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MINISTRY
OF FINANCE
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SOCIALIST
REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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No:
3389/QD-BTC
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Hanoi,
October 06, 2025
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DECISION
APPROVING THE
SCHEME “CONVERSION OF TAX ADMINISTRATION MODEL AND METHODS FOR HOUSEHOLD
BUSINESSES AFTER THE FIXED TAX ABOLISHMENT”
Minister of Finance
Pursuant to Resolution
No. 68-NQ/TW dated May 04, 2025 of the Politburo of Vietnam on the development
of private economy;
Pursuant to Resolution
No. 198/2025/QH15 dated May 17, 2025 of the National Assembly of Vietnam on
certain mechanisms and policies for the development of the private economy;
Pursuant to Resolution
No. 138/NQ-CP dated May 16, 2025 of the Government of Vietnam on the issuance of
action plan to implement Resolution No. 68-NQ/TW dated May 4, 2025
of the
Politburo of Vietnam on the development of the private economy;
Pursuant to Resolution
No. 139/NQ-CP dated May 17, 2025 of the Government of Vietnam on the issuance
of action plan to implement Resolution No. 198/2025/QH15 dated May 17, 2025 of
the Politburo of Vietnam on certain mechanisms and policies for the development
of the private economy;
Pursuant to Decree No.
29/2025/ND-CP dated February 24, 2025 of the Government of Vietnam defining the
functions, tasks, powers and organizational structure of the Ministry of
Finance of Vietnam; Decree No. 166/2025/ND-CP dated June 30, 2025 of the
Government of Vietnam amending and supplementing some provisions of Decree No.
29/2025/ND-CP dated February 24, 2025 of the Government of Vietnam regulating
the functions, tasks, powers, and organizational structure of the Ministry of
Finance;
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At the request of the
Director of Department
of Taxation.
DECIDES:
Article
1.
Approving the Scheme “conversion of tax administration
model and methods for household businesses after the fixed tax abolishment”
(hereinafter referred to as “the Scheme”) with the following contents:
I.
VIEWPOINTS AND GOALS
1. Viewpoints
The tax administration
model and methods for household businesses are developed in accordance with the
viewpoints, goals, tasks, and solutions for the development of the private
economy as outlined in Resolution No. 68-NQ/TW of the Politburo of Vietnam,
Resolution No. 198/2025/QH15 of the National Assembly of Vietnam, Resolution
No. 138/NQ-CP, No. 139/NQ-CP of the Government of Vietnam, and Decision No.
2260/QD-BTC dated June 30, 2025 of the Minister of Finance.
2. Goals
2.1. Overall goals
To modernize the tax
administration for household businesses, abolish fixed tax, establish a level
playing field between household businesses and enterprises, promote
administrative procedure reform and digital transformation, reduce compliance
costs, focus on provide support to taxpayers, and facilitate comprehensive
private economic development.
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- Legislative documents
and guiding documents related to tax administration for household businesses
shall be supplemented or issued according to the plan.
- Ensure the
application of self-declaration and self-payment of taxes by household
businesses from January 1, 2026.
- Simplify and reduce
at least 30% of the processing time for administrative procedures, at least 30%
compliance costs, and continue to reduce in the following years in accordance
with Resolution No. 68-NQ/TW.
- Ensure information
access and support provision from tax authorities on the conversion from fixed
tax payment method to declaration method, conversion from household businesses to
enterprises for 100% of household businesses.
- Ensure registration
and use of electronic invoices generated from POS cash registers for 100% of
regulated entities according to Government Decree No. 70/ND-CP.
- Ensure convenience
and ease for 100% household businesses when carrying out tax procedures by
electronic means.
II.
Goals and solutions
1.
Regarding institution and policy perfection
- Amend Law on Tax
administration and guiding documents to abolish the fixed tax payment method
for household businesses; review Decrees and Circulars for consistent
amendments to ensure synchronized implementation and result achievement.
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- Review and amend Law
on fees and charges, Law on assistance for small-sized enterprises; propose to
formulate a Law on individual business to elaborate the regulations set forth
in Resolution No. 68-NQ/TW dated May 04, 2025 on the development of the private
economy.
- Amend and supplement
Circular No. 88/2021/TT-BTC dated October 11, 2021 on guidance on accounting
for household businesses and individual businesses; Circular No.
132/2018/TT-BTC on guidance on accounting for micro-enterprises; Circular No.
133/2016/TT-BTC on guidance on accounting for small and medium-sized
enterprises.
- Study and formulate a
new tax administration model for household businesses after abolishing fixed
tax, classified them according to revenue scale to determine the appropriate
tax calculation method/tax administration model, determine the revenue
threshold for applying POS cash register-generated invoices; define the roles
and functions of tax authorities in managing household businesses, avoiding
gaps or overlapping tasks when changing management methods.
- Develop tax
administration procedures for household businesses declaring taxes, tax
inspection procedures at the tax authority's head offices, and inspections at
household business's head offices in line with the overall process redesign
program of the Tax sector.
2.
Perfecting modern tax administration methods, replacing fixed tax, converting
to declaration methods where taxpayers self-declare and self-pay taxes
- Innovate and
diversify propaganda and support activities for household businesses before and
during the conversion from fixed taxes payment to tax declaration; develop and
implement support programs for household businesses according to industries and
scales; develop training materials for accounting training provision for
household businesses to facilitate tax declaration, compliance with amended
circulars on accounting. Research and apply advanced technologies (AI, Chatbot,
etc.) to improve the quality of system support, applications, and respond to support
requests promptly and modernly.
- Strengthen
administrative procedure reform for household businesses, simplify forms and
declarations to reduce processing time by at least 30%, reduce compliance costs
by at least 30%, and continue to reduce in the following years according to
Resolution No. 68-NQ/TW; improve the e-tax service provision, aiming to apply
e-declaration forms that automatically suggest revenue data from the invoicing
system, facilitate and reduce compliance costs for household businesses.
- Monitor compliance
with household businesses applying risk management methods to detect violations
against tax laws, avoid commercial fraud through inspection and supervision of
sales invoices of household businesses, and prevent invoice trading; formulate programs
for thematic inspection, industrial inspection, and regional inspection for
household businesses; formulate and implement effective debt collection
measures and apply appropriate enforcement measures for household businesses. Research
specific tax administration solutions for household businesses and individual
businesses engaging in e-commerce that are suitable for the specific operations
of this type of business.
- Research and develop
a new tax administration model for household businesses after abolishing the fixed
tax; restructure the organization and personnel suitable for the tax
administration model for household businesses according to the tax declaration method Compile
operational materials and organize training to improve tax management
official’s capacity, provide assistance for household businesses; intensify
discipline in the tax official personnel.
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3.
Intensifying cooperation with relevant parties in tax administration for
household businesses
- Cooperate with
relevant ministries and departments to implement policies and technical
solutions effectively; closely cooperate with the Ministry of Public Security
in standardizing
tax identification
numbers (hereinafter referred to as “TIN”) of individuals to use a personal
identification number (hereinafter referred to as “PIT”) instead.
- Strengthen
connectivity, integration, and data sharing with ministries, departments, and
relevant units to closely monitor the activities of household businesses after converting
from fixed tax to tax declaration method, timely detect and identify tax risks
or violations against laws.
- Cooperate with
People's Committees at all level to issue Regulation on cooperating in tax
administration for household businesses after abolishing fixed tax, review and
prevent deficiencies; share and update information on registration, suspension,
or shut down of household businesses; cooperate in tax debt collection;
establish a single-window system to provide assistance for conversion into
enterprises; propose People's Committees of provinces/cities to provide credit
assistance programs, premises for household businesses to convert into
enterprises.
- Cooperate with local
associations and unions to engage young household businesses, small traders,
etc., in compliance with tax laws and policies; branches of the Vietnam Chamber
of Commerce and Industry (VCCI) to provide assistance for connecting large,
medium, small enterprises to create synergies and ensure that tax administration for
household businesses shall be carried out consistently and smoothly.
III.
IMPLEMENTATION
1. Task assignment
- The Taxation
Department shall lead and organize the implementation of this Scheme; cooperate
with media agencies to actively disseminate and comprehend the contents of the
Scheme; promote the spirit, creativity, and proactiveness of tax officials
throughout the Tax sector to strive for successful achievement of the goals and
specific tasks outlined in the Scheme. - The heads of units affiliated in the
Ministry of Finance shall follow the overall goals, specific targets, and key
tasks of the Scheme to implement the assigned functions and tasks; cooperate
and organize the implementation of the plan according to the outlined roadmap;
provide guidance, inspect, and supervise the implementation of the plan.
- The Taxation
Department shall, based on the assigned tasks, annually report on the results
of implementing the Scheme to the Ministry of Finance by December 31.
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2. Funding for
implementing the Scheme
Funding for
implementing the Scheme shall comply with the applicable laws.
Article
2.
This Decision shall come into force from the date on which
it is signed
Article
3.
The Director of the Taxation Department, Chief of the
Office of the Ministry of Finance, heads of units affiliated in the Ministry of
Finance, and relevant organizations and individuals shall implement this
Decision.
ON THE BEHALF OF MINISTER
DEPUTY MINISTER
Cao Anh Tuan
LIST OF DOCUMENTS
ENCLOSED WITH THE DECISION TO APPROVE THE SCHEME
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The Scheme “conversion
of tax administration model and methods for household businesses after the fixed
tax abolishment and 6 schedules and charts:
1. Chart 1: Comparison
of legal provisions between household businesses and small enterprises
2. Chart 2: Some
international experiences in tax administration for household businesses
3. Chart 3: State
Budget revenue results of household businesses in 2023-2024, 6 months of 2025.
4. Schedule 1:
Detailed implementation plan of the Scheme
1.1. Review and improve
tax policies for household businesses
1.2. Improve tax
administration methods
1.3. Application of
digital technology, e-invoices, development of shared digital platforms.
1.4. Improve risk
management mechanisms, taxpayer compliance management.
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5. Schedule 2: Tax
administration model for household businesses after the fixed tax abolishment
6. Schedule 3: Campaign
model to provide assistance for taxpayers
THE SCHEME
CONVERSION OF TAX
ADMINISTRATION MODEL AND METHODS FOR HOUSEHOLD BUSINESSES AFTER THE FIXED TAX
ABOLISHMENT
TABLE OF CONTENTS
1. INTRODUCTION
1.1. Urgency of the
Scheme
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1.3. Regulated
entities, scope of the Scheme
2. THEORETICAL BASIS
2.1. Overview of
household businesses and current policies
2.2. Tax policies and
tax administration for household businesses compared to enterprises
2.3: Some international
experiences in tax administration for household businesses
3. TAX ADMINISTRATION
SITUATION FOR HOUSEHOLD BUSINESSES
3.1. Achieved results
3.2. Limitations,
challenges, and causes:
3.2.1. Limitations,
challenges
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4. TASKS AND SOLUTIONS
TO IMPROVE POLICIES AND METHODS OF TAX ADMINISTRATION FOR HOUSEHOLD BUSINESSES
4.1. Advisory and
directive role of the Ministry of Finance
4.2. Review and
improvement of tax policies for household businesses
4.3. Improvement of
modern tax administration, replacement of fixed taxed method with tax
declaration method, self-declaration and self-payment by taxpayers
4.4. Intensification of
digital technology, e-invoices, development of shared digital platforms
4.5. Assistance and
encouragement for household businesses to convert into suitable models
4.6. Improvement of
implementation capacity of tax authorities and cooperation with local
authorities
5. IMPLEMENTATION
5.1. Responsibilities
of units affiliated to Ministries
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6. IMPLEMENTATION
FUNDING
7. CONCLUSION
LIST OF SCHEDULES AND CHARTS
- Chart 1: Comparison
of legal provisions between household businesses and small enterprises
- Chart 2: Some
international experiences in tax administration for household businesses
- Chart 3: State Budget
revenue results of household businesses in 2023-2024, 6 months of 2025.
- Schedule 1: Detailed
implementation plan of the Scheme
1.1. Review and improve
tax policies for household businesses
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1.3. Application of
digital technology, e-invoices, development of shared digital platforms.
1.4. Improve risk
management mechanisms, taxpayer compliance management.
1.5. Propaganda and
assistance for taxpayers
- Schedule 2: Tax
administration model for household businesses after the fixed tax abolishment
- Schedule 3: Campaign
model to provide assistance for taxpayers
1.
INTRODUCTION
1.1.
Urgency of the Scheme
The development of
private economy has become an important driving force of the national economy,
the field of household businesses contributes to growth and state budget
revenue, and addresses employment and social welfare issues. However, the main
tax administration method for household businesses currently is the fixed
tax method, which reveals many shortcomings in terms of fairness,
transparency, and effectiveness. A large proportion of household businesses
still pay taxes using fixed tax method, fail to implement or incompletely
implement accounting, invoices, and records, causing difficulties in tax
administration and posing risks of tax revenue loss.
Furthermore, tax
policies and tax administration procedures for household businesses differ
significantly from those of enterprises, inadvertently creating advantages
model in terms of legal compliance costs for the household business compared to
enterprises. It requires fundamental innovation in tax policies and tax
administration methods for household businesses to create an equal business
environment, encourage development, and covert to enterprise models when
meeting conditions.
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On the basis of a high
level of concentration, for ensuring implementation of the political and
strategic goals of the Finance sector in general and the Taxation in particular
in line with the guidelines of the Communist Party of Vietnam and the State of
Vietnam, the Ministry of Finance issued an Action Plan to implement Resolution
No. 68-NQ/TW together with Decision No. 2260/QD-BTC dated June 30, 2025 and
directed the Tax Department to issue Decision No. 2456/QD-CT on July 8, 2025,
with the goal of completely ending the application of fixed tax method,
converting to the
declaration method, self-declaring and self-paying for household businesses by January
1, 2026.
Starting from the
urgent need associated with tax administration practices, ensuring that the
conversion process shall be smooth and effective, not affect business operations
of household businesses, and not disrupt the state budget revenues, ensuring
successful cooperation in state management and tax administration for household
businesses and individual businesses, contributing to and setting a foundation
for the private economy sector to increase opportunities to become a
significant driving force for the overall development of the country, the
Ministry of Finance has developed the Scheme “conversion of tax
administration model and methods for household businesses after the fixed tax
abolishment”.
1.2.
Goals and tasks of the Scheme
The Scheme aims to
address theoretical, practical, and international experience issues in tax
administration for household businesses and individual businesses, thereby
proposing fundamental and comprehensive innovative solutions in tax
administration, improving the tax administration capacity, and preventing tax
losses in the period of 2025 - 2030.
The overall goal of the
Scheme is to modernize the tax administration for household businesses, eliminate
fixed tax, establish a level playing field between household businesses and
enterprises, promote administrative procedure reform and digital
transformation, reduce compliance costs, focus on provide support to taxpayers,
and facilitate comprehensive private economic development.
