Over the years, Sole proprietorship in Vietnam are familiar with the “lump sum” tax – a simple, convenient but controversial method. Instead of declaring detailed income, they only need to pay tax at a fixed rate, based on estimated revenue determined by the tax authority. Although it helps reduce the burden of procedures, lump sum tax becomes a major barrier to transparency and fairness in the tax system.
Now, with Resolution 68-NQ/TW and the new reform roadmap from 2025 to 2028, Vietnam officially begins abolish business household tax, gradually transitioning to a real tax declaration mechanism. The goal is to bring business households into the modern management orbit like enterprises - with accounting books, electronic invoices and periodic tax declaration obligations.
So the matter abolish business household tax How will this affect the corner grocery store, the small street food stalls, or even the households that are developing online businesses? This article will comprehensively analyze the impact of the new policy, explaining roadmap to abolish business household tax, and provide Instructions for declaring business household tax when eliminating lump-sum tax – a journey that cannot be avoided, but is completely adaptable.
What is lump-sum tax? Why should it be abolished under the new regulations on business household tax?
Individual business households in Vietnam have long used this method. lump sum tax – that is, paying a fixed tax rate based on estimated revenue determined by the tax authority, instead of declaring detailed tax on each specific income item. According to current regulations, lump-sum tax applies to business households that do not keep complete books, invoices and documents.
The advantage of lump-sum tax is that the procedure is simple, helping small businesses stabilize their tax obligations without having to declare in detail; however, in reality, this method causes unfairness and lack of transparency in tax management.
Specifically, the contract method also reveals many disadvantages:
- Discouraging transparency in revenue declaration, which may cause businesses to declare lower than actual revenue to reduce taxes.
- Making it difficult for tax authorities to manage and monitor actual revenue, leading to the risk of losing state budget revenue.
- Creating unfairness among business households, when households with high revenue can still pay less tax than other households with low revenue but are subject to higher fixed rates.
Faced with this situation, The Politburo issued Resolution 68-NQ/TW dated May 4, 2025., clear requirements on Eliminate lump-sum tax for business households by 2026 at the latestThis is considered a major turning point in tax management, with the goal of building a more fair, transparent and modern tax system.
According to the data of the Tax Department (Ministry of Finance) as of the end of March 2025, there were up to 1,975,373 households and business individuals paying taxes in the form of lump sums, while only 6,142 households made detailed declarations. To prepare for the Eliminate lump-sum tax for business households by 2026 at the latestThe tax industry is deploying a map of business households, adding tens of thousands of households to the list of households for declaration management.
In the context of promoting digitalization and administrative reform, the gap between business households and small enterprises is increasingly narrowing. Eliminate lump-sum tax for business households by 2026 at the latest Not only is it a requirement to comply with policies, but it is also an opportunity to promote individual households to gradually transform to a more systematic and transparent business model - thereby making it easier to access capital, expand the market and develop long-term.
see more Full text of Resolution No. 68-NQ/TW on private economic development from Government Newspaper
Roadmap to abolish lump-sum tax? What's different about the new regulations on business household tax?
In the context of many changes in the Law on Tax Administration, one of the issues of particular concern is the roadmap to eliminate lump-sum tax for business households and changes in tax regulations applicable to this subject. The transition to new tax declaration and payment methods promises to bring more transparency in business activities and tax obligations of business households.
Roadmap to abolish lump-sum tax on business households 2025–2028
According to Resolution 68-NQ/TW:
- Phase 2025: Start applying electronic invoices for businesses with large revenue (from 1 billion VND/year).
- Year 2026: Official abolish lump sum tax Business households. Raising the threshold of revenue not subject to VAT.
- Phase 2027-2028: Continue to expand the use of electronic invoices to businesses with lower revenue, moving towards all businesses subject to VAT.
The tax authority will provide technology platforms, free accounting software and increase training to support business households in properly implementing the regulations. roadmap to abolish lump sum tax.
The aim of this roadmap is to bring all business households into a more modern, transparent and fair tax management framework, similar to enterprises, with self-declaration, self-payment of taxes and the use of electronic invoices and documents. Tax authorities will also have support and guidance measures to help business households adapt to this change.
