies for business households and individuals, the Ministry of Finance (MOF) has received numerous proposals from National Assembly delegations from the provinces of Dong Nai, Vinh Long, Dong Thap and Tay Ninh.

According to the Dong Nai NA delegation, voters support the policy to abolish flat-rate tax in order to enhance transparency in tax declaration and collection.

However, implementing electronic invoices generated from cash registers as mandated by Decree 70, commencing June 1, 2025, and abolishing flat-rate tax from January 1, 2026, poses significant challenges for business individuals and households, particularly small-scale traders and elderly individuals who lack the equipment and manpower to fully comply with electronic invoice and tax declaration procedures.

Dong Nai voters proposed that MOF advise the Government to direct relevant ministries and agencies to consider appropriate support policies (such as training, equipment, software, human resources support, and transitional tax policies) to facilitate business households and small traders in complying with tax obligations while ensuring feasibility and alignment with practical conditions.

According to the Tay Ninh NA delegation, unclear communication and guidance on tax policies have recently caused many small traders to worry and temporarily suspend operations. Voters suggested a clear roadmap to disseminate and explain policy details thoroughly, particularly the transition from flat-rate tax to tax declaration and the amount of tax payable.

Meanwhile, the Vinh Long NA delegation requested guidance and solutions to help small-scale household businesses apply input and output tax mechanisms.

The Dong Thap NA delegation proposed that tax authorities develop an appropriate roadmap and issue specific guidelines for household businesses with annual revenues exceeding VND1 billion to declare and pay taxes as required, ensuring transparency and fairness.

Responses from MOF

MOF stated that to maximize support for household businesses transitioning from traditional flat-rate tax to tax declaration starting in 2026, it has directed the Tax Department and related units to study and propose maximum simplification of the accounting regime for business households. 

They plan to integrate automatic bookkeeping and tax declarations from e‑invoice data, minimizing errors and reducing compliance burdens for business households.

They will develop tax management policies aligned with modern tax administration processes, tailored to the characteristics of business households once the presumptive tax mechanism is removed, under the principle that households self‑declare tax, and authorities make full use of technology to build databases and manage risk for business households.

Implementing Resolution 198/2025/QH15 on special mechanisms and policies for private sector development, the Ministry is drafting a decree guiding implementation.

That includes provisions to “provide free digital platforms and shared accounting software for small and micro enterprises, business households and individual entrepreneurs,” and to “provide free legal advisory services, training in business management, accounting, tax, and human resources for small and micro enterprises and business households.”

Also, the NA has adopted a policy to exempt corporate income tax for small and medium enterprises for three years from the date of first enterprise registration, to encourage business households to convert into company models.

MOF is coordinating with other ministries to propose to the Government and competent authorities policies to waive or reduce taxes or provide direct financial support to business households that register to use e‑invoices generated from point‑of-sale systems.

Under current tax policy, business households with annual revenue up to VND100 million (rising to VND200 million from January 1, 2026) are exempt from VAT and PIT. Other taxes, such as luxury tax (or special consumption tax as called in Vietnam) and environmental protection tax, are applied according to existing regulations.

Tax for business households/individual entrepreneurs is based on taxable revenue and a tax rate on that revenue. Taxable revenue for VAT and PIT includes total sales, processing fees, commissions, and service revenues occurring in the tax period, regardless of whether payment has been received.

The tax rate on revenue includes the applicable VAT rate and personal income tax rate for each sector or profession.

Based on those rules, MOF said business households/individual entrepreneurs will pay tax using a percentage on revenue method. The mechanism of deducting input tax is not applied.

Several days ago, MOF said there will be no retroactive tax collection for business households switching from presumptive tax to revenue-based tax.

Nguyen Le