Starting in 2026, Vietnam will shift its tax policy for household and individual businesses, classifying them into four groups based on annual revenue, with tailored tax management for each.

Proposal to increase tax-exempt revenue threshold to $15,700

At a tax support policy discussion organized by the General Department of Taxation on June 19, Nguyen Thi Thanh Hang, head of the International Tax Policy Division, announced that the fixed-tax regime would be eliminated beginning January 1, 2026.

Household and individual businesses will be required to self-declare and pay taxes, adopt accounting practices, issue invoices, and comply with post-inspection by tax authorities.

Under the proposed amended Law on Tax Administration, the tax sector will categorize household and individual businesses based on revenue:

Group 1: Annual revenue under $7,850 (200 million VND) – exempt from taxation.
Group 2: Revenue below $39,200 (1 billion VND) – subject to taxation.
Group 3: Revenue between $39,200 and $117,600 (1-3 billion VND) for agriculture, industry, construction; and $39,200 to $392,000 (1-10 billion VND) for commerce and services.
Group 4: Revenue above $392,000 (10 billion VND).

“Households will self-declare income, with tax authorities performing post-audits using data. Violators will be penalized and taxed accordingly. Groups 1 and 2 are encouraged to use e-invoices, with a roadmap requiring them from 2027-2028,” said Hang.

Group 3 and 4 must use tax-coded e-invoices or those generated via point-of-sale software. In terms of bookkeeping, Groups 1 and 2 only need to log income and expenses using a Finance Ministry template. Group 3 will follow simplified accounting, while Group 4 must comply with Circular 88 standards.

To promote small business growth, the tax authority recommends amending tax laws to increase the exemption threshold for VAT and personal income tax from $7,850 to $15,700 per year. It also suggests adjusting personal income tax rates based on revenue scale.

The agency further proposes eliminating the “household business” designation in favor of “individual business,” using the personal ID number of the business representative as the tax code for consistency. It recommends removing certain exemptions from business registration in Decree 01 to ensure all businesses are properly registered and monitored.

Affordable software packages for digital transformation

Mai Son, Deputy Head of the General Department of Taxation, emphasized that during this transition from fixed to self-declared taxation, the agency will collaborate with tech firms - especially software providers - to tailor accounting and e-invoice solutions to specific business types and sizes. The goal is to ensure affordability, ease of use, and smooth digital adoption.

Son stressed that custom solutions for each taxpayer segment will improve compliance and reduce administrative burdens while accelerating digital transformation.

At the forum, a representative from Viettel noted that most household businesses lack financial and accounting knowledge, especially in tax declaration. Hiring staff or using outside accounting services can be costly and hinder the transition.

To address this, policies should include financial education and simple, accessible tech tools. Viettel claims its service packages meet the needs of 80% of businesses, with support policies in place for the remaining 20%. However, they cautioned against long-term free service offerings, which could burden providers.

Similarly, VNPT introduced a cost-effective software package that includes e-invoicing, digital signatures, and accounting - priced at about the cost of a bowl of pho per month.

Nguyen Le