Specific goals include:
- Legislative documents
and guiding documents related to tax administration for household businesses
shall be supplemented or issued according to the plan.
- Ensure the
application of self-declaration and self-payment of taxes by household
businesses from January 1, 2026.
- Simplify and reduce
at least 30% of the processing time for administrative procedures, at least 30%
compliance costs, and continue to reduce in the following years in accordance
with Resolution No. 68-NQ/TW.
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- Ensure registration
and use of electronic invoices generated from POS cash registers for 100% of
regulated entities according to Government Decree No. 70/ND-CP.
- Ensure convenience
and ease for 100% household businesses when carrying out tax procedures by electronic
means.
1.3.
Regulated entities and scope of the Scheme
1.3.1. Regulated
entities of the Scheme
- Household businesses
and individual businesses (hereinafter referred to as “household businesses”) under
the current tax administration and registered business entities arising that
are subject to tax administration.
- Tax authorities at
all levels performing tax administration functions for household businesses.
- Other organizations
and individuals relevant to activities of household businesses.
1.3.2. Scope of study
of the Scheme
Scope of study of the
Scheme includes:
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(ii) Management
methods, operational procedures of tax authorities in managing household
businesses;
(iii) Technological
solutions, database assistance for household businesses;
(iv) Propaganda,
assistance, and cooperation with relevant parties in managing household
businesses.
The Scheme focuses on
the contents to be implemented from now until 2026 to ensure the successful
implementation of the policy to abolish the fixed tax and addressing long-term
directions in tax administration for household businesses in the post-fixed tax
period. The research and data in the Scheme shall be formulating on a comprehensive
assessment and review of the general situation nationwide and relevant
international experiences. <0}
1.3.3. Structure of the
Scheme
In addition to the
introduction, conclusion, and list of references, the structure of the Scheme
includes:
- The theoretical basis
of the Scheme.
- The situation of tax
administration for household businesses and individual businesses
- Solutions to improve
tax administration policies and methods for household businesses.
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2.1.
Overview of household businesses and applicable policies
“Household business”
is established by individual or household members whose liability for its
operation is equal to their total assets. “Individual business” refers to
an individual who engages in business operations for which liability is equal
to their total assets[1]. In terms of tax obligations,
household businesses must register for taxes and declare and pay various taxes
similar to enterprises, including Value Added Tax (VAT) and Personal Income Tax
(PIT) arising from business operations. However, the applicable tax laws allow
two tax calculation methods for household businesses: Fixed tax method and
declaration method.
- Household
businesses paying fixed tax: applicable to household businesses, individual
businesses that fail to implement or incompletely implement accounting,
invoices, and records. The tax authority determines the tax payable
under the fixed tax method periodically (usually annually) based on estimated
revenue and the tax rate on revenue. To be specific: VAT and PIT for household
businesses paying fixed tax shall be calculated by revenue subject to fixed tax
x (multiply) the corresponding tax rate by business line (for example: (i)
goods distribution: VAT 1%, PIT 0.5%; (ii) services: VAT 5%, PIT 2%; (iii)
construction with materials: VAT 3%, PIT 1.5%; and (iv) property leasing: VAT
5%, PIT 5%, etc.) Household businesses paying fixed tax do not have to keep
accounting records, do not have to submit monthly/quarterly tax returns;
instead, they submit a single tax declaration at the beginning of the year
(Form 01/CNKD) for the tax authority to determine the revenue subject to fixed
tax and fixed tax payable for the whole year. If a household business paying fixed
tax generates invoices (authenticated e-invoices issued at each time when a
transaction occurs), they must declare and pay additional tax for revenue on
each invoice prior to issuing the invoice.
From June 1, 2025,
according to Decree No. 70/2025/ND-CP, household businesses paying fixed taxes
that have annual revenue of at least VND 01 billion engaged in direct sales of
goods/ provision
of services to consumers (commercial centers, supermarkets, retail stores
(excluding cars, motorcycles, motorbikes, and other motor vehicles), dining,
restaurants, hotels, passenger transport services, direct support services for
road transport, art services, entertainment, cinema operations, other personal
services specified in Vietnam Standard Industrial Classification using
e-invoices generated from cash registers that are digitally connected to tax
authorities) must switch to using e-invoices generated from cash registers that
are digitally connected to tax authorities. This is the first step to increase
transparency in the revenue of household businesses paying fixed tax, creating
the ground for abolishment of fixed tax in the near future.
- Household
businesses declaring taxes: Apply to large-scale household businesses or
those voluntarily choosing to declare taxes. Pursuant to the applicable Law on
Tax administration, the “large scale” of household businesses is determined
when revenue and the number of employees reach the maximum criteria of
micro-enterprises (according to Law on Assistance for Small and Medium-Sized
Enterprises). These household businesses or those voluntarily declaring taxes
must fully implement accounting systems, similar to enterprises.
Household businesses
declaring taxes must issue authenticated e-invoices when trading
goods/providing services; submit VAT and PIT declarations (made using Form
01/CTKT enclosed with Appendix 01-2/BK-HDKD) monthly or quarterly. The VAT and
PIT payables shall be calculated directly on revenue (percentage rate
multiplied by revenue, similar to the household businesses paying fixed tax).
- Household businesses and
individual businesses operating on e-commerce platforms operate entirely online
without a fixed business location, capable of conducting transactions across
provinces and borders. Most of the transaction data of them is generated and
stored on the e-commerce platform system or payment intermediary; the data
stored by the business are copies or reports extracted from the platform, which
are not directly generated at the point of sale as in traditional models.
Therefore, in
principle: (i) the tax calculation method for household businesses declaring
taxes is similar to enterprises paying taxes directly: VAT = percentage
rate% x revenue; PIT (CIT for enterprises that do not account for costs) =
percentage rate% x revenue; (ii) The major difference between them and small
and medium-sized enterprises is that enterprises pay CIT on taxable income
(minus expenses) and VAT in a deduction method and implementing accounting
systems (opening accounting accounts, financial reporting, accounting books,
accounting records); while household businesses, regardless of scale, including
those have the same scale as small and medium-sized enterprises (such as
household businesses in agriculture, forestry, fisheries; industry,
construction with revenue at least 03 billion VND or service provision with
revenue at least 10 billion VND) pay PIT and VAT directly on revenue, may not
implement accounting systems (household businesses paying fixed tax) or
implement a simple accounting system, keeping simple records, without the need
to open accounting accounts and prepare financial reports.
2.2.
Policies for tax and tax administration for household businesses vs.
enterprises
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- Regarding business
registration and tax registration:
+ Household businesses
shall register at district-level Finance - Planning Departments (from July 1,
2025, household businesses may submit registration applications and receive
results at commune-level Finance - Planning Division where the household
business is located). The application includes registration application form,
personal papers of the household business owner, etc. and the processing time
is 03 days.
+ Enterprises shall
register at provincial business registration agencies, with more complex
application (including: business registration application form, internal
regulations, lists of shareholders/members, etc.). The processing time is 03
days if the application is satisfactory.
Regarding tax
registration, the inter-agency single-window system shall apply: when
registering an enterprise or a household business, the tax information shall be
transferred to the tax authority to issue a TIN concurrently. However, in
practice, there are cases of business registration without tax registration for
household businesses, due to the lack of close cooperation between the tax
authority and business registration agency in the past (before July 1, 2023,
when the integrated procedures between business registration and tax
registration have not yet implemented).
- Regarding systems
of accounting and invoices
+ Enterprises
(including micro-enterprises) must follow accounting regulations and use
e-invoices for goods trading and service provision (excluding some specific
cases).
+ Most household
businesses (paying fixed tax) are not required to keep accounting records, only
declare revenue to the tax authorities; if invoices are needed, they are issued
by tax authorities separately. Only household businesses that declare taxes are
required to use electronic invoices and maintain detailed revenue and expense records
as enterprises.
This difference results
in lower transparency in revenue and expenses for household businesses compared
to enterprises, creates difficulties to tax administration and loopholes
for household businesses to declare lower revenue to reduce tax obligations.
- Regarding tax
calculation methods: As mentioned, enterprises may apply either the
deduction method (tax calculated on income with deductible VAT) or direct
taxation on revenue. Household businesses calculate taxes based on revenue (fixed
tax payment or direct declaration), do not apply the mechanism of personal
income tax based on income after deducting costs similar to corporate income
tax, unless they conversion into enterprise model. This situation creates a
gap: enterprises may have their reasonable costs deducted, while household
businesses paying fixed tax at a fixed percentage of revenue, resulting in
lower actual tax rates but not accounting for cost factors. It is suggested to
deduct costs of household businesses when calculating personal income tax to
encourage business expansion, or reduce personal income tax rate for
large-scale household businesses<0}
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Overall, the current
legal framework differentiates household businesses and enterprises based more
on legal formality rather than the nature and scale of business, leading to an
imbalance between these entities This situation inadvertently creates an
advantage for operating as a household business compared to establishing an
enterprise, becoming a barrier that discourages household businesses from converting
to enterprises. Therefore, one of the important tasks of the Scheme is to
bridge the policy gap between household businesses and enterprises, to head
towards managing household businesses in a manner similar to enterprises in
terms of tax obligations and management practices, aligning with international
practices.
(Chart 1: Comparison of legal
regulations between household businesses and enterprises)
2.3.
International experiences in tax administration for household businesses
Many countries do not
have the specific term of “household business" as in Vietnam, but they
have a similar model known as sole proprietorship – where an individual
owns and operates the business, assumes unlimited liability, and profits are
included in taxable income of the income, including: sole proprietorships,
household businesses, and individual businesses.
Sole proprietorships in
various countries have simple registration procedures, low costs, and are
subjected to personal income tax instead of corporate income tax. Regarding
tax administration, in most countries, small-scale individual businesses are
not required to establish an enterprise and operate under a personal tax
identification number. However, when their revenue or numbers of employees
exceed a certain threshold, they must register as an enterprise or comply with
accounting and tax reporting requirements as an enterprise. Fix taxed or
simplified taxes shall apply to small-scale individual businesses to reduce
administrative burdens, provided to have a mechanism for converting to
declaration method when the scale expands.
In China, there are 02
regulated entities: sole proprietorships and household businesses (individual
household businesses and small household businesses), which are similar to Vietnam.
However, these entities have specific policies and regulations separately,
where sole proprietorships are specified in the Sole Proprietorship Enterprise
Law of the People's Republic of China, while household businesses are specified
in Article 26 of the General Principles of Civil Law. In Singapore, Malaysia,
and Thailand, sole proprietorships may be registered easily and subject to
personal income tax; In Thailand, however, if the revenue exceeds a certain
threshold, an enterprise must be established.
Some countries also
implement measures to assist household businesses in converting to enterprises.
For example, South Korea and Japan offer tax exemptions or reductions in
initial years when converting from a household business to an enterprise; China
offer licensing fee exemptions and tax reductions for newly converted entities;
Indonesia simplifies tax reporting for micro-enterprises to encourage the
enterprise registration. In addition, countries focus on developing e-tax
system to facilitate household business in declaring and paying taxes;
integrating data from multiple sources (banks, e-invoices, POS cash
registers...) to monitor revenue of household businesses and prevent tax
evasion. From international experience, procedures and tax rates must create
the most favorable conditions for household businesses, while also establishing
a pathway for large-scale household businesses to convert into enterprises when
they reach a certain scale, ensuring equality and improving management
efficiency. The proportion of household businesses in Vietnam's population,
compared to other countries, is relatively low (~2.17% of the population, while
the U.S. is ~6.9%, Thailand ~5.6%, the U.K. ~8.5%, etc.).
Therefore, there is
still room for developing the sole proprietorship sector and converting to
enterprises, provided that there are appropriate policies to encourage
entrepreneurial spirit and business expansion.
(Chart 2: International
experiences in tax administration for household businesses)
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3.1.
Achievements
In recent years,
particularly from 2023, tax administration for household businesses has made
significant progress. The scale of the household business sector continues
to grow: by the end of 2024, there were approximately 3,6 million household/individual
businesses (an increase of 106% compared to 2023). The number of active
household businesses (applying either fixed tax or tax declaration method)
is around 2,2
million household businesses, a 4% increase from 2023. The number of
households with revenue above the taxable threshold (over 100 million VND/year)
is 1,3 million household businesses, accounting for 59% of the total
household businesses. Therefore, more and more households are reaching the tax
threshold and have their business activities expanded.
State budget revenue
from the household business and individual businesses is showing positive
growth: 25.953 trillion VND in 2024, a 20% increase from 2023. In the first 6
months of 2025, the total revenue from household/individual businesses reached
17.1 trillion VND, equivalent to 131% compared to the same period in 2024. The
achievement rate of budget revenue from household businesses in the first half
of 2025 reached 53.4%, indicating that the revenue may exceed the annual
estimate . These results were achieved due to the comprehensive implementation
of management solutions and assistance provision for household businesses by
the Tax Department, facilitating and improving the voluntary compliance of
taxpayers.
(Chart 3: State Budget revenue
results for household businesses for the years 2023-2024, and the first 6
months of 2025)
Some effective
implementation solutions and remarkable results achieved:
- Unified, resolute,
and coordinated implementation of various solutions in directing and managing
work: (i)
Formulate a scheme and implementing uniformity across departments: The Tax
Department (formerly General Department of Taxation) has developed and issued
the "Renovation, improvement of tax administration quality for household
businesses" since February 2025 (Project 420), which serves as the
foundation for operational procedures with a set of solutions implemented effectively
and consistently across the tax industry; (ii) Issue guiding documents: research
and assist the Ministry of Finance to issue documents in cooperating in
management of household businesses, prevent tax losses (in cooperation with the
Ministry of Public Security and People's Committees of provinces); the Tax
Department has developed and issued several guiding documents based on
practical business requirements arising from the implementation of Project 420;
(iii) Monthly/quarterly assess the effectiveness of tax administration for
household businesses based on criteria according to each solution of Project
420 of each entity and compare it to the average results (according to each
provincial tax authority/grassroots-level tax authority) and organize thematic
conferences and review meetings (in the initial phase, for weekly results
review) to address challenges and accelerate progress, while identify innovative solutions or
best practices from units for dissemination.
