Official: Tax Exemption Threshold for Business Households Raised to VND 1 Billion per Year, Effective from January 1, 2026

 

Raising the taxable threshold for business households to VND 01 billion/year

Article 1 of Decree No. 141/2026/ND-CP has amended and supplemented several articles of Decree No. 68/2026/ND-CP dated March 5, 2026, of the Government on tax policies and tax administration for business households and individual businesses. Specifically:

Amending the phrase "VND 500 million" to "VND 01 billion" in Article 3 (Value Added Tax), Article 4 (Personal Income Tax), Clause 1 of Article 8, Article 9, Article 10, Clause 3 of Article 11, Clauses 1 and 2 of Article 12, Clause 4 of Article 17, and Clause 3 of Article 18 of Decree No. 68/2026/ND-CP.

Decree No. 141/2026/ND-CP also clarifies: In cases where business households or individual businesses determine their annual revenue from production, business activities of goods and services to be VND 01 billion or less, but have already declared and paid personal income tax and value-added tax in accordance with Decree No. 68/2026/ND-CP, the paid tax amount shall be processed according to the provisions in Article 12 of Decree No. 68/2026/ND-CP.

The Ministry of Finance stated that applying an annual revenue threshold not subject to personal income tax for business households and individuals of VND 01 billion/year, while simultaneously raising the revenue threshold not subject to value-added tax to VND 01 billion/year, is consistent with the regulation that business households and individual businesses with an annual revenue of VND 01 billion or more must use e-invoices generated from cash registers connected to the tax authorities' electronic data.

According to data calculated by the tax authorities, currently, the number of households and individuals with revenue under VND 01 billion is approximately 2,556,042. With this new regulation, the expected reduction in state budget revenue is about VND 16,650 billion compared to 2025 (collected under the presumptive tax regime with a non-taxable threshold of VND 100 million/year) and a reduction of about VND 4,850 billion compared to the current policy which already adjusted the tax-exempt revenue threshold to VND 500 million/year.

Business households and individual businesses with annual revenue over VND 01 billion must apply e-invoices

Decree No. 141/2026/ND-CP also amends and supplements Clause 5, Article 8 of Decree No. 68/2026/ND-CP (use of e-invoices) as follows:

Business households and individual businesses with an annual revenue of over VND 01 billion must use e-invoices with the tax authority's code, or e-invoices generated from cash registers with data connection to the tax authority.

In cases where business households or individual businesses have multiple business locations, they shall use the tax identification number (TIN) of the business household or individual business for all stores and must clearly state the business location code on the invoice.

In cases where business households or individual businesses have an annual revenue of VND 01 billion or less, meet the conditions, and wish to use e-invoices, they may register to use e-invoices with the tax authority's code or e-invoices generated from cash registers with data connection to the tax authority.

New business households or individual businesses as defined in Article 9 of this Decree, or those whose revenue in the previous year was not over VND 01 billion (except for those already registered for e-invoices) but who reach a revenue of VND 01 billion or more during the tax year, must apply e-invoices with the tax authority's code or e-invoices generated from cash registers with data connection to the tax authority. Business households and individual businesses must register to use e-invoices within 30 days from the last day of the tax period in which the cumulative revenue exceeds VND 01 billion.

Tax-exempt income threshold for enterprises is VND 01 billion/year

Decree No. 141/2026/ND-CP supplements Clause 15, Article 4 of Decree No. 320/2025/ND-CP regarding income exempt from corporate income tax.

Accordingly, corporate income tax is exempt for the income of enterprises and organizations established under Vietnamese law with a total annual revenue of VND 01 billion or less, specifically as follows:

The total annual revenue used as a basis to determine whether an enterprise is eligible for corporate income tax exemption is the total revenue from sales and service provision (excluding revenue deductions), financial revenue, and other income as stated in the Appendix of production and business results attached to the corporate income tax finalization return of the immediately preceding tax year.

If the enterprise's operating period in the immediately preceding tax year was less than 12 months, the total revenue of that year shall be determined by taking the actual total revenue of that tax period divided by the number of months the enterprise was actually in operation, then multiplied by 12 months. In cases of newly established enterprises, conversion of enterprise type, change of ownership, consolidation, merger, division, or separation in any month of the immediately preceding tax year, the operating time shall be counted as full months.

For enterprises newly established during the tax period with a projected total revenue not exceeding VND 01 billion, the enterprise is not required to make provisional corporate income tax payments. At the end of the tax period, if the actual total revenue exceeds VND 01 billion, the enterprise shall declare and finalize corporate income tax as regulated and shall not be subject to late payment interest.

The exemption regulation does not apply to enterprises established under Vietnamese law that are subsidiaries or affiliated companies where the affiliated enterprise is not an entity meeting the exemption conditions specified in this clause.

Decree No. 141/2026/ND-CP also clearly states: In cases where an enterprise has provisionally paid corporate income tax for the first quarter of 2026 but projects total revenue for the tax period to be VND 01 billion or less, it does not have to make provisional payments for subsequent quarters, and is entitled to offset, refund, or refund-cum-offset against state budget collections in accordance with the law on tax administration for overpaid tax amounts.

If the 2025 tax period ends after January 1, 2026, and the enterprise meets the above conditions, it shall be exempt from corporate income tax for the period from January 1, 2026, until the end of the 2025 tax period. The amount of corporate income tax exempt for the 2025 tax period as defined in this clause is equal to the total corporate income tax payable for 2025 divided by 12 months (or the number of months actually operating for new enterprises in 2025) and multiplied by the number of months of the 2025 tax period falling within the 2026 calendar year. From the 2026 tax period onwards, the provisions in Article 2 of this Decree shall apply.

According to the Ministry of Finance, to ensure synchrony with the non-taxable revenue threshold for business households and individuals, the tax-exempt income threshold for small enterprises is set at VND 01 billion/year. This ensures fairness in policy, helps taxpayers choose appropriate business models, and encourages business households to convert to corporate models with professional management regimes and better conditions to further improve their scale and business efficiency. This regulation also aims to institutionalize Resolution No. 68-NQ/TW, which sets a goal of striving for 2 million active enterprises in the economy by 2030, or 20 enterprises per thousand people.

Chính thức: Nâng ngưỡng chịu thuế với hộ kinh doanh lên 01 tỷ đồng/năm, áp dụng từ 1/1/2026