Are individual and household businesses with annual revenue below 200 million VND not required to pay VAT in Vietnam from 2026?

Are individual and household businesses with annual revenue below 200 million VND not required to pay VAT in Vietnam?

On November 26, 2024, the National Assembly passed the Law on Value Added Tax, which will take effect from July 1, 2025, replacing the Value Added Tax Law 2008.

Based on Article 5 of the Law on Value Added Tax, the regulation on subjects not subject to value-added tax includes the following provision for individual households:

Non-taxable subject

…

25. Goods and services of households and individuals engaged in production and business with an annual revenue of 200 million VND or less; assets of organizations and individuals not engaged in business, not required to pay value-added tax upon sale; national reserves sold by national reserve agencies; fees and charges collected as per law on fees and charges.

Additionally, according to Article 18 of the Law on Value Added Tax, the provision on the effective date is as follows:

Effective date

1. This Law takes effect from July 1, 2025, except for the provision stipulated in clause 2 of this Article.

2. The provision regarding the revenue level for households and individuals engaged in production and business, which are non-taxable subjects as stipulated in clause 25, Article 5 of this Law and Article 17 of this Law, takes effect from January 1, 2026.

3. The Value Added Tax Law No. 13/2008/QH12, as amended and supplemented by Law No. 31/2013/QH13, Law No. 71/2014/QH13, and Law No. 106/2016/QH13, shall cease to have effect from the date this Law takes effect.

Thus, the regulation that individual and household businesses with annual revenue below 200 million VND are not required to pay VAT will officially be applied from January 1, 2026.

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Are individual and household businesses with annual revenue below 200 million VND not required to pay VAT in Vietnam from 2026? (Image from the Internet)

What conditions for representatives of household businesses to participate in the commune-level tax advisory council in Vietnam?

Based on the provisions of clause 2, Article 6 of Circular 80/2021/TT-BTC, representatives of business households and individual businesses participating in the commune-level tax advisory council must meet the following conditions:

- Comply well with state laws on production and business as well as tax laws;

- Have a minimum of 03 years of business experience up to the day before participating in the tax advisory council.

+ In cases where there are no business households or individual businesses with at least 03 years of operation in the locality, select the business household or individual business with the longest operation period.

+ Priority is given to those representatives who are team leaders, deputy leaders, heads, or deputy heads of business production sectors in the commune, ward, commune-level town, market, or commercial center.

What responsibilities do representatives of household businesses have when participating in the commune-level tax advisory council in Vietnam?

The responsibilities of representatives of business households and individuals participating in the commune-level tax advisory council are stipulated in clause 3, Article 11 of Circular 80/2021/TT-BTC as follows:

Responsibilities of the tax advisory council

1. Tax consulting and tax management responsibilities

a) Consulting on projected stable annual revenue and fixed tax for business households and individuals paying taxes by the fixed method, including business households and individuals with revenue levels not subject to VAT and personal income tax;

b) Consulting on tax adjustments for business households and individuals paying taxes by the fixed method when there are changes in business activities such as changes in scale, location; changes in business lines; temporary business cessation or suspension within the tax year;

c) Cooperating with the Tax Department to urge and manage the activities of business households and individuals paying taxes by the fixed method in the locality.

2. Responsibilities of the Chairman of the tax advisory council

a) Make decisions on the work program and plans of the tax advisory council;

b) Invite representatives, convene members, and preside over meetings of the tax advisory council;

c) Assign tax advisory council members to monitor specific tasks;

d) Make decisions and bear overall responsibility for the activities of the tax advisory council and its members in carrying out their assignments according to regulations;

đ) Report in writing to the Chairman of the district-level People's Committee and the Chief of the Tax Department in cases where an individual or other members cannot continue to participate in the tax advisory council;

e) Sign documents and communication materials on behalf of the tax advisory council.

3. Responsibilities of the tax advisory council members

a) General responsibilities of tax advisory council members

a.1) Carry out tasks as assigned by the Chairman of the tax advisory council and bear responsibility to the Chairman of the tax advisory council for the results of the assigned tasks;

a.2) Arrange to participate fully in the activities of the tax advisory council;

a.3) Present opinions at the meeting or in writing;

a.4) Report in writing to the Chairman of the tax advisory council in cases where they cannot continue participating in the tax advisory council.

b) Responsibilities of the permanent member of the tax advisory council

b.1) Propose the work program and plan of the tax advisory council and propose assignment of tasks for members for consideration and decision by the Chairman of the tax advisory council;

b.2) Prepare materials, record minutes, and summarize contributions from tax advisory council members during meetings;

b.3) Report to the Chairman of the tax advisory council and the Chief of the Tax Department in cases where changes or additions to the tax advisory council members are necessary.

4. The tax advisory council is responsible for sending tax consultation results to the district-level People's Committee and the commune-level People's Committee simultaneously with sending results to the Tax Department.

Thus, representatives of business households and individuals participating in the commune-level tax advisory council have the following responsibilities:

- Implement tasks as assigned by the Chairman of the tax advisory council and bear responsibility to the Chairman of the tax advisory council for the results of assigned tasks;

- Arrange to participate fully in the activities of the tax advisory council;

- Present opinions at meetings or in writing;

- Report in writing to the Chairman of the tax advisory council in cases where they cannot continue participating in the tax advisory council.