- Intensification of
intersectoral cooperation: Tax authorities at all levels have cooperated with local
authorities and relevant agencies in managing household businesses. At the
beginning of 2025, the Ministry of Finance shall send an official dispatch to
Provincial CPV Secretary and People's Committees of provinces, and an official
dispatch to the Ministry of Public Security on cooperating in tax
administration for household businesses and preventing tax losses. The Tax
Department shall cooperate with various units (Business Registration
Department, Private Enterprise Development Department, and Statistics Department);
organize workshops and cooperate with Accounting Associations, Tax Consultancy
Associations, Small and Medium Enterprises Associations, etc. to share data,
experiences and provide assistance for household businesses in implementing tax
laws and digital transformation. Achievements: the Tax Department has reviewed
and standardized personal TINs, converted TINs into PINs for household
businesses; simultaneously, cooperated in preventing deficiencies, managing
input invoices, controlling cash flow, etc. thereby expanding tax
administration for household businesses. In the first 6 months of 2025, 254.111
household businesses have been placed under the management (additional tax
registration) and 197.349 household businesses have been imposed fines of over 1.783
trillion VND. This is the result of concentrated efforts on tax loss prevention
for household businesses throughout the taxation.
- Acceleration of
digital transformation in managing household businesses: The Tax Department has
implemented digital applications to serve household businesses. By June 2025,
the e-tax declaration rate for household businesses is over 98% (for household
businesses paying taxes through declaration). The Tax Department has developed
and provided free electronic tax services on the e-portal and the Etax Mobile
application, facilitating household businesses to submit tax declarations and
pay taxes be electronic means anytime and anywhere. In particular, the
implementation of e-invoices generated from cash registers stipulated in Decree
No. 70/2025/ND-CP dated March 20, 2025 of the Government has been rapidly
promoted: by June 30, 2025, 110.295 household businesses have registered to
use invoices generated from cash registers, including over 20.000 household
businesses paying fixed tax whose revenue below 1 billion VND voluntarily
participating. This result exceeds expectations, indicating that household
businesses are undergoing positive transformations, ready to apply digital
technology with appropriate guidance and assistance. Tax authorities at all
levels have established working teams to directly visit each business area of
household businesses to provide guidelines on electronic invoicing systems and
address issues on the spot. Propaganda activities through media channels has
also been strengthened: hundreds of articles have been published on the Tax
Department’s website and in the press on the topics of abolishing fixed tax,
implementing electronic invoicing; many online symposiums, exchanges on VTV,
online newspapers have taken place to answer questions of household businesses.
As a result, public opinion is gradually aligning with the modernization of
household business management, eliminating misunderstandings that new tax
policies lead to the shutdown of some household businesses.
- Resource
concentration to maximize assistance for household businesses: Besides propaganda, the
Tax Department has implemented practical measures for providing assistance for
household businesses. Training courses on tax policies, guidance on simple
accounting systems for household businesses have been organized with the
participation of Tax Consultancy Associations, tax agents, and software
solution providers to raise the awareness and compliance of household
businesses. Furthermore, the Tax Department has cooperated with professional
organizations (Accounting Associations, Audit Associations, consulting
enterprises, etc.) to develop low-cost accounting-tax service packages for
household businesses and newly converted enterprises, optimizing costs and
supporting them in the initial phase of digital transformation.
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Additionally, the tax
authorities have timely proposed tax exemption, reduction, and extension
policies to provide assistance for individuals and enterprises in overcoming
difficulties caused by the pandemic and recovering business, with a total of
approximately 96.749 trillion VND in tax extensions, exemptions, and
reductions in the first 6 months of 2025.
In the first 6 months
of the year, 13.699 household businesses paying fixed tax have converted to
tax declaration, and 1.474 household businesses converted to enterprises (in
June 2025, 910 household businesses converted to enterprises). This is
an encouraging result, indicating that household businesses are gradually
adapting to new management methods and boldly changing models when realizing
long-term benefits.
3.2.
Limitations, difficulties, and causes:
3.2.1. Limitations,
difficulties
In addition to the
mentioned results, the tax administration for household businesses still faces
many existing difficulties and challenges that need to be overcome:
- Regarding tax
administration for household businesses: There is still a difference in tax
policies between household businesses and enterprises: Although revenue and
scale may be equivalent, between the household business (paying fixed tax, not
subject to other administrative obligations) and the enterprise (subject to
higher tax rates if profitable, numerous other obligations), many household
business owners prefer to maintain the household business model. Compliance
costs as enterprises (accounting, insurance, reporting, etc.) are considered
high, while the benefits of conversion are not attractive enough. There
are not many incentives for household businesses converting to enterprises,
lacking motivation. Therefore, the number of household businesses converting to
enterprises annually is very low compared to the total number of operating
household businesses (in the first 6 months of 2025, only ~1,474 household
businesses converted to enterprises out of over 3,6 million household
businesses) there are psychological barriers and interests that maintain the
underground, informal economy in the form of household businesses instead of
formalizing it.
- Regarding the failure
to manage revenue of household businesses paying fixed tax: The fix tax method
primarily relies on the voluntary declaration of household businesses, making
it difficult to prevent underreporting of revenue to reduce taxes. The failure
to apply invoices and books for household businesses causes the lack of
reliable information to verify actual revenue. Although there are efforts to
prevent revenue loss by cooperating with local authorities to review the number
of household businesses, compare data on electricity, water, revenue through
banks, etc., but determining “sufficient” revenue of each household business is
still very difficult due to limited human resources (some tax authorities at
grassroots level manage thousands of households). The "discrepancy in
data" between the business registration agency and the tax authority
regarding the number of household businesses also indicates that many
businesses have not registered for taxes or have not been placed under tax
management. This loophole leads to tax losses and creates inequality and
unfairness among household businesses.
- Insufficient
technology infrastructure and failure to meet the management requirements in
household business management: Although many applications have been
implemented such as eTax, electronic invoicing, digital maps of household
businesses, etc., the database on household businesses is still decentralized
and incomplete. There has not been the establishment of a centralized data
system connecting tax authorities with ministries, departments (police offices,
banks, industry and trade agencies, science and technology agencies, etc.) to
integrate information on household business activities. There is a demand for
integrating e-invoice data from household businesses to automatically calculate
taxes, prepare accounting records to immediately provide assistance for
household businesses converting to declaration method. The capacity for risk
analysis and compliance management for household businesses is also limited due
to the lack of specialized criteria and large data analysis tools. These issues
require investment in improving information technology (IT) infrastructure and
suitable tax administration application systems for the new management.
- Dissemination for
household businesses is
not diverse and flexible. The dissemination has only reached the level of
"explaining the law", without accompanying practical guidance on tax
declaration, electronic tax submission, etc. The content of dissemination is
still “one-way", not addressing the practical concerns of household
businesses. Additionally, many household businesses are limited in management
knowledge, do not actively access information and regulations, leading to
misunderstandings, errors, or confusion when fulfilling tax obligations.
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- Cooperation with
local authorities has
improved but is not consistently effective: there are still places where local
authorities fail to mobilize household businesses to declare or cover up
household businesses in the area. Reporting mechanism and information exchange
mechanism between relevant parties are not truly smooth (such as reporting new
registrations/suspensions of household businesses from commune/ward to the tax
authority).
These limitations
must be addressed promptly to ensure smooth and consistent organizational
operations when new policies come into force.
3.2.2. Causes of
limitations:
The causes are from
both policy and enforcement aspects:
- Inconsistent and
incomplete legal framework: Some legal provisions still
"discriminate" between types of businesses, not based on the nature
and scale of business, thus not creating a level playing field (e.g., the
requirement that any household business that employs at least 10 employees must
convert into an enterprise has been in place for 18 years but is ineffective
due to lack of strong enforcement measures). Policies for incentives for the
conversion of household businesses are few and scattered, not aligned with
actual needs. Moreover, the penalties imposed on failure for business
registration or tax payment (fines of 2-3 million VND/violator) are not strict
and lack of deterrent effect. The cooperation between relevant agencies is not
close, lacks consistency, and is case-driven, leading to many household
businesses exploiting loopholes by registering in one location and doing
business in another to evade taxes.
- Shortcomings of the
applicable management mechanisms: The fixed tax regime is convenient but also
limits the development in order to pay fewer taxes; whereas converting to
enterprises requires more complex tax declarations, subject to higher taxes on
profits. The tax declaration and settlement procedures for enterprises (such as
preparing financial statements) are much more complex compared to those
applying for fixed tax.
- Enforcement
resources, technological infrastructure: As mentioned above, limitations in
resources, technology, and management experience of household businesses
declaring taxes are internal challenges. If the conversion into a new
management model is not adequately prepared, along with redesign of procedures
and appropriate training for cadres, it may affect the effectiveness of
implementation.
- Compliance with tax
laws: Many
household businesses are still hesitant, lacking management knowledge, fearing
complex procedures, and worrying about inspections and audits if they convert
into enterprises. Some household businesses operate under a small-scale, with
low profits, and lack the motivation to expand. Some household businesses fail
to comply with tax laws: where there are still cases of law evasion and
incomplete declaration.
In summary, based on
the outlined tax management issues for household businesses, there is an urgent
need for strong policy and management method reforms, combined with
comprehensive solutions from legal improvements and technology process upgrades
to dissemination, assistance, and implementation. These analyzed causes serve
as the basis for developing solution groups in the next part of the Scheme.
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Based on the directions
of the Resolutions of the Central CPV, National Assembly, and Government on
private economic development and the Action Plan issued with Decision No.
2260/QD-BTC dated June 30, 2025 of the Ministry of Finance, the Scheme aims to
research and propose specific indicators and 06 solution groups. Each
solution group includes: specific tasks, outcomes/products, implementation
roadmap, and responsibilities to ensure feasibility and consistency.
Some specific
indicators:
- By October 30, 2025: Law
on tax administration (replacement) (expected to be submitted to the National
Assembly at the 10th session of the National Assembly in October 2025) and guiding
documents for implementing the fixed tax abolishment for household businesses
shall be reviewed and amended uniformly.
- By October 30, 2025:
Law on amendments to Law on Personal Income Tax (expected to be submitted to
the National Assembly at the 10th session of the National Assembly in October
2025) shall be issued.
- By January 01, 2026:
Law on Fees and charges and guiding documents for implementation shall be
reviewed and amended.
- In 2026” Law on
Assistance for Small and Medium-Sized Enterprises and guiding documents for
implementation shall be reviewed and amended.
- In 2026: Law on
Individual Businesses shall be researched and proposed to formulate.
- In 2026: Circular No.
88/2021/TT-BTC dated October 11, 2021 guiding the accounting regime for
household businesses and individual businesses shall be reviewed and amended.
- From 2026 and according
to the tax policy amendment roadmap: Circular No. 132/2018/TT-BTC guiding the
accounting regime for micro-enterprises; Circular 133/2016/TT-BTC guiding the
accounting regime for small and medium-sized enterprises shall be reviewed and
amended.
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- Before September 30,
2025: Legal propaganda programs and materials shall be prepared and implemented
to ensure that 100% of household businesses and individual businesses have
access to information (through media and tax authority support teams) about the conversion
from fixed tax to declaration method, and converting from household businesses
to enterprises.
- Before September 30,
2025: Completion of data collection and database entry into the application
developing a business household database for household businesses and
individual businesses.
- Before September 30,
2025 (and after September 2025): Household businesses and individual businesses
subject to using e-invoices generating from cash registers according to Decree
No. 70/2025/ND-CP shall be reviewed and supplemented, ensuring 100% of the
entities subject to implementation must register and use.
- Before September 30,
2025: 100% of household businesses and individual businesses paying fixed taxes
have their payable paid; those paying taxes by declaration method shall install
and use EtaxMobile; for those in the extremely disadvantaged areas as
stipulated, striving to achieve 80%;
- Before October 30,
2025: Complete the formulation of Criteria Set and Risk Management Analysis
Application in tax administration and invoice management for household
businesses and individual businesses.
- Before November 30,
2025: Complete the tax administration process for household businesses and
individual businesses in line with the overall requirements of redesigning the
tax administration process; prepare inspection content guidelines for household
businesses and individual businesses.
- Before November 30,
2025: Complete the modification and supplementation of tax declaration forms
(tax declaration, tax exemption, tax reduction, schedules, etc.) for household
businesses and individual businesses according to the Law on Tax Administration
(replacement).
- After October 2025
and to 2026: Continue
to implement diverse and appropriate assistance measures for different groups
of taxpayers.
4.1.
Advisory and directive role of the Ministry of Finance
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b. Specific tasks:
- Regarding the
improvement of tax policies and laws:
+ Advise the Government
to report to the National Assembly for amending and supplementing the Law on
Tax Administration, Law on Personal Income Tax to concretize the principles in
the CPV’s Resolutions on legal mindset innovation, business environment reform,
transparency improvement, and creation of a favorable and transparent business
environment for citizens and enterprises, especially Resolution No. 57-NQ/TW
dated December 22, 2024 on breakthroughs in the development of science,
technology, innovation, and national digital transformation; Resolution No.
66-NQ/TW dated April 30, 2025 regarding innovating law-making and law
enforcement in response to the Vietnam’s development demands in the new eral;
Resolution No. 68-NQ/TW dated May 04, 2025 regarding private sector development.
Promote devolution, delegation, and digital transformation in tax
administration, abolish fixed tax, encourage household businesses to convert
into enterprises; promote voluntary compliance and administrative procedure
reform, reduce compliance costs, intensify risk management, and improve tax
administration efficiency to serve taxpayers.
+ Review and amend Law
on fees and charges, Law on assistance for enterprises; propose to formulate a
Law on individual businesses to elaborate the regulations set forth in
Resolution No. 68-NQ/TW dated May 04, 2025 on the development of the private
economy.
+ Advise the Government
to issue decrees and proactively implement issuance of circulars under its
jurisdiction to implement the Law on Tax Administration after being approved by
the National Assembly. Direct tax authorities to focus on disseminating
policies on managing household businesses and individual businesses as
alternatives to fixed tax policies and provide guidelines for taxpayers to
familiarize themselves with the new tax declaration and management methods for
smooth implementation from January 01, 2026 according to Resolution No.
68-NQ/TW and Resolution No. 198/2025/QH15.
+ Amend and supplement
Circular No. 88/2021/TT-BTC dated October 11, 2021 on guidance on accounting
for household businesses and individual businesses; Circular No.
132/2018/TT-BTC on guidance on accounting for micro-enterprises; Circular No.
133/2016/TT-BTC on guidance on accounting for small and medium-sized
enterprises.
- Implement digital
transformation, promote database integration to serve tax administration:
+ Develop and improve a
unified database system among units affiliated to the Ministry of Finance and
units under other ministries and departments: Police, Banks, Industry and
Trade, etc., towards maximum data interoperability and intensify tax
administration efficiency, transparency, and fairness in fulfilling tax
obligations.
Direct tax authorities
at all levels to synchronize information with the National Population Database;
cooperate with relevant agencies to standardize taxpayer identification information,
develop databases for household businesses, improve tax administration
solutions in the direction of risk management and compliance management.
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4.2.
