The Practical Question
"How much revenue needs to be taxed?" is the most common question for business households and individual businesses, especially in a context where tax policies are being adjusted towards transparency and declaration based on actual revenue.
In reality, many cases do not incur tax obligations but still have to fulfill tax declaration duties. Therefore, understanding the correct thresholds for taxable revenue and the scope of tax obligations is mandatory to avoid errors.
How is Revenue Understood in Tax Law?
According to 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 fees, surcharges, and other receipts that business households and individual businesses are entitled to, regardless of whether the money has been collected or not.
Revenue for determining tax obligations:
- Not based on profit
- Excluding costs
- Independent of payment method
- Independent of selling online or offline
Revenue Threshold Not Requiring Tax Payment 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 for business households and individual businesses not required to pay tax has been raised to 500 million VND/year
The amount of 500 million VND/year is:
- Deducted before calculating tax at a rate on revenue
- Also the threshold for VAT-exempt revenue
Thus, business households and individual businesses with annual revenue not exceeding 500 million VND:
- Are not required to pay personal income tax
- Are not required to pay value-added tax
- But must still fulfill their tax declaration obligations as prescribed
Tax declaration and payment are made according to:
- Monthly or quarterly declaration periods (depending on conditions)
- Actual revenue generated during the period
Cases with Revenue Exceeding 500 Million VND/Year
When revenue exceeds 500 million VND/year, tax obligations begin to arise.
According to the Law on Personal Income Tax (amended), the arising tax obligations include:
- Payment of value-added tax
- Payment of 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, provision of goods | 1% |
| Services, construction without subcontracting raw materials | 5% |
| Production, transportation, services related to goods, construction with subcontracted raw materials | 3% |
| Other business activities | 2% |
Personal Income Tax Calculation Method Based on Income
(Applicable to business households with annual revenue exceeding 500 million VND/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 apply PIT calculation based on income or revenue
- Business households with annual revenue over 3 billion VND/year must calculate PIT based on income (rental income is calculated PIT 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) x Tax Rate
| Business Activity Group | Rate |
|---|---|
| Distribution, provision of goods | 0.5% |
| Services, construction without subcontracting raw materials | 2% |
| Property rental activities | 5% |
| Production, transportation, services related to goods, construction with subcontracted raw materials | 1.5% |
| Provision of digital information products and services | 5% |
| Other business activities | 1% |
How to Determine Revenue for Comparison with the 500 Million VND Mark
Revenue is determined according to the following principles:
- Calculated for the calendar year
- Consolidated across all business activities
- Regardless of industry
- Regardless of sales channel
In cases where business operations are less than 12 months, revenue is calculated based on actual income generated during the year, not annualized.
Tax Declaration Obligation Even When No Tax is Due
Even if revenue does not exceed 500 million VND/year, businesses may still be required to:
- Perform periodic tax declarations
- Provide information when requested by tax authorities
- Explain revenue during inspections and data reconciliation
Therefore, not owing tax does not mean not having to declare taxes.
Read more: In 2026, Will Business Households Declare Taxes Monthly or Quarterly?
Conclusion
This can be summarized as follows:
- Revenue not exceeding 500 million VND/year: no VAT payable, no PIT payable under the amended Personal Income Tax Law that has been passed
- Revenue exceeding 500 million VND/year: tax obligations arise as prescribed
- 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 for long-term business operations.
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