TAX POLICY AND TAX ADMINISTRATION FOR HOUSEHOLD BUSINESSES AND INDIVIDUAL BUSINESSES IN 2026
On January 29, 2026, the Tax Department issued Notice No. 85/TB-CT on the dissemination of tax policy and tax administration for household businesses and individual businesses, based on the principles of transparency, risk reduction, and support for transition. The tax authority sent to household businesses and individual businesses several specific contents
1. Tax obligations based on revenue (Threshold: 500 million VND/year)
Revenue ≤ 500 million/year: Not required to pay value-added tax (VAT) and personal income tax (PIT), but still required to declare and report revenue 👉 No tax payment # No procedures.
Revenue > 500 million/year: Mandatory payment of VAT + PIT and required to file tax returns monthly or quarterly.
2. Tax calculation method and tax rates (Revenue > 500 million)
3. Regulations on electronic invoices (“E-invoices”) and accounting
Electronic invoices:
- Revenue ≥ 1 billion/year: mandatory use of e-invoices
- Revenue from 500 million to under 1 billion: not mandatory, may register if needed
- Revenue ≤ 500 million: not mandatory
Accounting books: Open appropriate types of books depending on tax payment method and business scale (e.g., revenue book, detailed book, etc.) (Implemented according to Circular 152/2025/TT-BTC dated December 31, 2025 of the Ministry of Finance guiding accounting for household businesses and individual businesses, replacing Circular 88/2021/TT-BTC).
4.Deadline for tax declaration according to revenue-based
5. Business on e-commerce platforms (“E-commerce”), digital platforms
If the platform has payment functionality → the platform withholds and pays tax on behalf of the seller.
If the platform does not handle ordering or payment → the individual business must declare and pay tax themselves.
Multi-channel business (both online & offline) → revenue must be aggregated for declaration. Taxes withheld and paid by platforms are deducted when calculating the final tax liability
6. Determination of revenue and expenses
Revenue: includes all proceeds from sales, processing, services, subsidies, sales bonuses, promotions, etc. (regardless of whether payment has been collected or not).
Deductible expenses (when choosing income-based calculation): actual expenses related to business activities, supported by valid documents (non-cash documents required for amounts ≥ 5 million VND).
7. Business in multiple industries, multiple locations
Allowed to select one industry/location most favorable to deduct 500 million VND before tax calculation.
If the full 500 million deduction is not yet applied, additional industries/locations may be chosen until the full 500 million deduction is reached.
8. Roadmap and commitments
Effective from 2026.
The tax authority commits to accompany businesses, avoid creating pressure, and allow household businesses time to adapt during the initial implementation phase.
