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Vietnam business household tax: end of the lump-sum method

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Vietnam business household tax changed on 1 January 2026. The lump-sum method is over, and household businesses now declare their own revenue and pay their own tax. Small households under 500 million dong a year owe no VAT or personal income tax, but they must still report their revenue.

Sources: Vietnam News, "Tax authority eases transition to new tax declaration system for household businesses", 16 January 2026; VietnamNet, "VN's small business tax overhaul kicks off with 18,300 voluntary conversions", 3 January 2026.

What the lump-sum method was, and what replaced it

For years, a tax officer set a fixed amount for each small household business. The household paid that amount no matter how the year went. This was the lump-sum method, called "thue khoan" in Vietnamese.

From 1 January 2026 this method no longer applies. Households and individual businesses now use self-declaration and self-payment. They report what they actually earn and calculate the tax from it. The change follows Resolution 68-NQ/TW, which set 2026 as the deadline for ending the lump-sum method.

The Ministry of Finance approved the plan in October 2025. It said the aim was to simplify procedures, speed up digital tools and cut compliance costs. The National Assembly also passed the amended Law on Personal Income Tax on 10 December 2025, which set the new rules for 2026.

Sources: VietnamNet, 3 January 2026; Viet Nam News, "Viet Nam puts an end to lump-sum tax, aiming for a level playing ground", 27 October 2025.

The 500 million dong threshold

The tax-free line is now 500 million dong a year, about US$20,000. An earlier Finance Ministry plan in October 2025 spoke of 200 million dong, and the final law went higher.

A household below the line pays no VAT and no personal income tax. It does not stay invisible, though. It must report its real revenue to the tax office by 31 January each year.

Above the line, the household pays tax. VAT is a set percentage of revenue under VAT Law No. 48/2024/QH15.

Sources: VietnamNet, 3 January 2026; Vietnam News, 16 January 2026.

Two ways to work out personal income tax

For personal income tax, the rate depends on how much a household earns in a year.

  • 500 million to 3 billion dong: 15% of net income (revenue minus costs), or a rate on revenue above 500 million dong.
  • 3 billion to 50 billion dong: 17% of net income.
  • Over 50 billion dong: 20% of net income.

Households in the first band may pick either method. Once chosen, the method must stay the same for two years. If revenue passes 3 billion dong for two years in a row, the household must switch to the net income method.

Real estate rental, apart from lodging, is taxed at 5% on revenue above 500 million dong a year.

Sources: VietnamNet, 3 January 2026.

Invoices, records and filing

A household expecting more than 1 billion dong in revenue needs an e-invoice. VietnamNet lists practical steps for owners.

  • Review 2025 revenue and project 2026 income.
  • Choose a tax group and a calculation method.
  • Register for e-invoices if revenue will pass 1 billion dong.
  • Open a separate bank account for the business, if there is none.
  • File with the right e-declaration form, online or at the tax office, including through the eTax Mobile app.

If revenue is over the threshold, owners should also count unsold stock at the point of change.

Sources: VietnamNet, 3 January 2026.

Support from the tax authority

The tax authority has said it will lead with help in the first months of 2026. It says guidance, reminders and live support come before inspections or fines for procedural mistakes. Rules on penalties for wrong invoice use and late filing have been eased.

One promise matters for many owners. Revenue declared for the 2026 tax year will not be used to claim back taxes under the old lump-sum regime.

Owners still raise questions, such as how to invoice small sales and how to treat delivery fees and marketplace sales. The tax department says some charges, such as delivery fees, may be left out of reported revenue where that is right. Local tax departments also ran a 60-day campaign to push voluntary switching. By the end of 2025, more than 18,300 households had moved to self-declaration early, and more than 3,200 had turned into formal enterprises.

Sources: Vietnam News, 16 January 2026; VietnamNet, 3 January 2026.

What owners should do now

First, work out which band your household falls in. Second, if you are under 500 million dong, make sure the revenue report reaches the tax office by 31 January each year. Third, if you are over it, pick a method and keep honest sales records. Fourth, ask your local tax office or an accountant when a rule is unclear. Details of the guidance may still be added, so check the official tax portal before you file.

Sources: Vietnam News, 16 January 2026; VietnamNet, 3 January 2026.

Sources

  • VietnamNet, "VN's small business tax overhaul kicks off with 18,300 voluntary conversions", 3 January 2026.
  • Vietnam News, "Tax authority eases transition to new tax declaration system for household businesses", 16 January 2026.
  • Viet Nam News, "Viet Nam puts an end to lump-sum tax, aiming for a level playing ground", 27 October 2025.