Business households and individual businesses are required to pay Personal Income Tax (PIT) and Value-Added Tax (VAT) in accordance with legal regulations. The applicable PIT and VAT rates for specific business sectors are stipulated in Appendix I issued together with Circular No. 40/2021/TT-BTC of the Ministry of Finance.
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Photo 1. Tax rate lookup table for PIT and VAT applicable to business households and individual entrepreneurs_Hotline: 0972118764
Below is the PIT and VAT rate lookup table for business households and individual entrepreneurs:
|
No. |
Business Lines |
VAT Rate |
PIT Rate |
| 1 | Distribution and supply of goods | ||
|
- Wholesale and retail activities for all types of goods (excluding goods sold by agents at fixed prices, earning commissions); - Bonuses, sales support incentives, promotions, trade discounts, payment discounts, and monetary/non-monetary support for contracted households; |
1% |
0,5% |
|
|
- Distribution and supply of goods exempt from VAT, not subject to VAT declaration, or qualifying for 0% VAT under VAT laws; - Business cooperation with organizations in this sector where the cooperating organization is responsible for declaring VAT on the total revenue from the joint business activity as regulated; - Bonuses, sales support incentives, promotions, trade discounts, payment discounts, and monetary/non-monetary support linked to the purchase of goods/services that are VAT-exempt, non-declarable, or subject to 0% VAT under VAT laws; -Contract violation penalties and other compensations |
- |
0,5% |
|
| 2 | Services and construction without materials | ||
|
- Accommodation services, including: Providing short-term accommodation facilities for tourists and other transient guests; Providing long-term accommodation facilities (excluding apartments) for students, workers and similar groups; Providing accommodation facilities combined with food services or entertainment amenities; - Freight handling and other transport-related support services, such as terminal operations, ticketing, and vehicle parking management; -Data processing services, information portal rental, IT and telecommunications equipment rental; advertising on digital content products and services; - Office support services and other business support services; - Personal care and recreational services, such as sauna, massage, karaoke, nightclub, billiards, internet access, and gaming; - Tailoring and laundry services, as well as haircutting, hairdressing, and shampooing services; - Other repair services, including the repair of computers and household appliances. - Construction consultancy, design and supervision services; - Other services subject to VAT deduction method with 10% VAT rate; - Construction and installation services without material procurement, including the installation of machinery and industrial equipment. |
5% | 2% | |
|
- Service activities exempt from VAT, not subject to VAT declaration, or qualifying for 0% VAT rate under VAT laws; -Business cooperation activities with organizations in this sector where the cooperating organization is responsible for VAT declaration on all revenue generated from the cooperative business activity as regulated; - Contract breach compensations and other indemnity payments. |
- |
2% |
|
|
- Leasing of assets, including: + Leasing of houses, land, shops, factories, and warehouses (excluding accommodation services); + Leasing of means of transportation and machinery/equipment without accompanying operators;+ Leasing of other assets not accompanied by additional services. |
5% |
5% |
|
|
- Acting as a lottery agent, insurance agent, or engaging in multi-level marketing activities; - Compensation for breach of contract and other types of compensatory payments. |
- |
5% |
|
| 3 | Production, transport, services with goods; construction with materials | ||
|
- Manufacturing, processing, and fabrication of goods; - Exploitation and processing of minerals; - Transportation of goods and passengers; - Ancillary services accompanying the sale of goods, such as training, maintenance, and technology transfer, are bundled with product sales; - Food and beverage services; - Repair and maintenance services for machinery, equipment, and vehicles, including automobiles, motorcycles, and other motorized vehicles; - Construction and installation services inclusive of materials, including installation of industrial machinery and equipment; - Other activities are subject to VAT under the credit method, applying the standard VAT rate of 10%. |
3% |
1,5% |
|
|
- Activities that are not subject to VAT, exempt from VAT declaration, or eligible for the 0% VAT rate in accordance with the provisions of VAT law; - Business cooperation activities with an organization in this industry group where the organization is responsible for declaring VAT on the entire revenue arising from the cooperative business activities, as prescribed by law. |
- |
1,5% |
|
| 4 | Other business activities: | ||
| Production of goods subject to VAT under the credit method, applying a 5% VAT rate; | 2% | 1% | |
| Provision of services subject to VAT under the credit method, applying a 5% VAT rate; | |||
| Other activities not listed under Groups 1, 2, or 3 above. |
Note:
Tax Calculation Principles for Business Households and Individual Entrepreneurs:
According to Circular No. 40/2021/TT-BTC, business households and individual entrepreneurs with annual revenue of VND 100 million or less are not required to pay VAT or PIT.
If annual revenue exceeds VND 100 million, the individual must declare and pay taxes according to the applicable percentage rates. Tax declarations must be accurate, truthful, complete, and submitted on time, and the taxpayer is legally responsible for the accuracy of the declared information.
In cases where business activities are conducted by a group of individuals or a household, the VND 100 million revenue threshold for tax exemption is determined based on the revenue of the sole designated representative of that group within the tax year.
Full regulations can be found in Circular No. 40/2021/TT-BTC dated June 1,2021.
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