Decree No. 68/2026/ND-CP: Updates on tax policies and tax administration for household businesses and individual businesses effective from 5 March 2026

In order to provide detailed guidance on tax declaration and payment for household businesses (“HBs”) and individual businesses (“IBs”), the Government has issued Decree No. 68/2026/ND-CP on tax policies and tax administration applicable to these entities (“Decree 68”), effective from 5 March 2026.

Increase in taxable revenue threshold

One notable point under Decree 68 is the introduction of an annual revenue threshold of VND 500 million as the basis for determining tax obligations. Accordingly, HBs and IBs with annual revenue of VND 500 million or less are not subject to value-added tax (“VAT”) and personal income tax (“PIT”). Conversely, where revenue exceeds this threshold, HBs and IBs must fulfill their tax obligations in accordance with applicable regulations.

Tax calculation methods

For PIT purposes, Decree 68 provides for two (02) tax calculation methods. Specifically, the method of applying a deemed tax rate on taxable revenue applies to HBs and IBs with annual revenue exceeding VND 500 million up to VND 3 billion. Meanwhile, the method based on taxable income multiplied by the applicable tax rate applies to HBs and IBs with annual revenue exceeding VND 3 billion, as well as those with revenue from over VND 500 million up to VND 3 billion that opt to apply this method. Under the latter method, PIT is determined based on taxable income, i.e., revenue after deducting expenses related to business activities during the tax period.

Increased application of e-invoices

In addition to changes in tax calculation methods, Decree 68 strengthens tax administration through the application of e-invoices. Accordingly, HBs with annual revenue of VND 1 billion or more, or those whose VAT taxable revenue in the preceding year is below VND 1 billion but reaches VND 1 billion or more during the tax year, are required to use e-invoices bearing tax authority authentication codes or e-invoices generated from cash registers connected to the tax authority’s system. For those with annual revenue from over VND 500 million to below VND 1 billion, the use of e-invoices is encouraged depending on business needs.

Declaration of bank accounts used for business activities

Another new requirement under Decree 68 is that, from 5 March 2026, HBs and IBs must proactively declare to the tax authorities the bank accounts and e-wallets used for their business activities. This requirement aims to enhance transparency in revenue recognition and the management of cash flows arising from business operations. In practice, for ease of declaration, reconciliation, and tax administration, HBs and IBs should separate accounts used for business activities from those used for personal purposes.

Overall, Decree 68 represents a significant shift in the tax administration mechanism for HBs and IBs, marking a transition from a presumptive tax regime to a system based on actual revenue and e-invoice data. The establishment of the VND 500 million revenue threshold also reflects the authorities’ effort to balance state budget objectives with facilitating smaller-scale business operations. This can be seen as a necessary step toward enhancing transparency in the business environment and promoting more systematic and sustainable tax compliance.

In this context, HBs and IBs should consider the following key implications and actions:

• Review revenue and accurately determine tax obligations

HBs and IBs should proactively monitor, record, and control their revenue to determine whether they fall within the VND 500 million threshold. Exceeding this threshold triggers VAT and PIT obligations; therefore, transparent revenue tracking systems are essential to avoid risks of tax reassessment and penalties.

• Select an appropriate tax calculation method

For those with revenue from over VND 500 million to VND 3 billion, careful consideration should be given to choosing between the deemed tax rate method and the taxable income method. Where input costs are significant and supported by valid documentation, the taxable income method may help optimize tax liabilities.

• Prepare infrastructure for e-invoices

The mandatory application of e-invoices for HBs with revenue from VND 1 billion requires early implementation of appropriate systems (including tax authority-authenticated e-invoices or cash register-based e-invoices connected to tax systems). Delays in implementation may result in business disruption or compliance risks.

• Separate and transparently declare business accounts

The requirement to declare bank accounts and e-wallets used for business activities imposes an obligation to ensure transparency in cash flows. HBs and IBs should maintain separate accounts for business and personal purposes to facilitate declaration, reconciliation, and minimize the risk of incomplete revenue assessment by tax authorities.