Tiếng Việt
From early 2026, several significant changes to tax regulations and legal liabilities for household businesses have officially come into effect. To help business owners stay compliant and optimize their tax planning, we have summarized 5 of the most frequently asked questions regarding the new laws.
1. What is the new threshold for PIT and VAT exemption?
Under the 2025 Personal Income Tax Law and the Amended VAT Law, the revenue threshold for tax exemption has been significantly increased to support small businesses.
Impact: This is a major jump from the previous 100 million VND limit, reducing the tax burden on micro-businesses.
Exemption Limit: Household businesses with an annual revenue of 500 million VND or less are exempt from both Personal Income Tax (PIT) and Value Added Tax (VAT).
2. How is tax calculated for revenue between 500 million and 3 billion VND?
For businesses in this bracket, the tax calculation formula has become more favorable:
- Personal Income Tax (PIT):Payable PIT = (Total Revenue – 500 million VND) x Tax Rate (Note: You only pay tax on the portion of revenue exceeding the 500 million threshold).
- Value Added Tax (VAT):
- Direct Method: Payable VAT = Revenue x Tax Rate.
- Deductible Method: If eligible and registered, Payable VAT = Output VAT – Deductible Input VAT.
3. Regulations for high-revenue businesses (Over 3 billion VND/year)
Pursuant to Decision 3389/QD-BTC, businesses with revenue exceeding 3 billion VND/year are now subject to stricter accounting standards:
- Mandatory VAT Method: You must apply the deductible method (Output VAT minus Input VAT).
- PIT Calculation: Based on actual profit.Payable PIT = (Revenue – Reasonable Expenses) x 17%
4. Administrative Fines: Individual vs. Organizational rates
Is it true that household businesses pay lower fines? Yes. According to the latest Decrees (Decree 125/2020/ND-CP and its 2025 amendments):
The Fine Rate: The monetary fine for a household business is exactly 1/2 (half) of the fine applied to a company (Organization) for the same violation.
Household Businesses are categorized as Individuals for penalty purposes.
5. Unlimited Liability: What owners need to know
According to Decree 168/2025/ND-CP, household businesses do not have a separate legal identity from the owner regarding debt.
Authorization: If established by family members, a notarized/certified written authorization for a representative is mandatory.
Unlimited Liability: The owner (or family members) is responsible for all business debts with their entire personal asset pool, not just the capital invested in the business.
Expert Consultant: Lawyer Pham Thanh Huu
Ho Chi Minh City Bar Association
