At what revenue level is tax payable?

This article will help you understand correctly.

✅ 4 revenue categories and corresponding tax obligations
✅ How to calculate VAT (Value Added Tax) for household businesses
✅ How to calculate personal income tax based on revenue and income
✅ Tax rates by industry

1. Four revenue streams (from 2026)

Group	Annual Revenue	VAT	Personal Income Tax
Group 1	≤ 500 million	No	No
Group 2	> 500 million - 3 billion	According to the ratio	Choose: by revenue OR income
Group 3	> 3 billion - 50 billion	According to the ratio	By income (17%)
Group 4	> 50 billion	According to the ratio	By income (20%)

Example: Identify your group

Mr. Minh sells clothes online, with an annual revenue of 400 million VND → Group 1 (tax-exempt)
Ms. Hoa opened a shoe shop, with a revenue of 1.2 billion VND/year → Group 2 (choose calculation method)
Mr. Nam runs a furniture business with an annual revenue of 8 billion VND → Group 3 (17% tax on profit)

2. Value Added Tax (VAT)

General formula

 Table of VAT rates by industry Thuế GTGT = Doanh thu tính thuế x Tỷ lệ thuế GTGT

Occupation	VAT rate
Distribution and supply of goods	1%
Services and construction without material procurement.	5%
Production, transportation, and construction that includes material procurement.	3%
Property rental	5%
Other business activities	2%

Example of calculating VAT

Ms. Lan sells cosmetics (belonging to the goods distribution group), with an annual revenue of 800 million VND.

VAT rate: 1%
Taxable revenue: 800 million - 500 million (exempt portion) = 300 million
VAT = 300 million × 1% = 3 million VND/year

3. Personal Income Tax

There are two ways to calculate personal income tax for household businesses:

Method 1: Calculating based on revenue (simple)

 Applies to: Thuế TNCN = Doanh thu tính thuế × Tỷ lệ thuế TNCN

Group 2 (if selected) and property rental activities.

Table of personal income tax rates by occupation

Occupation	Personal income tax rate
Distribution and supply of goods	0.5%
Services and construction services do not include material procurement.	2%
Production, transportation, and construction that includes material procurement.	1.5%
Property rental	5%
Providing digital content	5%
Other business activities	1%

Method 2: Calculation based on income (profit/loss)

 Applies to: Thuế TNCN = (Doanh thu - Chi phí được trừ) × Thuế suất

Group 2 (if chosen), Group 3, Group 4.

Note: Deductible expenses are those for which you have supporting invoices; expenses without invoices will not be deductible using this method.

Tax rate table by revenue group

Group	Annual Revenue	Personal Income Tax Rate
Group 2	> 500 million - 3 billion	15%
Group 3	> 3 billion - 50 billion	17%
Group 4	> 50 billion	20%

Important note

When calculating based on income : Profits are taxed, losses are not.
When calculating based on revenue : Taxes must be paid regardless of profit or loss (because they are calculated based on revenue, without deducting expenses).
Rental income : Only revenue is allowed, not earnings.

4. Comparing the two methods of calculating personal income tax.

Example: Ms. Hoa sells shoes, with an annual revenue of 1.2 billion VND.

Method 1: Calculation based on revenue

Taxable revenue: 1.2 billion - 500 million = 700 million
Personal income tax = 700 million × 0.5% = 3.5 million VND

Method 2: Calculation based on income (assuming expenses are 900 million)

Income = 1.2 billion - 900 million = 300 million
Personal income tax = 300 million × 15% = 45 million VND

→ In this case, calculating based on revenue is more advantageous .

Conversely, consider this example: Mr. Tuan runs a mobile phone business with an annual revenue of 2 billion VND.

Method 1: Calculation based on revenue

Taxable revenue: 2 billion - 500 million = 1.5 billion
Personal income tax = 1.5 billion × 0.5% = 7.5 million VND

Method 2: Calculation based on income (assuming expenses are 1.95 billion, profit is only 50 million)

Income = 2 billion - 1.95 billion = 50 million
Personal income tax = 50 million × 15% = 7.5 million VND

→ Both methods are the same. But if there is a loss (expenses > revenue), then no tax will be payable based on income!

💡 Conclusion: Which option should you choose?

Situation	Which one should I choose?
High profit margin (high profit)	Calculated by revenue
Low profit margin or loss	Based on income
No full expense invoice available.	Calculated by revenue
All expense invoices are available.	Based on income

5. Should I file my tax return monthly or quarterly?

Annual Revenue	Filing period
< 50 billion	By quarter
≥ 50 billion	By month

Group 1 (≤ 500 million): Only need to report revenue to the tax authorities 1-2 times/year.

6. Summary of tax obligations

Group	Revenue	VAT	Personal Income Tax	Declaration	Bill
1	≤ 500 million	No	No	Notifications are given 1-2 times per year.	Optional
2	500 million - 3 billion	1-5% of revenue	0.5-5% of revenue OR 15% of income	By quarter	Mandatory if > 1 billion
3	3 billion - 50 billion	1-5% of revenue	17% of income	By quarter	Obligatory
4	> 50 billion	1-5% of revenue	20% of income	By month	Obligatory

7. Frequently Asked Questions

7.1. Does the taxable revenue include the 500 million VND exemption?

VAT: Awaiting specific guidance.
Personal income tax based on revenue: 500 million VND can be deducted (only the amount exceeding the taxable value is calculated).
Personal income tax based on income: Calculated on the entire revenue (excluding the 500 million VND threshold).

7.2. How is the profit calculated when selling goods and renting out a house simultaneously?

Let's consider each activity separately:

Sales section: Apply the sales percentage.
Rental portion: Apply the rental rate (5%)

7.3. How is revenue calculated when selling through e-commerce platforms?

Amount already deducted from tax base: No need to recalculate.
Sales outside of the platform (Facebook, Zalo, etc.): Calculate and declare this yourself.

Checklist: Determine your tax obligations

Estimated total revenue for the whole year
Determine which group you belong to (1, 2, 3, or 4).
Identify your industry to determine the tax rate.
If you belong to group 2: Try both methods to choose the more advantageous one.
Determine the filing period (monthly/quarterly)
Prepare electronic invoices if revenue exceeds 1 billion VND.

Common mistakes

Thinking that revenue under 100 million VND doesn't require any declaration → It's still advisable to report your revenue to the tax authorities to avoid future problems.
Choosing the wrong tax calculation method → If you have low profits/losses and choose to calculate based on revenue, you will suffer losses.
Forgetting about sales revenue outside the official exchange → The tax authorities may collect back taxes and impose penalties.
Not keeping expense receipts → If you choose to calculate income without receipts, the expenses will not be deductible.

8. Conclusion

Determining how much revenue is subject to tax isn't just about numbers; it's about choosing the right tax calculation method that suits your business model and actual profit margin. There's no single right method for everyone; high-profit businesses often benefit from calculating based on revenue, while those with low profits or periods of losses should consider calculating based on income to reduce tax burden. The key is to clearly understand your own revenue, expenses, and sources of income. In the context of multi-channel sales, manual tracking is prone to errors and causes anxiety when tax filing deadlines arrive. GTG CRM helps consolidate revenue from multiple sales channels into one place, supporting sellers in clearly seeing their financial situation and being more proactive in determining their tax obligations, leading to more systematic and sustainable business practices. Learn more →