Review and improve the legal framework for tax policies for household
businesses
a. Goals: Complete the legal
framework to abolish fixed tax method for household businesses, create a
transparent legal basis for converting all household businesses paying fixed
tax into declaring taxes while minimizing the tax obligation gap between
household businesses and enterprises, ensure tax fairness in business. Legal
policies must be urgently amended in 2025 to timely submit to competent
authorities for issuance, which shall come into force from January 01, 2026,
including amendments to relevant tax laws and guiding documents
b. Specific tasks:
- Amend Law on Tax
Administration and guiding documents:
- Focus on
supplementing and amending provisions in the Law on Tax Administration No.
38/2019/QH14 on fixed tax abolishment for household businesses; simultaneously,
amend regulations on invoices and records for household businesses towards
compulsory use of e-invoices for all revenue-generating cases, replacing retail
invoices previously used. Small value invoices or retail invoices or fee/charge
collection, etc., shall be legalized with appropriate solutions to facilitate
and save costs for taxpayers. Additionally, decrees and circulars shall be
reviewed for consistent amendments, ensuring the synchronized implementation
and results.
- Supplement provisions
to specify: Regulated entities of tax administration which are
household/individual businesses registered for business (subject to business
registration according to the Law on Enterprise).
- Study and propose
a new tax administration model for household businesses: research and
propose a tax administration model after abolishing fixed tax. Where:
(i) Classify by revenue size to determine tax calculation method scale to determine
suitable tax calculation/tax administration methods, determine revenue
thresholds for applying e-invoices generated from cash registers; and (ii)
Specify roles and functions of departments within the tax authority in managing
household businesses (tax registration, declaration, accounting, refund,
exemption, inspections, and enforcement, etc.), avoiding gaps or overlapping
tasks when changing management methods. The new model may consider establishing
specialized teams for managing household businesses declaring taxes at tax
authorities at grassroots level, separate from the previously fixed tax
administration departments, or converting to an administration team model
serving household/individual businesses declaring taxes. International
experience should be studied; household businesses may be classified by revenue
scale to apply appropriate management models (e.g., micro-household businesses
may declare taxes in a simplified manner; while large-scale household
businesses are managed as enterprises). This solution must be completed in
2025, serving as the basis for formulating new tax administration procedures.
The classification must
be based on revenue scale to determine suitable tax calculation/administration
methods: according to data for the first 7 months of 2025,
household/individual businesses apply the following revenue thresholds:
+ Stable household
businesses whose revenue is ≤ 200 million VND: about 1,5 million household
businesses accounting for 65.7% of the total 2,35 million stable household
businesses, with a tax obligation of 2.410 billion VND.
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+ Stable household
businesses whose revenue is from 3 million VND to 50 billion VND: about 12
million household businesses accounting for 0,6% of the total 2,35 million
stable household businesses, with a tax obligation of 1.032 billion VND.
+ Stable household
businesses whose revenue is ≥ 50 billion VND: about 1.464 million household
businesses accounting for 0,1% of the total 2,35 million stable household
businesses, with a tax obligation of 288 billion VND.
Based on the current
situation regarding the above figures, the Tax Department shall propose a tax
administration model for household businesses based on revenue thresholds and
tax rates of each type of taxes as outlined in Schedule 2 enclosed with this
Scheme.
Schedule 2: Tax administration
models for household businesses and individual businesses based on revenue
thresholds when abolishing fixed tax)
- Amend individual
income tax (PIT) and value-added tax (VAT) policies: (i) Review Law on PIT,
Law on VAT, and guiding documents, guidelines to adjust the non-taxable
revenue threshold to align with practicality; (ii) consider raising the
threshold to reduce the number of household businesses subject to taxes, focus
on large-scale household businesses. Research and propose amendments to PIT
calculation method for "large-scale" household businesses whose scale
is equivalent to a small and medium-sized enterprise similar to CIT calculation
method; (iii) consider applying PIT on income (revenue minus expenses) for
household businesses with complete accounting records to encourage transparent
cost reporting and business expansion investment without any tax disadvantages
compared to those
applying to enterprises; and (iv) suggest supplements to provisions for tax
exemptions/reductions to encourage innovation (e.g., tax exemption for income
from share transfers, capital contributions to innovative startups; tax
incentives for experts and scientists in startups) to promote private economic
development in accordance with Resolution No. 68-NQ/TW.
- Amend accounting
regime: Research and amend accounting regime for micro-enterprises and
household businesses to be easy to implement without requiring additional
accounting personnel. To be specific: + Research and supplement Circular
No. 88/2021/TT-BTC dated October 11, 2021 on guidance on accounting for
household businesses and individual businesses; Circular No. 132/2018/TT-BTC on
guidance on accounting for micro-enterprises; Circular No. 133/2016/TT-BTC on
guidance on accounting for small and medium-sized enterprises. The goal is to not
incur additional specialized accounting personnel, allow micro-enterprises converting
from household businesses to self-record accounting books on supporting
application platforms.
- Develop
and provide free digital platforms and accounting software for shared use by
household businesses and micro-enterprises: cooperate with software solution
providers to develop a simple accounting solution package, covered by the state
budget for household businesses to encourage participation.
- Strengthen
administrative tax procedure reforms for household businesses: Complete
policies; review relevant administrative procedures for household businesses to
reduce at least 30% of the processing time for administrative procedures, at
least 30% compliance costs, and continue to reduce in the following years in
accordance with Resolution No. 68-NQ/TW. For household businesses,
administrative procedures that are given priority for reform include: initial
tax registration, business suspension, tax declaration, e-tax payment, invoice
usage, tax exemption/reduction, etc. Forms and declarations shall be shortened,
unnecessary information shall be removed, and e-tax declaration shall be
integrated for preparation and submission on computers/phones instead of
submission of physical documents. For example, tax declaration form No. 01/CNKD
and Appendix 01-2/BK-HDKD shall be modified after abolishing fixed tax, developing
a smart electronic declaration form with pre-filled revenue data from the
invoice system.
(Detailed work
framework, assignment, output results, and implementation roadmap according to
Chart 1.1. Review and improvement for legal tax policies for household
businesses enclosed with the Scheme)
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a. Goals: Formulate and implement
a new tax administration for household businesses based on actual revenue
declaration, replacing the fixed tax method. Ensure a smooth conversion
process, correct and sufficient tax collection. At the same time,
implement technical and operational measures to provide assistance for
household businesses in compliance with the new method, avoid suddenly
increasing administrative burdens.
b. Specific tasks:
- Develop a tax
administration process for household businesses based on the declaration
method: Based on the proposed management model (section 4.2),
operational procedures shall be researched and developed to internally
apply in the tax authority for managing household businesses after converting
to the declaration method. This process includes tax registration, periodic tax
declaration document reception of household businesses, tax accounting
monitoring, tax declaration verification, debt management, and enforcement (if
any). The principle of process formulation is to ensure compliance with the
overall redesign of the Tax Department's processes, while taking into
account the characteristics of household businesses (large quantity, small revenue).
The new management process for household businesses shall be simpler than the
typical management process for enterprises: for example, shorten the step of
approving tax declarations (due to risk management application), integrate the
step of assistance provision into management, and apply e-document management. The
process also specify the responsibilities of each department: Household
business support team, Division of Personal income tax and other revenue shall
bear primary responsibilities and cooperate with information technology,
operational - budgeting - legal, administrative - synthesis, inspection
departments, etc.
- Research specific
tax administration solutions for each group of individual/household businesses
engaging in e-commerce on e-commerce platforms that incur a large number of
transactions, low order values, and high return, cancellation and exchange
rates. Invoices for e-commerce shall not be issued manually at the time of sale
and shall be linked to the order status in the system; at the same time,
frequent adjustments or replacements of invoices are necessary to accurately determine actual
revenue. The application of the traditional management method for household
businesses may result in an overload of both taxpayers and tax authorities,
increasing errors, and reducing management efficiency. Therefore, It is
necessary to provide a separate tax administration for e-commerce groups,
including: direct data collection from the platform, reconciliation with
payment data from intermediaries and banks, cross-referencing with e-invoices
to automatically prepare tax declarations for taxpayers.
-
Expand the tax base, ensure correct and sufficient tax collection: implement
measures to prevent tax losses and ensure a close management for household
business revenues after converting to apply the declaration method. Research
and implement management solutions including: intensify inspections and
monitoring of sales invoices of household businesses; compare declared
household business revenues with e-invoice data of household businesses,
reconcile cash flows with key household businesses to detect underreporting;
launch incentive programs to encourage receipt collection and invoice issuance
(such as "Lucky Invoice" with prizes). Additionally, cooperate with
local authorities to review and prevent unregistered and undeclared
household businesses.
{0>
<}0{>
In
2025, continue to review markets, shopping centers, household businesses
engaging in e-commerce, etc. for further management (increase the number of
registered household businesses by at least 10% compared to 2024). These
tasks have been implemented under the Scheme “Innovation to improve the quality
of tax administration for household businesses” issued with Decision No.
420/QD-TCT dated February 28, 2025 of the General Department of Taxation and
have shown positive results in improving the management for household
businesses and increasing state budget revenue from individual/household
businesses in the first 6 months of 2025. Particularly, in collaboration with
the effective implementation of Project of using e-invoices generated from cash
registers: assist provincial People's Committees to provide financial
assistance for household businesses to purchase cash registers and invoice
printers; diversify customer incentives for invoice collection (increase the
quantity and value of rewards compared to the current "Lucky Invoice"
program). The goal is to make a significant transformation in the compliance of
household businesses: every transaction of sales and service provision must be
issued with invoiced, eliminate “under-the-table” revenue outside the
books. Then, the tax declaration of household businesses shall specify actual
revenue, ensure correct and sufficient tax collection.
- Amend and supplement
forms and charts, formulate operational training materials: To provide assistance
for the implementation of the new method, some forms, charts, and
operational training materials must be developed. To be specific: (i)
Forms, declarations, lists for household business declaration (as mentioned,
amend form No. 01/CNKD towards electronic transformation). (ii) Forms,
declarations for tax exemption/reduction (if there are tax
exemption/reduction policies for household businesses converting to enterprises
or household businesses in disadvantaged areas, etc.) (iii) Simple
accounting regime guidance for household businesses: develop a handbook for
household businesses to record basic revenue and expenses serving tax
declaration, according to amended circulars on accounting; (iv) Operational
training materials for tax officials on managing household businesses
declaring taxes: compile processes, operational scenarios, inspection
guidelines, cross-referencing household business revenue.
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All the above solutions
aim for the ultimate goal: by January 1, 2026, fixed tax shall be abolished and
all household businesses shall conduct self-declaration and self-payment of
taxes based on actual revenue. Tax authorities shall play a guiding,
supervisory, post-inspection role instead of determining tax obligations
upfront as with the fixed tax method. This is a modern, transparent tax
administration method, in line with international trends and suitable for the
digital economy and digital transformation environment.
(Detailed work framework,
assignment, output results, and implementation roadmap according to Chart 1.2.
Improvement for tax administration methods enclosed with the Scheme)
4.4.
Intensifying application of digital technology, e-invoices, development of
shared digital platforms
a. Goals: Promote digital
transformation in tax administration for household businesses, consider it
as a spearhead to improve efficiency and reduce compliance costs. Implement
thoroughly electronic invoicing in household business community; develop application
systems and databases on individual/household businesses and shared tools for
household businesses, provide assistance in tax declaration and payment; at the
same time, provide assistance for authorities in automate tax calculation and
risk monitoring.
b. Specific tasks:
- Initially, develop a
database on individual/household businesses, including: business registration
status, tax registration (registered/unregistered, suspended, business address
changes), business lines, business items, application of fixed tax/declaration
method, expenses (rent, personnel, electricity, water, other expenses),
break-even revenue, input invoice revenue, expected revenue to serve as a basis
for risk management regarding revenue, invoices when abolishing fixed tax and converting
household businesses to self-declaration and tax payment. The database
development shall be conducted by tax authorities under Scheme 420, by the end
of June 2025, a national database of 1,8 million household businesses has been
established, accounting for 81% of the total 2,2 million household businesses.
- Intensify data
connection between tax authorities and banks, payment intermediaries,
e-commerce platforms, electricity/water/telecommunication suppliers, etc. to
reconcile and monitor the actual revenue of household businesses.
- Improve the criteria
set of risk management for household businesses, including indicators on
revenue, industries, locations, compliance history, invoice usage, etc. Establish
an early warning system for household businesses showing risk signs of
household businesses (lower declared revenue compared to expected revenue,
abnormal revenue fluctuations, sudden tax increase/decrease, issuing many
high-value invoices then suspending business operations, etc.) IT system is
required to integrate external data sources (banks, business registration
agencies, population databases under Scheme 06) to closely monitor household
business activities after abolishing fixed tax. Data connection and
information sharing solutions with relevant parties (police offices, market
surveillance agencies, banks, etc.) shall be implemented in the 2025-2026
period. Concurrently, upgrade the “Household business digital directory” into
E-directory of household businesses, updating information on all declared
household businesses (replacing the previous data of household businesses
paying fixed tax only) This directory shall be a centralized database serving
analysis, cross-referencing, decision-making, interconnectivity with functional
agencies, creation of foundation for modern management, revenue loss
prevention.
- Popularize
electronic tax services and tools for household businesses: Tax Department
has been providing free electronic tax services on its website and mobile
application (Etax Mobile) for taxpayers. The task ahead is to improve and add
features to ensure electronic tax declaration and tax payment by 100% of
household businesses. Therefore, an evaluation of current functions shall
be conducted to provide guidelines for household businesses (e.g., video
tutorials on the application); taxes to be paid through electronic channels
(internet banking, mobile money, etc.) <0} Additionally, develop tax declaration support
tools: for example, integrate tax declaration features via smart phones
for small-scale household businesses with limited access to computers, or apply
AI technology to automatically prepare tax declarations based on invoice
history, etc. Diversifying tools shall ensure that household businesses, regardless
of technological proficiency, may have suitable solutions to fulfill tax
obligations. Such task is handled and has its main items completed in 2025
(e-tax declaration portal for household businesses) and updated in 2026 by the Digital
Transformation Subcommittee.
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- Develop and
provide low-cost or free accounting software, expense declaration software The
government will provide free integrated digital solutions for small and
micro-enterprises, household businesses and individual businesses, including
accounting software with features ensuring integration with electronic invoice
software and digital signature services in accordance with Clause 3, Article 12
of Resolution No. 198/2025/QH15.
- Upgrade IT systems
to comply with new regulations: Amendments to laws and policies and promulgation
of new procedures shall result in updating and improving corresponding information
technology applications. To be specific: upgrade tax registration and TIN
management systems to handle a large volume of converting household businesses;
upgrade electronic tax declaration, tax payment applications to align with new
forms; upgrade electronic invoice management systems according to Decree No.
