Issues in Practice
"How much revenue requires tax payment?" is the most common question for business households and individual business owners, especially in the context of tax policies being adjusted towards transparency and declaration based on actual revenue.
In reality, many cases do not incur tax obligations but still must fulfill tax declaration duties. Therefore, understanding the tax-liable revenue threshold and the scope of tax obligations correctly is a mandatory requirement to avoid errors.
How is Revenue Understood in Tax Law?
According to the regulations on tax management and taxes for business households and individuals, revenue is:
The total amount from the sale of goods, provision of services, commissions, support payments, surcharges, and other income received by business households and individuals, regardless of whether the money has been collected or not.
Revenue for determining tax obligations:
- Not based on profit
- Expenses are not deducted
- Independent of the payment method
- Independent of whether the sale is online or offline
Revenue Threshold Not Subject to Tax Under Current Regulations
Applicable Regulations
On December 10, 2025, the National Assembly passed the Law on Personal Income Tax (Amended).
According to the passed law:
- The revenue threshold not subject to tax for business households and individuals has been raised to 500 million VND/year.
The 500 million VND/year threshold is:
- Deducted before calculating tax at a percentage of revenue.
- Also the revenue threshold not subject to value-added tax.
Thus, business households and individuals with annual revenue not exceeding 500 million VND:
- Do not have to pay personal income tax.
- Do not have to pay value-added tax.
- But still must fulfill their tax declaration obligations according to regulations.
Tax declaration and payment are made according to:
- Monthly or quarterly declaration periods (depending on conditions).
- Actual revenue incurred during the period.
Read more: Which Expenses Can Be Tax Deducted When Doing Business?
Cases Where Annual Revenue Exceeds 500 Million VND
When revenue exceeds 500 million VND per year, tax obligations arise.
According to the Law on Personal Income Tax (Amended), the tax obligations that arise include:
- Must pay value-added tax.
- Must pay personal income tax.
VAT Calculation Method Based on Revenue
(Applicable to all groups of business households)
VAT = Revenue x Tax Rate
| Business Activity Group | Rate |
|---|---|
| Distribution, goods supply | 1% |
| Services, construction without material contracting | 5% |
| Manufacturing, transportation, services related to goods, construction with material contracting | 3% |
| Other business activities | 2% |
Personal Income Tax Calculation Method Based on Income
(Applicable to business households with annual revenue exceeding 500 million VND per year)
PIT = (Revenue - Expenses) x Tax Rate
| Taxable Income | Tax Rate |
|---|---|
| From 500 million to 3 billion VND | 15% |
| Over 3 billion to 50 billion VND | 17% |
| Over 50 billion VND | 20% |
Note:
- Business households with annual revenue from 500 million to 3 billion VND/year can choose to calculate PIT based on income or revenue.
- Business households with annual revenue over 3 billion VND/year are required to calculate PIT based on income (rental of property is calculated based on revenue).
Personal Income Tax Calculation Method Based on Revenue
(Applicable to business households with annual revenue from 500 million to 3 billion VND/year)
PIT = Revenue (calculated above the tax-exempt revenue of 500 million VND) x Tax Rate
| Business Activity Group | Rate |
|---|---|
| Distribution, goods supply | 0.5% |
| Services, construction without material contracting | 2% |
| Property rental activities | 5% |
| Manufacturing, transportation, services related to goods, construction with material contracting | 1.5% |
| Information technology product and service provision | 5% |
| Other business activities | 1% |
How to Determine Revenue to Compare with the 500 Million VND Threshold
Revenue is determined according to the following principles:
- Calculated by calendar year.
- Aggregates all business activities.
- Regardless of industry.
- Regardless of sales channel.
In cases where the business does not operate for a full 12 months, revenue is calculated based on actual income in the year, not annualized.
Tax Declaration Obligation Even Without Tax Payment
Even if annual revenue does not exceed 500 million VND, business owners may still be required to:
- Perform periodic tax declarations.
- Provide information when requested by tax authorities.
- Explain revenue during audits or data reconciliation.
Therefore, not having to pay tax does not mean not having to declare tax.
Read more: In 2026, Will Business Households Declare Taxes Monthly or Quarterly?
Conclusion
In summary:
- Revenue not exceeding 500 million VND/year: no VAT payable, no PIT payable according to the amended PIT Law.
- Revenue exceeding 500 million VND/year: tax obligations arise according to regulations.
- Revenue is gross revenue, not profit.
- Tax declaration obligations must still be fulfilled, even if no tax is payable.
Understanding correctly from the beginning is the only way to avoid legal risks in long-term business operations.
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