Ramping up support for business households transitioning to the tax declaration model

According to regulations, the lump-sum tax mechanism for business households will officially come to an end on January 1, 2026. Instead, business households will be required to shift to the tax declaration method.

Business households register tax declaration at Dong Nai Base Tax Office No. 3

Under the new regulation, business households will self-declare and pay taxes based on their actual generated revenue. To implement this new tax policy in practice, the tax sector is launching a 60-day peak campaign to transition the management model for business households from the lump-sum tax regime to the tax declaration method. The campaign aims to ensure that 100% of business households receive information and support from the tax authorities.

Business households look forward to receiving support from the tax agency

With the message “60 days of action – Substantive transformation – Elevating declaration-based household businesses toward transparency and modernization”, the tax sector’s 60-day peak campaign is attracting the attention of individuals, business households, particularly those currently under the lump-sum tax mechanism.

Tran Thi Ly, owner of a grocery store in Dinh Quan Commune, shared that for more than 20 years of running her business, she had been paying taxes under the lump-sum mechanism. As a result, she did not need to track inventory, use invoices when purchasing or selling goods, or keep detailed records of her monthly revenue, which was only estimated. Therefore, upon hearing about the transition to a new tax management model for business households, she expressed strong interest in it.

To encourage and support business households in transitioning to the new tax management model, the Tax Department has requested that tax solution providers refrain from imposing any additional costs on them. Registration, tax declaration, and electronic tax payment are provided free of charge, with no additional fees or software purchase requirements for business households.

“Many business households are still concerned because they are older and unfamiliar with using smart devices and electronic equipment. I sincerely hope that the tax agency will pay attention, provide guidance, and accompany us so that we can conduct our business in compliance with the law,” Ly added.

Following the issuance of Resolution No. 68-NQ/TW dated May 4, 2025, by the Politburo on the development of the private economy, and under the direction of the Ministry of Finance, the tax sector has carried out comprehensive preparations and activities. These include a full review of existing business household data to serve as a foundation for the transition, ensuring accuracy and avoiding any omissions. At the same time, the roles and responsibilities of the tax authorities and local People's Committees were clearly defined to establish unified coordination points in each locality. This initiative is considered a proactive and timely step to fully grasp and anticipate the situation before launching the 60-day peak campaign for tax model transition.

Speaking about the benefits of transitioning to the new tax management model for business households, Nguyen Van Binh, Head of Tax Office No. 6 under the Dong Nai Provincial Tax Department, stated that shifting from the lump-sum tax mechanism to the self-declaration method will promote fairness and transparency. The transition also helps business households manage cash flow through proper record-keeping, verify the origin of purchased and sold goods, and use actual, invoice-based revenue as a basis when applying for business loans. Notably, under the self-declaration method, business households will store invoices, documents, and electronic declarations in a systematic and organized manner. This endeavor also enables them to confidently sign contracts and sell goods to organizations and enterprises that require invoices. Moreover, it presents an opportunity for business households to expand their operations while accessing government support and preferential policies.

Identifying household businesses subject to tax declaration

According to guidance from the tax authorities, business households under the self-declaration method are classified into three groups: Business households and individuals with annual revenue of 200 million VND or less. This group is exempt from paying value-added tax and personal income tax. However, they must still submit tax declarations twice a year (at the beginning/middle, and end of the year) to determine their tax obligations. These households are encouraged to use e-invoices with a code when transacting with consumers and to maintain basic accounting records.

Business households with annual revenue exceeding 200 million VND and up to 3 billion VND are required to pay tax based on the revenue percentage applicable to each business sector. They may also voluntarily register for the deduction method if they meet the eligibility criteria. Tax declarations must be filed quarterly (four times a year), along with an annual tax finalization. In cases where yearly revenue exceeds 1 billion VND, and the household engages in retail sales of goods or direct provision of services to end consumers, they are required to use e-invoices generated from point-of-sale systems. Additionally, these households must open a dedicated bank account for business transactions and will be provided with free accounting software, legal consultancy, and guidance on the use of e-invoices.

Business households with annual revenue exceeding 3 billion VND are required to apply the deduction method and are managed similarly to micro or medium-sized enterprises. They must pay value-added tax under the input credit method and also pay personal income tax. Business households in this group must use authenticated e-invoices or e-invoices generated from cash registers, open a dedicated business bank account, and implement accounting systems similar to those used by enterprises.

Implementing the directive of the Provincial Tax Department on supporting household businesses in transitioning to the new tax management model, Director of the Dong Nai Provincial Tax Department, Nguyen Toan Thang, stated that the tax authority will support household businesses in switching their bookkeeping to electronic devices in the most straightforward manner, facilitating easier tax declarations. The tax sector has partnered with several reputable and capable tax solution providers to offer software, e-invoicing systems, and accounting solutions, including VNPT, Viettel, MISA, along with several commercial banks that assist household businesses in opening business bank accounts, thereby jointly supporting the transition to the new tax model with reasonable costs and user-friendly solutions. Currently, several solution providers are offering free (time-limited) support to household businesses as they adapt to the shift from the lump-sum tax regime to the self-declaration tax method.

By Ngoc Lien – Translated by Thu Hien, Minho