The Ministry of Finance has proposed to raise the annual tax-free revnue threshold for household businesses proposed to increase from VND100 million ($3,790) to VND500 million.
Under a draft previously submitted to the National Assembly, the tax-free revenue threshold for a household business is proposed at VND200 million per year, doubling the current threshold.
As of October 2025, over 2.54 million business households regularly pay taxes. If the newly proposed revenue threshold is applicable, it is estimated that about 2.3 million business households will be exempted from income tax, accounting for approximately 90% of the total business households currently paying this tax.
Accordingly, the sum (the newly proposed tax-free revenue threshold) would also be deducted before calculating taxes based on revenue, if a business household records an annual revenue higher than the proposed threshold.
The proposal was outlined in a recent report submitted by the ministry to the Government on revision to the draft amended Law on Personal Income Tax.
According to the ministry, the VND200 million revenue threshold for tax exemption is no longer appropriate and should be reviewed to ensure fairness with salaried taxpayers.
The ministry also proposed introducing an income-based taxation mechanism for household and individual businesses with revenues from VND500 million to VND3 billion per year, with a tax rate of 15 per cent – equivalent to the corporate income tax rate applied to enterprises with revenues below VND3 billion under the Law on Corporate Income Tax.
The ministry also proposed amending the Law on Value Added Tax to raise the annual revenue threshold for exemption from VND200 million to VND500 million to ensure consistency with the upcoming Law on Personal Income Tax.
Google translate