Effective January 1, 2026, Vietnam’s tax management system for household businesses will undergo a significant transformation. The traditional lump-sum tax mechanism will be replaced by a revenue-based declaration method, directly impacting over 2.5 million registered household businesses. This shift necessitates proactive measures from business owners to review and standardize operations for seamless compliance.
The newly amended Personal Income Tax Law, recently approved by the National Assembly, introduces key changes. Household and individual businesses with annual revenue up to VND 500 million will be exempt from personal income tax and value-added tax (VAT).
For businesses generating between VND 500 million and VND 3 billion annually, two personal income tax calculation options are available: 1) a 15% tax rate on taxable income (revenue minus allowable expenses), or 2) a tax applied only to revenue exceeding VND 500 million, calculated at a fixed percentage.
Profit-based taxation (revenue minus expenses) applies to higher revenue brackets: 17% for VND 3–50 billion and 20% for over VND 50 billion annually.
The lump-sum tax method will be discontinued from January 1, 2026.
With just two weeks until implementation, businesses are urged to prepare by updating records, completing administrative procedures, and conducting inventory checks.
According to Lê Thị Duyên Hải, Deputy Secretary-General of the Vietnam Tax Consultants Association, businesses should first assess their 2025 revenue and estimate 2026 figures to determine their tax bracket. This is crucial for selecting the appropriate tax method and preparing accounting documents for the upcoming year.
Businesses anticipating taxable revenue must conduct an inventory audit at the transition point to ensure accurate, transparent data for new declarations.
Those expecting 2026 revenue of VND 1 billion or more are advised to adopt e-invoicing early to minimize errors in sales and tax filings.
Businesses with projected revenue above VND 500 million should maintain detailed records and documentation, aligning with their chosen tax method. Accounting books must reflect the selected tax calculation approach.
If switching tax methods, businesses must update their registration details via the integrated one-stop mechanism or directly with tax authorities.
The Vietnam Tax Consultants Association recommends dedicated business bank accounts to streamline management and declarations, separate from personal finances.
Tax declarations must adhere to official templates, matching the chosen method and business sector. The eTax Mobile app is available for convenient, compliant submissions.
Ahead of January 1, 2026, businesses can simulate registration, declarations, and payments using dummy data on eTax Mobile. Registration requires basic details: full name, ID/citizen ID, tax code, phone, email, and verification code. Successful registration unlocks access to tax registration, declaration, e-invoice management, payment, and feedback functions.
The Ministry of Finance is finalizing a draft decree on tax declaration, deduction, payment, and e-invoicing for household businesses. Proposed provisions include a two-year stable revenue-based tax method for businesses above VND 500 million, with adjustments based on actual revenue. Businesses under VND 1 billion annually are exempt from mandatory tax-coded e-invoicing.
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