Deputy Tax Director: Setting a Tax Exemption Threshold at VND 200 Million or Below Would Exempt 44% of Businesses

On November 12, Thanh Nien Newspaper, in collaboration with the Tax Department (Ministry of Finance), hosted an online seminar titled: “Changes in Tax Management Models – What Should Business Households Note?”

The seminar addressed the issue that, according to the Value Added Tax Law, from 2026, the tax-exempt revenue threshold for business households will be 200 million VND/year, replacing the current 100 million VND/year. However, many opinions suggest that the 200 million VND/year threshold, though not yet implemented, is already somewhat outdated, and propose that the tax authorities consider and recalculate to raise this threshold.

Commenting on this issue, Mr. Mai Son, Deputy Director of the Tax Department, stated that according to tax authority statistics, if the threshold is set at 200 million VND for tax exemption, 44.4% of business households would be exempt from tax.

He also emphasized the necessity of calculating the threshold. In the draft amended Personal Income Tax Law, it is stipulated that the Government will determine the revenue threshold for individuals and business households exempt from personal income tax. This creates flexibility in line with socio-economic development.

According to the Tax Department’s leadership, once business households stabilize during the transition process, tax authorities will carefully evaluate and calculate, continuing to monitor to provide reports and proposals suitable for the socio-economic situation and public feedback in determining revenue.

“With this tax rate, data shows that a large number of business households have benefited from tax exemptions,” he said.

When asked about future adjustments to the threshold and how the tax management model would adapt, Mr. Mai Son stated that there would certainly be shifts in the threshold structure, but these would not affect the management methods or operations of business households.

“The current proposed threshold will remain stable for three years. When adjustments are made, tax authorities will coordinate with all relevant units to ensure uniform changes. These adjustments will bring practical efficiency to operations and accurately reflect the socio-economic situation, without impacting the obligations of business households. On the state management side, we are always ready to facilitate administrative procedures, declarations, and guidance on fulfilling obligations,” Mr. Son emphasized.

Mr. Son also mentioned that during the initial implementation of invoice generation from connected cash registers, there were challenges, but most business households recognized clear benefits upon adoption. Tax authorities have developed programs, such as increasing the threshold for lucky invoice rewards, applying National Assembly Resolutions 68 and 198, providing state incentives and support for business households, to ensure successful digital transformation and encourage them to grow into small, medium, or micro enterprises for greater support.

Regarding policy frameworks, the Tax Department’s leadership stressed that amending policies to reduce administrative procedures and simplify accounting is the first condition. Currently, as required, administrative procedures are minimized by 30%, with an expected reduction of approximately 45%, and compliance costs are reduced by about 45%.

For business processes, forms, and declarations, simplicity, integration, and user-friendliness are key. Suggested declarations will be based on data collected by tax authorities, tax agents, and solution providers, helping reduce costs and time for accounting and obligation calculations. These simplified steps will support business households.

“Initially, through the early thresholds with tax authority support, business households will become familiar with these processes, making them very straightforward. For business households, basic accounting organization is not required, as everything relies on electronic methods. Solution providers will collaborate with tax authorities to find the simplest approach,” he said.