New regulations on business household tax: What's different from before?
1. Apply declaration system instead of lump-sum tax
Abolish lump-sum tax: self-declaration and self-payment of tax. All individual business households will switch to tax declaration by the method normal tax return
Business households must pay taxes based on:
- Actual Revenue
- Profit after expenses
- Current VAT and PIT rates'
- Requires keeping complete books, invoices and documents.
Especially for Households with revenue of 1 billion VND/year or more, must declare taxes according to the declaration method and apply a simple accounting regime like micro-enterprises (according to Circular 88/2021/TT-BTC). In other words, large business households will have to follow the basic accounting regime to fully record purchase and sale information.
This is a pivotal change in new regulations on business tax, requiring transparency in books and accurate declarations.
2. Declare according to the roadmap - Request to apply electronic invoices connected to cash registers in each phase
The threshold for applying e-invoices will be gradually implemented to reduce the burden on micro-businesses. Specifically, from 2027 to 2028, the revenue threshold subject to e-invoices will be gradually reduced to VND800 million/year. During this period, businesses below the above threshold can still follow a simple bookkeeping method to track finances, and only need to issue invoices for large transactions.
According to Decree 70/2025/ND-CP:
- From 1/6/2025: Business households with revenue of 1 billion VND/year or more forced to use Electronic invoices generated from cash registers with direct connection to tax authorities.
- From 1/1/2027: Start doing the same with households with revenue of 800 million VND/year or more
- From 1/1/2028: All business households with revenue subject to VAT must use electronic invoices.
Households with lower revenue (under 200 million VND currently) are still being considered by the Government to adjust the threshold to suit the new situation.
Impact of abolishing lump-sum tax on business households: Opportunity or challenge?
The policy of eliminating lump-sum tax on business households is not only a technical change in tax administration, but also creates major changes in the behavior and operational structure of each related group. From small businesses, accountants and tax professionals, to small and medium-sized enterprises, all must adapt to a more transparent game. Below is a specific analysis of the impacts for each group.
1. Small business
Job abolish business household tax directly impact small businesses, grocery stores, restaurants and retail stores. They are forced to change their management methods and comply with new requirements on tax declaration, use of electronic invoices and bookkeeping.
Challenge:
- Must issue electronic invoices when selling goods, keep clear documents. Failure to issue invoices can result in a fine of up to 10 million VND.
- Time pressure to get used to and adapt to the new system.
- Incurring equipment investment costs: cash register, smartphone, invoice software, internet.
- Increased requirement for accounting knowledge, software skills, or hiring a separate accountant.
- Increased administrative procedures and tax management time compared to before.
Opportunity:
- Clear and transparent output invoices, easily proving actual revenue.
- Opportunity to access official bank loans due to full transaction history and documents.
- Create the premise for business development in a more formal and sustainable way.
- Paving the way for expansion and upgrading of household businesses to formal enterprises in the future.
2. Accountants and tax professionals
Job abolish lump sum tax Business households open up many opportunities for accountants, auditors and tax consultants as the need to support business households in transformation will increase.
Opportunity:
- The demand for consulting on bookkeeping, tax declaration and electronic invoice implementation has increased sharply.
- Expand the market for tax and accounting consulting services for small and micro enterprises (including converted business households).
- Opportunity to improve knowledge and skills on electronic invoice system and new accounting regime for business households.
- Access and use digital platforms and shared accounting software provided by the Government.
Request:
- Quickly update knowledge about electronic invoices, simple accounting regime, new penalty regulations.
- Have the ability to communicate and provide simple, easy-to-understand advice to people who are unfamiliar with technology.
3. Small and Medium Enterprises (SMEs)
Small and medium enterprises that have cooperative relationships with business households are also affected to some extent by the abolish business household tax.
Opportunity:
- Partner businesses issue electronic invoices and keep clear records, helping SMEs have complete documents to account for costs.
- Increase transparency in economic transactions between SMEs and business households.
- Contribute to building a fairer and healthier business environment.
Challenge:
- SMEs need to ensure transparency in transactions with business households to comply with new regulations.
- Additional work may be required to verify the validity of invoices from business households.