70/2025/ND-CP (on e-invoices generated from cash registers); add functions for
managing household business accounting records (if needed to monitor expense
data for household businesses declaring taxes based on accounting records). <0} During implementation,
establish a technical support hotline for household businesses and tax
officials to apply new systems and promptly address any issues. It is expected
that a significant volume of IT work needs to be done, but this is a
prerequisite for a successful conversion of management methods, as effective
management of millions of household businesses for tax declaration is
impossible without IT support. Digital technology application solutions shall
create a "soft infrastructure" for tax administration in the new era:
where all household businesses use electronic invoices, declare and pay
taxes electronically; all data is digitized and analyzed. The result is a
reduction in manual intervention, increased transparency, and compliance
of taxpayers.
(Detailed work
framework, assignment, output results, and implementation roadmap according to
Schedule 1.3. Application of digital technology, electronic invoicing, and
development of shared digital platforms enclosed with the Schedule)
4.5.
Assistance and encourage provision for household businesses to convert into a
suitable model.
a. Goals: Ensure that household
businesses receive assistance in conversion from fixed tax method to tax
declaration method, as well as when converting from household businesses to
enterprises. Create incentives for household businesses to voluntarily change
their model towards transparency, formality, by minimizing costs and efforts
for them and increasing benefits during the conversion.
b. Specific tasks:
- Focus on providing
assistance for household businesses during the tax method conversion phase: In
2025 and throughout 2026, tax authorities shall mobilize resources to provide
direct assistance at the grassroots level for taxpayers. Establish support
teams for household businesses conversion in each provincial tax authority or
each commune/ward which is key business commune/ward. Each team consists of tax
officials who are knowledgeable
in policies and IT skills to directly provide guidelines for household
businesses: provide guidelines for first-time tax declaration, installing and
using invoice and accounting software, addressing any issues on the spot; set
up support areas in markets and commercial streets to reach more household
businesses. Additionally, develop suitable programs to provide assistance
for each group of household businesses: for example, programs to provide
assistance for household businesses operating in F&B sector in invoice
issuance and revenue record; programs to provide assistance in preparing
revenue-expense reports for large-scale household businesses; programs to
provide assistance in applying invoices for household businesses in
rural/mountainous areas; programs to provide assistance for e-commerce
household/individual businesses, etc. These programs may take the form of short
thematic training courses, instructional videos, illustrated brochures, etc. Online
assistance provision shall also be intensified: organize training courses
via Zoom, Google Meet, or livestream on social media channels (Facebook, Zalo);
implement a 24/7 hotline and chatbot; establish an online community on social
media to promptly address situations in practices; cooperate with e-commerce
platforms to integrate a “tax assistant” on the sales account, assist sellers
receive guidance, tax obligation notifications and provide direct assistance. The
goal is to ensure that household businesses receive immediate responses
(following the "customer care" model of enterprises). The plan is
that each converting household business may access to at least one form of
assistance (direct or indirect), ensuring that all household businesses
receive attention and assistance, cooperate with confidence in voluntarily
complying with the new policies.
- Diversify channels
and content for propaganda and guidance for household businesses: Communication
work shall play a key role in changing perception of household
businesses. Continue to implement in-depth propaganda programs on
benefits and obligations of household businesses converting to enterprises or
declaring taxes. The content focuses on: Enterprise’s benefits (access to
capital, market expansion, brand development, etc.); transparent and fair tax
policies; penalties for tax evasion and unregistered businesses, etc. Messages
shall be conveyed through various forms: printed tax guidance materials (handbook
“What to know when a household business converts from fixed tax to declaration
method”), infographics, short and easy-to-understand videos, online
consultations via livestream, local television and radio broadcasting programs;
specialized pages on social media. Periodically broadcast the program
“Accompanying small-scale enterprises, micro-enterprises, and household businesses
in taxation”. Additionally, focus on propaganda about e-invoices generated
from cash registers: assist household businesses in understanding the
usefulness of e-invoices generated from cash registers (reducing reporting
time, avoiding buying and selling forged invoices).
Research and apply
advanced technologies (AI, Chatbot, etc.) to improve the quality of system
support, applications, and respond to support requests promptly and modernly.
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- Encourage
household businesses to convert into enterprises: Accelerately implement
assistance solutions for household businesses convert from household
businesses into enterprises in accordance with Resolution No. 198/2025/QH15 of
the National Assembly of Vietnam on certain mechanisms and policies for the
special development of the private economy, in addition to providing assistance
for declaration method, the long-term goal is to encourage potential household
businesses to convert into enterprises. Tax authorities shall disseminate
information to each eligible household business, advise them to meet criteria
for business registration for incentives such as CIT exemption for 02
consecutive years from the date of generating taxable income. Cooperate to establish
a single-window sector to provide assistance for household businesses
converting into enterprises, for example: handling of business registration
and TIN applications, free first-time issuance of registration certificate,
free advice provision on procedures for seals, bank account opening, and
invoice registration. Propose provincial People's Committees to develop
programs to provide assistance in credit/operational areas for household
businesses converting into enterprises (such as preferential interest rates,
stall arrangements in markets/commercial areas). Tax authorities shall lead or
cooperate in organizing honoring events: for example, publish and honor
lists of exemplary household businesses that have converted into enterprises
and made contributions to the state budget to motivate and create a ripple
effect in the community. In addition, continue to collect feedback from
household businesses that have converted into enterprises to improve policies: their
feedback on challenges after converting into enterprises (in accounting,
personnel, etc.) shall be consolidated to propose further solutions during the
operation of new enterprises, not just at the time of transition. The ultimate
goal is to create a favorable environment for household businesses to convert
into enterprises voluntarily, contribute to the economy, and do not creating
pressure regarding procedures or tax obligations.
- Provide assistance
in legal compliance and improvement of capacity for household businesses: In
addition to providing assistance in tax, household businesses shall also
receive assistance in improving business administration and capacity for
sustainable development. Although it is not a direct responsibility of the Tax
Department, it may be integrated into a general assistance program for
small-scale enterprises and household businesses, including business
administration training courses (including accounting, tax, personnel
administration) for small businesses, micro-enterprises, household businesses,
and individual businesses that have 100% expenses covered by the state budget
according to Resolution No. 198/2025/QH15. The organization of training courses and
assistance procedures shall comply with Government's Decree No.
80/2021/ND-CP dated August 26, 2021 on elaboration of some articles of the Law
on Provision of Assistance for Small and Medium Enterprises and guiding
documents.
Detailed work
framework, assignment, output results, and implementation roadmap according to
Schedule 1.4. Risk management, compliance management for taxpayers, Schedule
1.5. Propaganda and assistance for taxpayers enclosed with the Scheme).
4.6.
Improvement of organizational capacity and enforcement of tax authorities and
intensification of cooperation with local governments
a. Goals: Ensure that the
organizational structure and enforcement capacity of the tax authority meet the
requirements of the new phase; intensify the efficiency of cooperation between
the tax authority and government at all levels and relevant departments in
managing household businesses. Formulate tax official teams with appropriate
qualifications, skills, and qualities; establish close inter-agency cooperation
and monitoring mechanisms to successfully implement the proposed solutions.
b. Specific tasks:
- Reorganize
organization and personnel managing household businesses: In addition to
issuance of new procedures, tax authorities shall study and adjust the
organizational structure of provincial tax authorities and tax authorities at
grassroots level to align with managing household businesses declaring taxes. The
management departments of household businesses could be restructured into Teams
to manage and provide assistance to individual/household businesses declaring
taxes (hereinafter referred to as “management teams”). The specified tasks of
the management teams affiliated to grassroots-level tax authorities include: Develop
programs, plans; organize tax administration tasks for household businesses,
implement tax administration procedures for household businesses. The next step
in conversion of household businesses from paying fixed tax into declaring
taxes requires training and improvement of management teams. The Tax Department
and provincial tax authorities shall organize training courses on accounting
regulations, IT skills, guidance skills for propaganda, etc. for tax officials
to fulfill their advisory and assistance roles for household businesses. At the
same time, intensify discipline within teams: uphold the service-oriented
attitude and prevent any disturbances that may inconvenience household
businesses. The code of conduct for tax officials with taxpayers must be
frequently reminded, linked to learning and following the ideology, ethics, and
style of Ho Chi Minh, to develop an image of tax officials as "Disciplined
- Honest - Professional - Dedicated - Connected with the People". The
Human Resource Department of the provincial, provincial tax authorities shall
develop training and reassigning plans, ensuring timely personnel allocation to
areas with increased workload (due to increased household businesses declaring
taxes)
- Amend and
supplement compliance management mechanisms for household businesses: When
household businesses converted into self-declarations and self-payments of
taxes, the monitoring of compliance with tax laws must be focused to detect and
prevent violations. Therefore, it is necessary to: (i) Study and amend the tax
inspection procedures at the head offices of tax authorities and tax
inspections at taxpayer premises, supplement inspection guidelines for
household businesses and apply a risk management for household businesses: select
entities subject to inspections based on risk analysis (from risk criteria);
(ii) Develop inspection programs by topic, by business line, by area for household
businesses; (iii) Compile tax inspection guidelines for household business to
equip tax officials with measures and skills (since inspecting household
businesses is different from enterprises due to incomplete accounting records,
the verification must be done through other sources of information); (iv) focus
on monitoring invoices and suspicious transactions, establish mechanisms to
receive information regarding unusual money flows related to household
businesses from banks and police offices; promptly instruct the
grassroots-level tax authorities to verify, initiate inspections, or transfer
to investigative agencies if there are serious signs of tax evasion; and (v)
develop and impose effective debt collection measures for household
businesses. In practices, household businesses are susceptible and frequently
fluctuate. Failure to collect debts in a timely manner shall lead to prolonged
outstanding debts or unrecovered debts (due to shut down or changes of business
addresses of household businesses). Therefore, it is necessary to develop a
measure to intensify the cooperation with local police offices, commune-levels
authorities in urging household businesses to pay taxes, apply appropriate
enforcement measures (publish notices at business premises, request the
revocation of business licenses if there are delays, etc.)
- Intensification of
cooperation with local governments: Local governments (of communes, wards)
play an important role in state management and tax administration for household
businesses:
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+ Sign regulations on
cooperation between tax authorities and People's Committees at all levels after
fixed tax abolishment. The regulation should specify: Assistance provision from
local governments to tax authorities in investigating business revenue of
household businesses (previously involved in the Tax Advisory Council of
commune, which has been dissolved and replaced by a new cooperation mechanism);
cooperation in updating information about registration, suspension, and shut
down of household businesses; cooperation in enforcement of tax debt
payment (such as license revocation or operation suspension for household
businesses having prolonged tax debts), etc. At the same time, request the
government to provide guidelines for functional departments/divisions (finance,
planning, market surveillance, etc.) to participate and avoid the separate
operation of Tax Department. A specific example of coordination is: To provide personal
identification data – the tax authority shall connect to with the National
Population Database (Scheme 06) to verify household business information. It
requires the assistance provision from local police office and relevant
management agencies. In implementing e-invoices generated from cash registers, provincial
People's Committees are required to provide financial assistance to purchase
machines for disadvantaged household businesses.
In addition to
government authorities, the cooperation with organizations and associations
should also be emphasized: for example: the Women's Union, Youth Union of the
commune/province shall participate in mobilizing young household businesses,
individual businesses who are female, etc. to comply with policies; The branch
of the Chamber of Commerce and Industry (VCCI) shall provide assistance in
network connection of large-, medium-, and small-scale businesses. The
participation of local political system shall create synergies, ensuring that
the tax administration for household businesses under the new method shall be
carried out consistently and smoothly.
5.
IMPLEMENTATION
5.1.
Responsibilities of units affiliated to the Ministry
- The Tax Department
shall lead and organize this Scheme; cooperate with media agencies to
proactively disseminate and comprehend the content of the Scheme; promote the
spirit, creativity, and proactiveness of tax officials and public employees
throughout the Tax sector to achieve the goals and specific tasks outlined in
the Scheme.
- Heads of units
affiliated to the Ministry of Finance shall closely follow the goals, specific
goals and specific tasks of the Scheme to implement the assigned functions and
tasks; cooperate and organize the implementation of the plan according to the
outlined roadmap; provide guidance, inspection, and supervision of plan
implementation.
- Based on the assigned
tasks, the Tax Department shall send an annual report on results of the Scheme
to the Ministry of Finance by December 31.
5.2.
Specific responsibilities of the Tax Department
- Review and propose
improvements to policies and laws related to household businesses: Lead,
advise, and amend the Law on tax administration (replacement); participate in
the development of the Law on Personal Income Tax, Law on fees and charges, Law
on Corporate Income Tax, Law on Assistance for Small and Medium-Sized
Enterprises, and guiding documents on accounting regimes for household
businesses.
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- Efficiently implement
of solutions for e-invoice generated from cash registers: Advise, propose
authorities to provide financial assistance or reduce/exempt taxes for
household businesses using electronic invoices generated from cash registers;
diversify and increase the rewards of the lucky invoice program; etc.
- Evaluate the
implementation of the state budget collection, impact of assistance measures
for the development of private economy, including household businesses,
micro-enterprises on state budget revenue in the long term.
- Intensify digital
transformation, provide free electronic tax services on the Tax Department's
Electronic Information Portal; support tools for tax declaration, payment, and
electronic invoices and develop shared digital platforms for
household/individual businesses. Develop databases for household businesses and
individual businesses; apply digital transformation in risk management for
household businesses and individual businesses.
- Develop compliance
management mechanisms for household/individual businesses: improve risk
criteria, propose legal basis to implement connection to share information
about transactions and cash flow from banks.
- Combat tax base
erosion, invoice trading, fraud, tax evasion, tax appropriation; increase
revenue, continue implementing the Scheme 420 “Innovation and quality
improvement in tax administration for household businesses”; improve digital
transformation, prevent tax losses through input invoice review, cash flow
management, key household businesses management, internal inspections, and debt
management for household/individual businesses.
- Develop tax
inspection guidelines, programs and plans for risk analysis-based inspections
and thematic inspections for household businesses/individual businesses.
- Develop and implement
effective debt collection measures for household businesses/individual
businesses
- Propagate and provide
assistance for household businesses and individual businesses to convert from
fixed tax payment into self-declaration, self- payment of taxes; develop
compliance programs for household businesses diversify assistance channels and
forms for household businesses.
5.3.
Responsibilities of provincial tax authorities
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- Implement electronic
invoice generated from cash registers for household businesses.
- Propagate, assist
household businesses, individual businesses to convert from fixed tax payment
into self-declaration, self-payment of taxes.
- Cooperate
comprehensively and uniformly with departments, committees, sectors, and
People's Committees at all levels to successfully implement the roadmap for
fixed tax abolishment.
- Allocate human
resources to carry out the assigned tasks in the Scheme.
