The tax threshold for business households in light of Decree No. 141/2026/ND-CP

From small alleyway coffee shops, family-run grocery stores, and online clothing boutiques to livestreaming storefronts on e-commerce platforms, all contribute to the vibrant and dynamic flow of Vietnam's economy. Behind the scenes, however, lies considerable pressure from operating costs, market competition, and, most notably, tax obligations to the State.

In this context, on April 29, 2026, the Government issued Decree No. 141/2026/ND-CP, effective from January 1, 2026, amending and supplementing certain tax regulations for business households and individual business operators. A notable point of the decree is the increase in the taxable revenue threshold to VND 1 billion/year, thereby contributing to reducing tax pressure, lowering declaration costs, and creating favorable conditions for business households to maintain more stable operations.

1. Tax Thresholds & Calculation Methods for Business Households:

Classification

Terminology explanation:

DT: Revenue (Doanh thu)

GTGT: Value-Added (Giá trị gia tăng)

TNCN: Personal Income (Thu nhập cá nhân)

VAT: Value-Added Tax

HĐĐT: Electronic Invoice (Hóa đơn điện tử)

% VAT/TNCN: Value-Added Tax / Personal Income Tax rates

Note:

Illustrative example of tax calculation: "Meo Mun U" business household, selling Bun Bo (beef noodle soup), has a revenue of approximately VND 1.5 billion/year, falling into the revenue tier of over VND 1 billion to VND 3 billion. Accordingly, Meo Mun U business household must pay the following taxes:

(1) Applicable VAT: 3% of revenue;

(2) PIT can be calculated using one of two methods:

(i) 1.5% × (Revenue - tax threshold); or

(ii) 15% × (Revenue - expenses).

Additionally, pursuant to Clause 6, Article 10 of Resolution No. 198/2025/QH15, from January 1, 2026, business households are no longer required to pay the licensing fee (business license tax).

In this case:

VAT payable: 1,500,000,000 x 3% = VND 45,000,000 (a)

If applying the revenue-based PIT calculation method:

1.5% x (1,500,000,000 – 500,000,000) = VND 15,000,000 (b)

Thus, (a) + (b), the Meo Mun U business household must pay a total of VND 60,000,000 for the year.

2. Tax rates by business sector:

The tax rates applied to business households are not fixed but depend on the specific type of business activity.

3. Taxes on business households on e-commerce platforms:

For business households operating on e-commerce platforms such as Shopee, TikTok Shop, Lazada, etc., the e-commerce platform will deduct and pay taxes on their behalf through a direct data connection mechanism with the tax authorities, as stipulated in Decree No. 117/2025/ND-CP, according to the table below:

4. Recommendations for business household owners in the current context:

First, proactively monitor actual revenue: Regularly check daily, monthly, and yearly revenue to accurately determine whether you fall into the taxable threshold. In reality, there are many cases where the generated revenue exceeds the threshold, but the business owner does not monitor it closely, leading to under-declaration or late declaration to the tax authorities.

Current revenue can be cross-checked from various sources, such as:

Second, fully retain invoices and documents for incoming and outgoing goods: Keeping invoices, documents, statements, or sales data is an important basis for explaining to tax authorities during tax audits or inspections. This is also the foundation for determining valid revenue and expenses if the business household applies the tax calculation method based on revenue minus expenses.

Third, be honest in declaring revenue: Fully and accurately declare all income from business activities. This includes sales revenue, service fees, surcharges, commissions, or other related receipts, all of which can be determined as taxable revenue.

DL PINNACLE LAW FIRM LLC