Instructions for declaring business household tax when lump-sum tax is abolished
When switching from lump-sum tax to declaration, business households will need to comply with new regulations on tax declaration procedures.
According to the guidance from the tax authorities, Tax return will include:
1. Tax declaration documents:
- Tax declaration form 01/CNKD (issued with Circular 40/2021/TT-BTC). This is the main declaration form to declare information on revenue, expenses and taxes payable.
- Appendix Business Activity List (Form No. 01-2/BK-HDKD) (issued with Circular No. 40/2021/TT-BTC). This appendix is often required for business households that have sufficient basis to determine revenue by each business sector and industry.
- Invoices and documents related to business activities: This is the basis for determining revenue, expenses and deductions (if any). Business households need to carefully store input invoices, output invoices and other documents such as receipts, payment vouchers, sales contracts, etc.
2. Place to submit tax declaration:
Business households submit tax declarations at Tax Branch or Tax Department directly managing where the business household registers its business location.
3. Deadline for submitting tax declaration and paying tax:
Monthly tax declaration:
- The deadline for submitting tax declarations is no later than 20th of next month month of tax liability.
- The latest deadline for tax payment is Final of the tax return filing deadline.
Quarterly tax declaration:
- The deadline for submitting tax declarations is no later than end of first month of next quarter Quarter in which tax liability arises. For example: for the first quarter tax period (January, February, March), the deadline is April 30 (if the last day of April is a holiday, the deadline is the next working day).
- The latest deadline for tax payment is Final of the tax return filing deadline.
Important Note: Business households need to determine the correct tax declaration period (monthly or quarterly) at the beginning of the year and notify the tax authority. Normally, large-scale business households will declare taxes monthly, while smaller business households can choose to declare taxes quarterly to reduce the frequency of declaration.
4. Tax declaration obligation when temporarily suspending business:
- According to the provisions of Article 4 of Decree No. 01/2021/ND-CP on business registration and related guiding documents (for example: Circular No. 86/2024/TT-BTC), when a business household temporarily suspends its business activities, it must notify in writing the tax authority directly managing it at least 01 working day before the date of temporary suspension of business.
- During the suspension of business full month or full quarter, business household no tax return required for that month or quarter.
- In case the business household only temporarily suspends business part of the month or part of the quarter (not a full month, not a full quarter), you still have to perform the normal tax declaration obligation for that entire month or quarter.
5. Determine revenue and expenses:
- Revenue: Total revenue from sales of goods and provision of services arising during the tax period, including surcharges and additional fees. Revenue is determined based on sales invoices, service provision invoices and related documents.
- Expense: Are actual expenses incurred in connection with business activities and have full legal invoices and documents. Deductible expenses when determining taxable income include raw material costs, labor costs, fixed asset depreciation costs, management costs, sales costs and other reasonable expenses.
6. Calculation of VAT and personal income tax:
- VAT: Business households declare VAT using the direct method on revenue or the deduction method (if meeting the conditions). Normally, small business households will apply the direct method on revenue at the rate of % for each business line.
- Personal Income Tax: Business households declare personal income tax at the rate of % on revenue or on taxable income (if there are complete accounting books). Similar to VAT, small business households often apply the method of direct calculation on revenue at the rate of % on each business line.
7. Pay taxes:
After determining the amount of tax payable, business households pay taxes to the state budget in the following forms:
- Pay directly to the tax office.
- Pay through commercial bank or credit institution.
- Submit via the electronic portal of the General Department of Taxation.
Advice for businesses:
- Study the new regulations carefully: Study Circular 40/2021/TT-BTC and related guiding documents to understand the regulations on tax declaration according to the new method.
- Prepare and store complete invoices and documents: This is an important basis for determining revenue, expenses and calculating taxes.
- Using support software: Consider using simple accounting software or sales management software that has built-in accounting functions to make tracking and filing taxes easier.
- Attend training courses: Tax authorities regularly organize training courses on new tax policies. Business households should proactively participate to receive specific instructions.
- Seek professional help: If you have difficulty in filing your taxes, do not hesitate to seek advice from tax experts or professional accounting services.