- During official
duties, “put the taxpayers at the center to serve” to prevent disturbances,
inconveniences, difficulties, and obstacles to the business activities of
taxpayers; at the same time, continue to promote and provide guidelines for
household businesses in the area to pay taxes through electronic means, use tax
receipt forms, and prohibit the use of tax receipt forms in areas that do not
meet the prescribed conditions.
(Schedule 1: Detailed implementation
plan of the Scheme)
6.
IMPLEMENTATION BUDGET
The implementation
budget of the Scheme shall comply with applicable laws.
7.
CONCLUSION
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Successful
implementation of the Scheme shall bring many positive results: (i)
For taxpayers that are household businesses: operate in a healthy,
competitive, and equal tax obligation environment; receive assistance in improving
capacity, aim towards a professional business model, expand the scale of
production and business activities; and receive incentives from the State; (ii)
For tax authorities and the State: improve tax administration
efficiency, prevent tax losses, increase revenue in a sustainable way as the
private economy develops; minimize tax evasion through transparent revenue
declaration; save long-term resources by promoting technology application and
voluntary compliance; (iii) For the economy and society: promote the
private economic sector, especially small-scale enterprises and household
businesses, to develop according to their potential and make significant
contributions to GDP growth, job creation, and innovation; establish a culture
of law-abiding business practices, limit the informal sector, improve the
national investment and business environment./.
Schedule 1
PLAN TO IMPLEMENT THE
SCHEME “CONVERSION OF TAX ADMINISTRATION MODEL AND METHODS FOR HOUSEHOLD
BUSINESSES AFTER THE FIXED TAX ELIMINATION”
1.1.
REVIEW AND IMPROVE THE LEGAL FRAMEWORK FOR TAX POLICIES FOR HOUSEHOLD
BUSINESSES
NO.
Operation
Description
Deadline
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Assignment
Leading units
Cooperating units
1
Review
and amend the Law on Tax Administration and its guiding documents to abolish
the fixed tax for household businesses; amend and supplement regulations on
e- invoices (including solutions for cases of issuance of multiple
small-value invoices to ensure convenience and cost savings for taxpayers).
- Study
the model and propose appropriate tax administration methods for household
businesses and individual businesses when the fixed tax is abolished.
- Classify
and redefine the terms of household business and individual businesses for
scale management;
- Roadmap
for implementing e-invoices for household businesses
- Solutions
for cases of issuance of multiple small-value invoices to ensure convenience
and cost savings for taxpayers
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- Apply
flexible tax administration methods and risk-based approaches
October 2025
- The Law
and guiding documents shall be amended
- Proposed
tax administration models and methods
Tax Department
Relevant units
2
Review
and amend the Law on Personal Income Tax to specify policies as stipulated in
Resolution No. 68-NQ/TW
- Study
amending tax
policies for household businesses to reduce differentiation from enterprises,
encourage household businesses to convert into enterprises, avoid legitimate
risk-sharing costs for enterprises
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- Research
the tax rate for household businesses in service provision and other sectors
with significant differences
October 2025
The Law
and guiding documents shall be amended
Department of Management and Supervision of
Policies for Taxes, Fees and Charges
Department of Taxation; relevant units
3
Review
and amend the Law on fees and charges and guiding documents to elaborate
policies as stipulated in Resolution No. 68-NQ/TW.
Review,
provide feedback on amendments to the Law on fees and charges and guiding
documents to abolish licensing fees
October 2025
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Department of Management and Supervision of
Policies for Taxes, Fees and Charges
Department of Taxation; relevant units
4
Review
and amend the Law on Assistance for Small and Medium-Sized Enterprises and
guiding documents to elaborate policies as stipulated in Resolution No.
68-NQ/TW.
Review,
provide feedback on amendments to the Law on Assistance for Small and
Medium-Sized Enterprises to:
+
Supplement provisions for tax exemptions, reductions for relevant entities to
innovative startups; provide financial assistance for businesses to invest in
machinery, technological innovation, costs for digital transformation, green
transformation, sustainable business, circular economy through CIT deductions
or through funds
+
Supplement policies to provide free digital platforms, shared accounting
software, legal consulting services, training on business management,
accounting, tax, personnel, and law for small and micro businesses.
Within 2026
The Law
and guiding documents shall be amended
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Department of Taxation; relevant units
5
Research,
propose the formulation of the Law on Individual Business and guiding
documents to specify policies as stipulated in Resolution No. 68-NQ/TW.
Propose
contents to formulate the Law on Individual Business and guiding documents to
specify policies as stipulated in Resolution No. 68-NQ/TW.
Within 2026
Proposal
documents
Department of Sole Proprietorship and
Collective Economy Development
Department of Taxation; relevant units
6
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Research
to amend a simplified, easy-to-implement, easy-to-comply accounting regime
for household businesses based on revenue scale
Within 2026
Review or
amend the Circular; or issue new guiding documents
Accounting and Auditing Supervisory
Department
Department of Taxation; relevant units
7
Review
and amend Circular No. 133/2016/TT-BTC dated August 26, 2016 guiding a
simplified, easy-to-implement, easy-to-comply accounting regime for small and
medium-sized enterprises
Research
on guiding the simplified, easy-to-implement, easy-to-comply accounting
regime for small and medium-sized enterprises.
2026-2027
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Accounting and Auditing Supervisory
Department
Department of Taxation; relevant units
8
Review
and provide feedback on amending Circular No. 132/2018/TT-BTC dated August
26, 2016 guiding a simplified, easy-to-implement, easy-to-comply accounting
regime for micro-enterprises
Research
on guiding the simplified, easy-to-implement, easy-to-comply accounting
regime for micro- enterprises.
Follow the roadmap to amend tax policy for
micro-enterprises
Review or
amend the Circular; or issue new guiding documents
Accounting and Auditing Supervisory
Department
Department of Taxation; relevant units
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Research
and amend legal provisions on taxes for micro-enterprises which are simplified,
easy-to-implement, easy-to-comply
Research
to amend legal provisions on taxes for micro-enterprises which are
simplified, easy-to-implement, easy-to-comply, without incurring accounting
or administrative personnel to encourage household businesses to operate
under the enterprise model.
2026-2027
Issued
regulations on taxes
Tax Department
Department of Management and Supervision of
Policies for Taxes, Fees and Charges; relevant units
10
Accelerate
the implementation of Decision No. 508/QD-TTg dated April 23, 2022 approving
the Tax reform strategy by 2030
Accelerate
the implementation of the Tax reform strategy by 2030 according to the
viewpoints and goals set out in Decision No. 508/QD-TTg dated April 23, 2022
...
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Tasks and
solutions to be accelerated for implementation
Department of Management and Supervision of
Policies for Taxes, Fees and Charges
Relevant units
11
Accelerate
administrative tax procedure reform according to the direction on Resolution
No. 68-NQ/TW.
Reduce at
least 30% of the processing time for administrative procedures, at least 30%
compliance costs, and continue to reduce in the following years.
2025-2026
Amend and
supplement legislative documents to ensure effective implementation of the
plan to reduce and simplify tax administrative procedures to align with the
goals and results outlined in Resolution No. 68-NQ/TW of the Politburo
Units affiliated to the Ministry of Finance
...
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1.2.
IMPROVEMENT OF TAX ADMINISTRATION METHODS
NO.
Operations
Description
Deadline
Outputs
Assignment
Leading units
Cooperating units
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Develop
tax administration procedures for household businesses that meet the general
requirements of redesigning the tax administration procedures
Amend the
tax administration procedures for household businesses, individual businesses
in a simplified and automatic direction which may reduce time and
implementing costs.
October 2025
Develop
and issue procedures
Tax Department
Relevant units
2
Evaluate
the implementation of the state budget collection, impact of assistance
measures for the development of private economy, including household
businesses, micro-enterprises on state budget revenue in the long term.
- Report
the results of implementing the state budget collection for the private
economy sector after the implementation of Resolution 68.
...
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- Assign
household businesses' tax collection tasks
Periodically before the 20th of each month
Evaluate
results and impacts; assigned tax collection tasks
Tax Department
Relevant units
3
Solutions
to increase revenue, ensure accurate and sufficient tax obligations that
actually incurred.
Research
and propose solutions to increase revenue, ensure accurate and sufficient tax
obligations that actually incurred.
2025-2026
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Tax Department
Relevant units
4
Develop,
amend forms for tax declaration, exemptions, reductions, etc. for eligible
subjects
Research
to develop and amend forms for tax declaration, exemptions, reductions, etc.
in accordance with policies for developing private economy.
After the issuance of tax policies
Forms to
be reviewed and amended
Tax Department
Relevant units
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Review
declaration forms; e-tax declaration; e-tax payment for household businesses
Review
declaration forms; e-tax declaration; e-tax payment for household businesses
to ensure criteria of simplicity, easy to comply with, easy to implement, and
integration of information.
November 2025
Declaration
forms to be reviewed and amended
Tax Department
Relevant units
6
Effective
implementation of solutions for e-invoices generated from cash registers
- Advise,
propose financial assistance for household businesses that fail to meet the
conditions for information technology infrastructure, solution to issue
e-invoices generated from cash registers.
...
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- Implement
the solution of e-invoices generated from cash registers according to Decree
70/2025/ND-CP
November 2025
Implemented
solutions
Tax Department
Relevant units
7
Develop procedures
for managing e-invoices, e-records (including e-invoices generated from
cash registers)
to ensure compliance with Decree No. 70/2025/ND-CP
Research
to develop procedures for managing e-invoices, e-records
November 2025
...
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Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Tax Department
Relevant units
8
Continue
to implement Project 420
Continue
to implement the tasks of managing household businesses under Project 420
2025-2026
Implemented
tasks
Tax Department
Relevant units
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Monitor
and urge Sub-Committees to implement the plan according to the schedule;
Consolidate, report, evaluate and propose comprehensive solutions
Monitor
and urge Sub-Committees to implement the plan according to the schedule;
Consolidate, report, evaluate and propose comprehensive solutions
Periodically before the 20th of each month
Report
Tax Department
Relevant units
1.3.
APPLICATION OF DIGITAL TECHNOLOGY, E-INVOICES, DEVELOPMENT OF SHARED DIGITAL
PLATFORMS
NO.
Operations
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Deadline
Outputs
Assignment
Leading units
Cooperating units
1
Provide
free e-tax services on the Tax Department's Electronic Information Portal;
tools to assist the tax declaration and payment by electronic means for
household businesses and individual businesses on the Etaxmobile application
Implement
upgrading the Tax Department's Electronic Information Portal; Etax Mobile
application for declaration submission by household businesses/
August 2025
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Tax Department
Relevant units
2
Develop
application systems to automatically determine tax obligations based on
e-invoice data and suggest tax declarations for household businesses.
- Report
technical solutions for consolidating invoice data for pre-filled
declarations
- Organize
business requirements analysis to develop suggested tax declarations, conduct
testing, and deploy officially
3rd quarter of 2025 - 1st quarter of 2026
Suggested
tax declarations for household businesses
Tax Department
...
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3
Cooperate
with accounting software providers, tax declaration software providers at
discounted or free prices for household businesses as directed by the
Ministry of Finance/Tax Department (if any)
Research,
cooperate with service providers to implement and develop software at
discounted or free prices for household businesses in line with policy
changes.
As directed by the Ministry of Finance
Software
developed and provided for free
Tax Department
Relevant units
4
Implement
risk management solutions for taxes and invoices for household businesses
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
- Improve
business analysis according to the criteria index set by the Tax Department
- Complete
the application of the risk index criteria in tax and invoice management for
household businesses and individual businesses
November 2025025 <0}
Implement
risk management solutions for taxes and invoices for household businesses
Tax Department
Relevant units
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Upgrade
the Digital Map (for household businesses paying fixed tax) to the Directory
of household businesses/ Directory of household businesses declaring taxes
Review
all household businesses, addresses, revenue, fixed tax payable; publish
information about household businesses on the Digital Map of household
businesses
4th quarter of 2025 - 2026
Digital
Map upgraded to Directory of household businesses
Tax Department
Relevant units
6
Implement
solutions to connect and exchange information with relevant parties to serve
tax administration for household businesses
- Develop/
upgrade IT
applications to connect and receive data from Banks
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Implemented
solutions for information connection and exchange
Tax Department
Relevant units
7
Upgrade
information technology systems, e-invoice and record applications to comply
with Decree No. 70/2025/ND-CP
Upgrade
information technology systems, e-invoice and record applications to comply
with Decree No. 70/2025/ND-CP
July 2025
upgraded
IT systems
Tax Department
...
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Pro tại đây để xem toàn bộ văn bản tiếng Anh.
8
Upgrade
applications to comply with amendments and supplements to policies for
assisting private economy development
Research
and upgrade applications to comply with amendments and supplements to
policies for assisting private economy development
According to the policy issuance schedule
Upgraded
applications
Tax Department
Relevant units
9
Assist
API to lookup invoices, automate e-invoice procedures for units (household
businesses, enterprises)
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
November 2025
Application
programming interface (API) is developed
Tax Department
Relevant units
10
Directly
submit tax declarations through the T-VAN service portal (from sales
software, invoice software) instead of manually declaring on the e-tax website.
Research
and develop methods to assist the direct submission of tax declarations
through the T-Van service portal
November 2025
Assistance
methods
...
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Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Relevant units
11
Research
and develop an information portal to provide assistance for household
businesses and individual businesses
Research
and develop a information portal to provide assistance and training for
household businesses and individual businesses with a simple, easy-to-use
interface for providing information, training materials, guidance, and
comprehensive tax policies for household businesses, individual businesses,
and enterprises
August 2025
Information
portal to provide assistance for businessmen <0}
Tax Department
Relevant units
1.4.
IMPROVEMENT OF RISK MANAGEMENT AND COMPLIANCE MANAGEMENT WITH TAXPAYERS
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Operations
Description
Deadline
Outputs
Assignment
Leading units
Cooperating units
1
Amend and
supplement the criteria set on risk management in tax administration for
household businesses and individual businesses, including electronic invoices
and records
...
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
November 2025
Decision
to issue the criteria set (amended and supplemented) and the application
procedures
Tax Department
Relevant units
2
Intensify
connectivity, integration, and sharing of data with relevant ministries,
departments, and units (as stipulated in Law on Tax administration and
Government’s Scheme 06 on developing population data and electronic
identification) to closely monitor operations of household businesses after
abolishing fixed tax, timely detect and identify tax risks or violations
against laws.
- Research,
propose the establishment of a legal framework and intensify the cooperation
with banks in implementing data sharing of transactions and cash flows from
banks for analysis, reconciliation, and processing for household businesses committing
violations against tax laws.
2025-2026
Report on
research results/ regulations
for exchange and cooperation implemented
...
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Relevant units
3
Guide tax
authorities at all levels to implement documents on exchanging information on
e-invoices and records according to focal points with external agencies and
organizations at the same level or as assigned by the head of the tax
authority.
