Household businesses and individual business owners with annual revenue exceeding VND 500 million are required to pay value-added tax (VAT) on their entire revenue, rather than being entitled to deduct the VND 500 million tax-exempt threshold as applied under the personal income tax regulations.
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Pursuant to Point b, Clause 1, Article 1 of the Law amending the Law on Value-Added Tax 2025, which amends Clause 25, Article 6 of the Law on Value-Added Tax 2024, goods and services provided by household businesses and individual producers or business operators with annual revenue of VND 500 million or less; assets sold by organizations and individuals that are not engaged in business and are not VAT taxpayers; national reserve goods sold by national reserve agencies; and fees and charges collected in accordance with the law on fees and charges shall be subject to non-taxable status for value-added tax as from January 1, 2026.
Previously, pursuant to Clause 25, Article 5 of the Law on Value-Added Tax 2024, goods and services provided by household businesses and individual producers or business operators with annual revenue of VND 200 million or less; assets sold by organizations and individuals not engaged in business and not being VAT taxpayers; national reserve goods sold by national reserve agencies; and fees and charges collected in accordance with the law on fees and charges were not subject to value-added tax.
Compared to the previous regulations, the Law on Value-Added Tax 2024 only granted VAT exemption to household businesses and individual producers or business operators with annual revenue of VND 200 million or less.
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Image 1. Household businesses with annual revenue under VND 500 million are not required to pay value-added tax (VAT)_Hotline: 0972118764
However, from January 1, 2026, individuals and household businesses with total annual revenue of VND 500 million or less will not be required to pay value-added tax (VAT), representing a VAT threshold that is doubled compared to the previous regulations.
Note: The first tax filing period for most household businesses will be the first quarter of 2026, with the filing deadline being April 30, 2026; however, the preparation of accounting records and invoices should be carried out from the beginning of the year.
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Social and Economic General Department - TLK Law Company Limited
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