The transition to tax declaration requires businesses to be prepared and strictly comply with regulations. However, this is also an important step towards making business operations more transparent and sustainable.
Support from Bizzi Vietnam - a solution provider to help businesses digitize accounting and financial activities
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Bizzi’s main goal is to become a smart “assistant” for accountants in the digital transformation process, helping to simplify and reduce the workload they have to perform. With experience working with many big brands such as Grab, GS25, Circle K, Tiki, Guardian, Medicare and Pharmacity, Bizzi has proven its ability to provide effective solutions for businesses in financial and accounting management.
Acting as the foundation of modern financial management, Bizzi Vietnam Providing technology tools to help businesses and enterprises transition smoothly:
- Automatic processing of input invoices: Bizzi Bot is capable of Automatically upload, check and reconcile invoices in a snap, thanks to RPA (process automation) technology combined with AI. According to Bizzi, this tool helps reduce about 80% of processing time and 50% of data entry costs related to payable invoices. Bizzi Bot's accuracy is up to ~99%, operating 24/7, ensuring that incoming invoices are always recorded and carefully controlled. For businesses, this means that revenue and expense data is completely digitized, reducing manual errors and speeding up the tax declaration process.
- Automatic electronic invoice issuance (B-Invoice): Bizzi's electronic invoice service meets 100% of the operations as prescribed in Decree 123/2020 and Circular 78/2021. Business households can Create and manage electronic invoices anytime, anywhere on the Bizzi platform without the need for printing or hand-delivery. According to Bizzi, this helps Cost of printing and issuing invoices = 0, significantly saving related costs. Bizzi electronic invoices also integrate the logo and digital signature of the household, creating trust and easy document lookup when needed.
- Cost management: Bizzi offers a comprehensive expense management solution that digitizes the process of creating and approving payment requests and other purchase expenses in a transparent and efficient manner. Businesses can set up approval processes based on spending limits and expense types, and control expenses by department and project. Effective expense management will become especially important as businesses transition to tax filing, as they need to accurately track revenue and expenses to determine their tax liability correctly.
- Integration and compliance capabilities: The Bizzi platform can be integrated with POS (cash register) machines and sales management software, helping to automatically convert sales data into invoices on the system. At the same time, Bizzi is always updated according to new regulations of the tax authorities, helping businesses feel secure about the legal aspect. According to Bizzi Vietnam, their solution is designed to "fully meet the electronic invoice business" and has multi-layered security, ensuring that businesses comply with tax requirements.
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Thanks to the above features, Bizzi helps businesses significantly reduce the burden of manual accounting. From automatic invoice reconciliation to issuing electronic invoices, Bizzi allows business owners to focus on operations and sales without worrying about missing books and documents. In addition, Bizzi Vietnam often provides consulting and user guidance for new customers, helping businesses quickly get acquainted with the technology. In general, Bizzi greatly facilitates the transition process after abolishing the lump-sum tax on business households., helping to automate accounting, ensure regulatory compliance and optimize costs.
Conclude
The decision to abolish the lump-sum tax on business households is an important step for Vietnam to make taxes transparent and promote the development of the private economy. Although the new policy brings challenges for small traders – especially in terms of technology and procedures – it also provides an opportunity for them to modernize their management and integrate more deeply into the formal economy. On the management side, the provision of free digital platforms and training shows an effort to support the transformation.
To avoid being confused by change, businesses need to prepare early: Proactively equip electronic devices, apply accounting software and electronic invoices, or use solutions like Bizzi for automation. At the same time, they should take advantage of tax-accounting consulting services, attend training courses to master the new process.
Proactive in Update technology and accounting and tax knowledge will help business households reduce administrative burdens, avoid the risk of fines for violations and create a premise for sustainable development. Combined with policy support, this will be an opportunity for individual businesses to improve their competitiveness and move towards future business models.
In short, eliminating lump-sum tax on business households sets clear requirements for greater transparency and professionalism. Business households are encouraged to act immediately: plan for conversion, apply e-invoices, and can Consider using Bizzi or similar solutions to automate accounting. By doing so, they not only comply with new regulations but also improve financial management efficiency, ready for the new business phase.
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