- Monitor
and guide provincial tax authorities and tax authorities at grassroots level
to implement documents on exchanging information on e-invoices and records
- Resolve
any issues arising in accordance with guidance of the Tax Department
3rd quarter of 2025-2026
Monthly
reports/ Guidance
activities implemented
Tax Department
Relevant units
...
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Cooperate in applying tax administration
measures to identify entities using e-invoices generated from cash registers
as prescribed
- Develop a database of household businesses
in the area including revenue, fixed tax rates, value of goods and services
purchased and sold, labor costs, rent costs, etc. to identify entities using
e-invoices generated from cash registers.
- Send a detailed list of household
businesses using e-invoices generated from cash registers to the provincial
tax authority for review and verification to develop and manage implementation plans
3rd quarter of 2025 -
1st quarter of 2026
Analysis data reports of tax authorities at
grassroots level and provincial tax authorities
Tax Department
Relevant units
5
Receive and process information; direct
provincial tax authorities to review and verify suspicious transactions,
include them in the inspection scope or transfer to investigative authorities
for handling as required.
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Case-by-case
Processed information on suspicious
transactions
Tax Department
Relevant units
6
Review and detect to prevent household
businesses from failure to register, register for taxes, pay taxes; or ensure
an equal and healthy business environment.
- Instruct provincial tax authorities to
regularly review and detect to prevent household businesses from failure to
register, register for taxes, or pay taxes.
Provincial tax authorities shall regularly
review and detect to prevent household businesses from failure to register,
register for taxes, or pay taxes.
Quarterly reports
...
...
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Tax Department
Relevant units
7
Intensify compliance management through using
e-invoices and encouraging consumers to request invoices; Strengthen tax
administration for household businesses on digital platforms and foreign
suppliers
- Direct provincial tax authorities to: Review
data of purchased and sold invoices of household businesses/ individual business to
compare revenue, tax obligations of household businesses/ individual
business, then develop thematic inspection plans and ad-hoc inspection plans;
supervise the issuance and use of e-invoices by taxpayers under management.
- Quarterly conduct data review of purchased
invoices of household businesses/ individual businesses paying fixed taxes for
all household businesses/ individual businesses to detect those fail to fixed
taxes aligned with actual business activities.
- Intensify data
analysis from the e-invoice system to identify risks; issue early warnings of
violations from invoice data (send warnings to taxpayers upon detecting any
suspicious violation and suspend the use of invoices if high risk
identified).
- Implement measures
to encourage consumers to request invoices (lucky draw program, promotions
with invoices; communication program on rights and obligations when
requesting invoices; etc.); strengthen handling of failure to issue invoices
when providing goods/services.
- Collect transaction
account information of household businesses on digital platforms, foreign
suppliers to control cash flow for appropriate management measures.
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
October 2025:
Directive completion; Regular reports
Directive documents; Implemented management
measures; Collected information
Tax Department
Relevant units
8
Lead the guidance in
developing programs and plans for risk analysis-based inspections and
thematic inspections for household businesses/individual businesses.
- Lead the guiding
provincial tax authorities in developing programs and plans for risk
analysis-based inspections and thematic inspections for household
businesses/individual businesses; consolidate results and report to the Tax
Department periodically
Periodically
Inspection program
developed
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Relevant
units
9
Develop guidance documents
for tax inspections for household businesses/individual businesses.
Research, implement
the development of guidance documents for tax inspections for household
businesses declaring taxes.
November
2025
Guidance documents
issued
Tax
Department
Relevant
units
10
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
- Research and amend
the procedures for tax debt enforcement and collection plan according to the
plan to redesign the operational procedures.
- Implement effective
debt collection measures for household businesses/individual businesses
November
2025
Implemented solutions
Tax
Department
Relevant
units
1.5.
PROPAGANDA AND ASSISTANCE PROVISION FOR TAXPAYERS
NO.
Operations
...
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Deadline
Outputs
Assignment
Leading
units
Cooperating
units
1
Develop and implement
a regular, extensive, and diverse propaganda program on Resolution No. 68-NQ/TW
and on Resolution No. 68-NQ/TW and role of private economy towards: diversifying
forms and methods of propaganda; specifying the content of propaganda for
each group of taxpayers.
- Develop and
implement a regular, extensive, and diverse propaganda program on Resolution
No. 68-NQ/TW and on Resolution No. 68-NQ/TW and role of private economy
August
- September 2025
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Tax
Department
Relevant
units
2
Develop a specialized
media program on the development of the private economy on television, radio,
social media, and online newspapers to inspire entrepreneurship and promote
strong development of the private economy.
- Organize
Conferences, Seminars, and cooperate with media channels to solicit opinions
and develop tax policy when abolishing fixed tax.
- Develop a
specialized media program on tax policies when abolishing fixed tax in
accordance with the issuance of the Law on Tax Administration; In which
policies to encourage the conversion from household businesses to enterprises
shall be focused.
August
- September 2025: after the issuance of the Law on Tax Administration
Specialized
communication topics developed
Tax
Department
...
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3
Develop and implement
a campaign to propagate and disseminate laws for household businesses
(including: benefits and solutions to encourage household businesses to
convert into enterprises, tax obligations for household businesses, legal
regulations on violation handling to be disseminated, etc.)
- Develop campaigns
to propagate and disseminate laws for household businesses after the issuance
of the Law on Tax administration, including: benefits and solutions to
encourage household businesses to convert into enterprises, tax obligations
for household businesses, legal regulations on violation handling to be
disseminated, etc.)
After
the issuance of the Law on Tax administration
Campaign on
propagating and disseminating laws implemented
Tax
Department
Relevant
units
4
Organize the
industry-wide training conferences/dialogues on tax administration for
household businesses when abolishing fixed tax.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
- Organize industry-wide
training conferences on tax administration to explain, guide, and resolve
difficulties for household businesses when converting tax declaration methods
After
the issuance of the Law on Tax administration
Training/dialogue
program implemented
Tax
Department
Relevant
units
5
Develop a compliance
support program for household businesses when abolishing fixed tax and converting
to a declaration method
- Compliance support
program for household businesses
Before
November 2025
...
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Tax
Department
Relevant
units
6
Diversify support
channels for small enterprises and household businesses, such as: developing
tax guidance materials (printed, infographic, short videos); online
consultation via social media, chatbots, hotlines; organizing programs for
recognizing and honoring taxpayers pioneering in the conversion.
- Develop a guidebook
to provide guidelines for taxpayers (after officially abolishing the fixed
tax). Publish the guidebook on the Tax Department’s website
- Cooperate in
providing information
disclosed on the website on household business training, etc.
- Cooperate with
Vietnam Association of Certified Public Accountants to organize training and
conferences on new policy documents for household businesses.
- Collect issues from
taxpayers to develop practical support content
- Organize programs
for recognizing and honoring taxpayers pioneering in the conversion.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Implemented support
channels
Tax
Department
Relevant
units
SCHEDULE 2: TAX ADMINITRATION MODELS FOR
HOUSEHOLD BUSINESSES AND INDIVIDUAL BUSINESSES
Criteria
Group
1
Revenue
≤ 200 million VND
Group
2
...
...
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Group
3
Revenue > 3 billion VND
VAT
Exempted
- Direct method based
on % of revenue
VAT payable = Revenue
x Rate %
- Voluntarily
register for deduction method if eligible
VAT payable = Output
VAT – deductible amount
- Mandatory deduction
method
VAT payable = Output
VAT – deductible amount
...
...
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Exempted
Calculated based on %
of revenue by industry
PIT payable = Revenue
x Rate %
Calculated on taxable
income at 17%
(Taxable income =
revenue - reasonable expenses)
Declaration
Responsibility
Declare twice a year
(beginning/mid-year and end of year) to determine tax obligations
Quarterly
declarations + annual settlement
Declare monthly (if
annual revenue exceeds 50 billion) or quarterly, with annual settlement
...
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Encourage the use of authenticated
e-invoices (in transactions with consumers)
Required to use
e-invoices generated from cash registers if Revenue > 1 billion VND and
engaged in direct sales or service provision to consumers;
Required to use
authenticated e-invoices or e-invoices generated from cash registers
Accounting Records
Simple record-keeping
(supported by free basic software)
Simple accounting
records, free software
Required according to
the accounting regime of small or medium-sized enterprises
Bank Accounts
Not required
...
...
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Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Required to open a
separate account for business purposes
Tax calculation
method conversion
Not applicable
If Revenue > 3
billion VND for 2 consecutive years → apply as Group 3 from the following
year
Apply as an
enterprise. Input VAT can be deducted from the first period
E-commerce Platforms
If the platform has
payment functions:
- Platform deducts,
declares, and pays VAT, PIT based on % of revenue
- If end-year Revenue
< 200 million, overpaid taxes shall be refunded
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- Individuals must
self-declare and pay taxes under separate declarations, monthly, or quarterly
If the platform has payment
functions:
- Platform deducts,
declares, and pays VAT, PIT based on % of revenue
- If end-year Revenue
< 200 million, overpaid taxes shall be refunded
If the platform does
not have payment functions:
- Individuals must
self-declare and pay taxes under separate declarations, monthly, or quarterly
If the platform has
payment functions:
- Platform deducts,
declares, and pays VAT, PIT based on % of revenue
- If end-year Revenue
< 200 million, overpaid taxes shall be refunded
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- Individuals must
self-declare and pay taxes under separate declarations, monthly, or quarterly
Support from
regulatory agencies
- Free accounting
software
- Assist to use e-
invoices
- Legal advice
- Free accounting
software
- Assist to use e-
invoices
- Legal advice
- Free accounting
software
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- Legal advice
- Encourage conversion
into enterprises for incentives under Resolutions 68 & 198
Schedule 3: PROPAGANDA CAMPAIGN FOR TAXPAYER
ASSISTANCE
"Fixed tax
abolishment, Transparency increase - Long-term companionship”
LIST OF SCHEDULES AND CHARTS
- Chart 1: Comparison of legal
regulations between household businesses and small enterprises.
- Chart 2: International
experiences in tax administration for household businesses
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- Schedule 1: Detailed implementation
plan of the Scheme:
1.1. Review and improve
the legal framework for tax policies for household businesses
1.2. Improvement of tax
administration methods
1.3. Application of
digital technology, e-invoices, development of shared digital platforms
1.4. Improvement of
risk management and compliance management with taxpayers
1.5. Propaganda and
assistance provision for taxpayers
- Schedule 2: Tax administration
models for household businesses when abolishing fixed tax
- Schedule 3: Campaign model for
propaganda and assist taxpayers
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COMPARISON OF LEGAL REGULATIONS BETWEEN HOUSEHOLD
BUSINESSES AND SMALL ENTERPRISES
NO.
CONTENT
HOUSEHOLD
BUSINESSES PAYING FIXED TAX
HOUSEHOLD
BUSINESSES DECLARING TAX
SMALL
ENTERPRISE
I
Business
registration procedures
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- Implementation
methods: In
person and online
- Application:
(i) Application form
for household business registration;
(ii) Personal papers
of the household business owner; or personal papers of the household business
member if the registration is carried out by the member;
(iii) Copies of meeting
minutes of household businesses if the registration is carried out by the
member;
(iv) Copy of
authorization letter to the member carrying out the registration.
- Processing time: 03 working days from
the date of receiving a satisfactory application.
- Legal basis: Law on Enterprise No.
59/2020/QH14; Decree No. 01/2021/ND-CP on business registration; Circular No.
01/2021/TT-BKHDT on business registration; Circular No. 02/2023/TT-BKHDT
amending and supplementing some provisions of Circular No. 01/2021/TT-BKHDT
- Implementation methods:
In
person and online
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(i) Application form
for household business registration;
(ii) Copy of
personal papers of the owner of sole proprietorship
(iii) Original copy
of Certificate of household business registration
(iv) Copy of Tax
Registration Certificate
- Processing time: 03 working days from
the date of receiving a satisfactory application.
II.
Tax policies
1
Tax
registration
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- Implementation
mechanism:
+ Inter-agency
single-window system for business registration, cooperative registration, and
business registration stipulated in the Law on Enterprise;
+ Direct registration
with the tax authority in the cases where the household business/ individual business
is engaged in production, trading of goods/services as per laws but is not
subject to household business registration through the business registration
agency as per Government’s regulations on household businesses/individual
businesses of countries sharing land borders with Vietnam that conduct
purchase, sale or barter goods at border marketplaces, checkpoint
marketplaces and marketplaces in checkpoint economic zones.
- Legal basis: Law on Tax
Administration No. 38/2019/QH14; Circular No. 86/2024/TT-BTC on tax
registration.
- Implementation
mechanism:
+ Inter-agency
single-window system for business registration, cooperative registration, and
business registration stipulated in the Law on Enterprise;
Direct registration
with the tax authority in the cases where the enterprise operates in
specialized fields that do not require business registration through the
business registration authority as per the regulations of the specialized
legal sector, etc.
2
Tax
declaration procedures
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- Tax declaration:
Tax declaration form
for household businesses and individual businesses, form No. 01/CNKD
- Tax declaration
period: once
a year
- Legal basis: Law on Tax
administration No. 38/2019/QH14; Decree No. 126/2020/ND-CP of the Government
- Tax declaration:
+ Tax declaration
form for household businesses and individual businesses, form No. 01/CNKD
+ Appendix: List of
business operations during the period of household businesses/individual
businesses, form No. 01-2/BK-HDKD
- Tax declaration
period: Monthly
or quarterly declaration for VAT and PIT.
- Legal basis: Law on Tax
administration No. 38/2019/QH14; Decree No. 126/2020/ND-CP of the Government,
Circular No. 80/2021/TT-BTC of the Ministry of Finance
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+ CIT declaration
form No. 02/TNDN, 03/TNDN and enclosed appendices and documents;
+ VAT declaration
form No. 01/TNDN and enclosed appendices and documents;
+ PIT declaration
form No. 05/KK, 05/QTT-TNCN and enclosed appendices and documents;
+ Environmental
protection tax declaration form No. 01/TBVMT and enclosed appendices and
documents;
+ Severance tax
declaration form No. 01/TAIN and enclosed appendices and documents;
+ Excise tax
declaration form No. 01/TTDB and enclosed appendices and documents;
- Tax declaration period:
+ Monthly or
quarterly declaration for VAT and PIT.
+ Declare CIT under
separately or monthly for irregular incomes and apply direct method to
calculate CIT.
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+ Declare excise tax,
environmental protection tax, and severance tax monthly.
3
Use
of invoices
Household businesses
paying fixed tax, if there is a need to use invoices, shall be issued with
authenticated invoices; declare taxes and pay taxes before the tax authority
issues e-invoices separately. From June 1, 2025, invoices must be used
according to the regulations in Decree No. 70/2025/ND-CP.
Household businesses
declaring taxes must use authenticated invoices when selling goods/providing
services. From June 1, 2025, invoices must be used according to the regulations
in Decree No. 70/2025/ND-CP.
Enterprises, economic
organizations use authenticated invoices when selling goods/providing
services without differentiating the value of each transaction.
4
Tax payable
4.1
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PIT payable = taxable
income determined by the tax authority x PIT rate
PIT payable = taxable
income declared by the taxpayer x PIT rate
+ In case the
enterprise determines revenue and expenses:
CIT payable =
(taxable income - reserve for R&D (if any)) x CIT rate
Taxable income =
Taxable revenue - (Tax-exempt income + Carry-forward losses)
Taxable revenue =
Revenue - Deductible expenses + Other income subject to tax
+ For enterprises
that directly determine VAT but do not determine expenses:
CIT payable =
4.2
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VAT payable = Taxable
revenue for VAT x VAT rate
VAT payable = Taxable
revenue for VAT x VAT rate
+ For the deduction
method:
VAT payable = Output
VAT – Input VAT
+ For direct
calculation method on VAT:
VAT payable = Revenue
x Rate %
4.3
Excise
tax
Excise
tax payable = Calculated price of taxable goods x Excise tax rate
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Severance
tax
Severance
tax payable in the period = Taxable extraction quantity of natural resources
x Unit price x Tax rate
4.5
Environmental
protection tax
Environmental
protection tax payable = quantity of unit of taxable goods x absolute rate
specified on a unit of goods
5
Tax
payment
Via iCanhan, eTax
Mobile
Via iCanhan, eTax
Mobile
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III.
Accounting
regime implementation
Household businesses,
individual businesses paying fixed tax that fail to implement or incompletely
implement accounting, invoices, and records.
Household businesses,
individual businesses declaring taxes must implement the accounting system
according to Circular No. 88/2021/TT-BTC dated November 10, 2021
- Accounting records
(5 records)
- Accounting books
including 7 books
+ Micro-enterprises
shall implement the accounting system according to Circular No.
132/2018/TT-BTC
++ Micro-enterprises
pay CIT according to taxable income-based method Accounting records (9 records);
Chart of accounts; Accounting books (10 books); Financial statements
++ Micro-enterprises
pay CIT based on a percentage of revenue from sales of goods/service
provision: Accounting records (9 records); Chart of accounts (if it is not
required, accounting accounts shall not be opened and invoices shall be
recorded in accounting books);Accounting books (4 books)
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- Accounting norms
- Chart of accounts
- Financial reporting
system (Balance sheet, Income statement, Notes to financial statements)
- Accounting record
regime
- Accounting books
regime
IV
Implement
social insurance regulations
- Legal basis: Law on Social
Insurance No. 41/2024/QH15.
- Household business
owners with registered business activities are subject to compulsory social
insurance participation.
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- The total social
insurance contribution rate is 31% of the
salary used as the basis for
compulsory social insurance contribution. Where:
+ Employees
contribute 10,5%
+ Employers
contribute 20,5%
Chart 2
INTERNATIONAL EXPERIENCES IN TAX ADMINISTRATION
FOR HOUSEHOLD BUSINESSES
1. Legal status of
household businesses in countries
1.1. Regarding business
types
√ There are three basic
types of sole businesses worldwide: (i) sole proprietorship or sole trader;
(ii) partnership; and (iii) limited liability company/corporation.
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√ The term of “household
business" (as in Vietnam) is not widely used, but a similar form of
business called Sole Proprietorship is common in countries: Singapore, the
United States, and some European countries (Germany, France, and the
Netherlands).
○ A sole proprietorship
is owned and operated by a person who is personally liable for all financial
and legal obligations of the business.
○ Key characteristics of
a sole proprietorship include: (i) owned by a person, (ii) relatively simple
establishment process, (iii) owner has unlimited liability for business
activities, (iv) profits are taxed as personal income of the owner.
1.2. Legal regulations
for individual businesses/sole proprietorships
√ China has issued a
specific law for individual businesses which is the Sole Proprietorship
Enterprise Law, effective from January 1, 2020. This Law defines a business
owned and operated by a person, who is personally responsible for the business
obligations, may use their home address as the business registration address,
enter into employment contracts with employees and is responsible for
contributing to social insurance for employees. The tax regime for sole
proprietorships in China is personal income tax.
√ In Singapore and
Malaysia, sole proprietorships are specified in the Business Registration Act.
In Thailand, sole proprietorship is a common form of business under the Civil
and Commercial Law.
Generally, sole
proprietorships in various countries are the simplest form of business, with
the lowest costs, most convenience, and the simplest regulations regarding tax
registration, declaration, and payment.
1.3. Statistics on the
ratio of household businesses/sole proprietorships to the population in some
countries
The ratio of household
businesses/sole proprietorships to the population is an important indicator for
the governments and tax authorities:
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√ For tax authorities: Assess tax
contributions, compliance levels, then adjust tax policies according to
optimize resource management. This indicator also helps identify measures to
provide assistance to large household businesses for the conversion into formal
enterprises and create a transparent and fair tax environment.
Schedule
of statistics on the ratio of household businesses/sole proprietorships to the
population in some countries in 2024
Country
Population
Number
of household businesses
(Sole proprietorships)
Ratio
of household businesses to population
Vietnam
101
million
2,2
million
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Thailand
71
million
4
million
5,63%
India
1,43
billion
60
million
4,19%
US
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23
million
6,88%
Canada
39
million
3,5
million
8,97%
UK
69
million
5,9
million
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The ratio of household
businesses to the population in Vietnam in 2024 is approximately 2.17%, which
is relatively low compared to the United States at 6.88%, India at 4.19%,
Thailand at 5.63%, Canada at 8.97%, and the United Kingdom at 8.55%. This ratio
reflects the influence of barriers in terms of registration and development of
sole business forms, requiring more supportive policies for household
businesses, encouraging entrepreneurial spirit, and promoting the conversion of
large household businesses into formal enterprises for transparency and
efficiency in tax administration.
3. Tax administration
for individual businesses/sole proprietorships
3.1. General
characteristics:
According to practices,
countries shall categorize sole business entities into 2 forms: individual
businesses and juridical persons. Regulations on sole proprietorship and the
establishment of such enterprises vary depending on each country. However, most
countries allow operations under the form of Sole Proprietorship, where:
√ Taxpayers may start
businesses without the requirement to establish a formal enterprise with a
separate legal personality (such as an LLC or corporation).
Some countries set
thresholds for revenue, number of employees, etc., to encourage sole
proprietorships to convert into juridical persons (LLCs, etc.) to protect
personal assets, optimize taxes, and reduce legal liability risks. For example:
- Japan: If
annual revenue exceeds 10 million yen (equivalent to USD 75.000), the
consumption tax shall be applicable and it may consider converting into an LLC
(Kabushiki Kaisha, KK) or a single-member LLC (Godo Kaisha, GK).
- Germany: If
annual revenue exceeds 22.000 EUR, taxpayers shall pay VAT and convert into an
LLC.
- France: If annual
revenue exceeds 77.700 EUR for service provision and 188.700 EUR for goods
trade, taxpayers must register as an LLC or a simplified joint-stock company.
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√ Taxes paid by sole
proprietorships include personal income tax, value-added tax (VAT), social
security and health insurance taxes (self-employment tax).
√ Tax regimes for sole
proprietorships: a mix of approaches, with some countries using a
“fixed/estimate tax”, while others require taxpayers to declare and calculate
taxes for all their activities. For example:
- Some countries
apply a fixed tax method, calculated based on: (1) Revenue: fixed tax
amount or percentage of revenue; (2) Based on criteria: money in accounts,
quantity of goods sold, quantity of goods purchased, assets, business location,
business line, etc.
+ Mexico: Individual
businesses whose annual revenue is below 2 million MXN shall pay monthly fixed
tax instead of declaring actual income and expenses. The payable shall be
calculated based on estimated revenue and the type of business.
+ India: Individual
businesses whose annual revenue is below 2 crores INR pay tax at a rate of 8%
of revenue and do not prove actual expenses and profits.
+ Germany: Micro-enterprises,
especially low-income sole proprietorships or family businesses may pay tax at
an estimated rate (fixed tax) instead of declaring detailed revenue and
expenses.
- Some countries
implement a "simplified" self-declaration and self-payment tax system
+ Singapore stipulates that sole
proprietorships /small enterprises/micro-enterprises shall declare and pay
taxes through a self-declaration and self-payment method without applying fixed
tax. The tax authorities in this country have online tax declaration system,
making it easier for taxpayers to fulfill their tax obligations.
+ Canada does not apply fixed
tax for
sole proprietorships. Taxes are calculated based on the actual income of the
business owner, with progressive tax rates for personal income tax and specific
tax regulations for each province.
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3.2. Tax
administration:
Many countries are
gradually phasing out fixed tax and converting to a tax declaration system
based on actual revenue to: (i) reduce tax evasion and revenue loss due to
fixed tax based on estimates leading to lower tax declarations; (iii) ensure
fairness among taxpayers; (iv) align with digital trends (simplify tax
declaring). However, to encourage this conversion, countries have implemented
various coordinated solutions such as exempting initial tax, streamlining
procedures, and providing financial assistance.
Some solutions for taxpayers:
• Tax and cost
incentives in the initial period after conversion:
- Corporate income tax
(CIT) exemption in the first 1-2 years after conversion.
- 50% CIT reduction for
the following 3-5 years to ease financial pressure.
- Licensing fee
exemption in the first year to encourage conversion.
• Simplification
of business registration applications:
- Allow automatic
conversion without dissolving the existing household businesses: Simplify the
conversion procedures for household businesses.
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- Exempt or reduce
registration fees for conversion into an enterprise.
• Loan incentives
for converted enterprises
- Low-interest loan
programs for household businesses converting to enterprises.
- An enterprise shall
receive guarantees from the State banks if it has a good tax history.
• Assistance for
conversion costs
- 50% of business
registration fees and bank account opening fees.
- Provide free
accounting software tax advisory agents for new enterprises in the first 6
months - 1 year.
• Simplification of labor
and social insurance regulations:
- Exemption or
reduction of social insurance contributions in the initial period.
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• Consulting and
training in business management for efficient operations
- Organize training
programs on business management:
+ Free training courses
on accounting, tax, financial management for household businesses before the
conversion.
+ Provide free business
advisors in the first 6-12 months.
- Develop a network to
provide assistance for small enterprises:
+ Connect new
enterprises with business associations and investors.
+ Share experiences
from successful converted household businesses.
• Intensification of
Communication about the conversion benefits for household businesses
Intensify communication
about the conversion benefits for household businesses:
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- Publicize a list of
successfully converted enterprises; Organize events to honor new enterprises
for conversion motivation.
- Establish a network
of “Startup Club” for connection.
Some solutions for tax
authorities:
√ Application of digital
technology for tax compliance management:
Mobile applications for
tax declaration connected to banking and electronic invoice systems to
automatically determine the revenue of household businesses:
- Develop a tax
application for household businesses, allowing them to:
- Declare tax quickly
and easily.
- Remind tax
declaration deadlines
- Look up invoices and
tax reports.
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• Use of artificial
intelligence (AI) assists in tax declaration and revenue analysis:
- Develop an AI system
to analyze data from e-invoices, bank transactions, inventory imports,
electricity and water consumption data, etc.
- Automatically compare
tax declarations of household businesses with similar models to detect
anomalies.
- Apply Big Data
analysis to predict the actual revenue of each business type.
- Automatically provide
a list of household businesses with revenue reaching the threshold to
automatically recommend conversion into a sole proprietorship or limited
liability company.
• Integration with
banks and e-commerce platforms
- Request e-commerce
platforms (Shopee, Lazada, Tiki, etc.) to provide revenue data of household
businesses for tax comparison.
- Apply automatic
taxation for household businesses selling on these platforms (similar to some
countries applying VAT for online sales)
- If household
businesses use bank transaction or trade goods online, the system shall
automatically aggregate revenue to facilitate tax declaration.
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√ Application of risk
management for household businesses
• Complete the risk
assessment criteria for tax risks for household businesses, including updating
and supplementing criteria for household businesses with high revenue
• Apply risk management
for household businesses with high revenue
• Connect with
electronic payment systems for revenue monitoring.
√ Intensification of tax
inspections for large household businesses, especially high-revenue
store chains paying fixed tax./.
Chart 3: STATE BUDGET REVENUE RESULTS OF
HOUSEHOLD BUSINESSES IN 2023-2024 AND THE FIRST 6 MONTHS OF 2025
Unit:
million VND
No.
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2023
2024
The
first 6 months of 2025
The
first 6 months of 2024
All
year
Nationwide
21.638.570
13.063.754
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17.099.683
1
An Giang
786.218
450.737
861.405
457.864
2
Bac Ninh
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263.152
529.915
380.157
3
Ca Mau
430.117
225.884
444.367
238.654
...
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Can Tho
677.244
386.777
749.876
415.656
5
Cao Bang
49.609
27.094
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34.207
6
Da Nang
739.330
479.917
874.546
551.618
7
Dak Lak
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266.365
497.096
274.417
8
Dien Bien
49.070
29.426
55.192
35.857
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Dong Nai
811.383
449.713
903.795
525.282
10
Dong Thap
598.362
339.238
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375.214
11
Gia Lai
426.973
254.027
480.250
293.035
12
Hanoi
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2.052.174
4.394.277
3.371.090
13
Ha Tinh
130.823
84.009
170.016
104.898
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Hai Phong
604.371
360.747
692.859
504.939
15
Hung Yen
189.693
147.400
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230.302
16
Khanh Hoa
609.226
399.926
633.289
448.509
17
Lai Chau
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16.408
29.150
21.105
18
Lam Dong
876.320
496.397
961.345
597.643
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Lang Son
86.557
51.261
96.179
60.135
20
Lao Cai
183.310
112.474
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148.390
21
Nghe An
249.926
141.753
299.718
181.941
22
Ninh Binh
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142.561
284.421
250.645
23
Phu Tho
285.748
200.070
396.565
283.239
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Quang Ngai
193.757
108.142
209.500
118.938
25
Quang Ninh
374.423
224.408
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253.947
26
Quang Tri
146.116
82.993
160.613
98.203
27
Son La
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38.232
69.887
46.723
28
Tay Ninh
623.408
341.334
692.295
400.186
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Thai Nguyen
218.235
130.257
251.330
178.536
30
Thanh Hoa
198.604
124.595
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186.163
31
Thua Thien Hue
171.663
94.343
185.268
99.486
32
Ho Chi Minh City
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4.126.727
8.258.889
5.436.219
33
Tuyen Quang
144.681
88.824
169.222
113.688
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Vinh Long
599.374
326.388
653.374
382.795