Guidance on the VND 500 Million PIT Exemption Threshold for Individual Businesses and PIT Calculation with Multiple Income Sources
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Based on:Thông tư số 109/2025/QH15 ngày 10/12/2025; Luật Thuế Thu nhập cá nhân sửa đổi - Ministry of Finance
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The Ho Chi Minh City Tax Department answered a query from an individual who earns salary income from company 52HZ Technology and Communication Co., Ltd. and expects rental income from a residential property in District 12, Ho Chi Minh City. The person asked: (1) the effective date of the VND 500 million annual exemption threshold; and (2) the PIT calculation method when multiple income sources exist. The tax authority's guidance: the VND 500 million/year revenue threshold exempting individual businesses from PIT and VAT is effective from the 2026 tax year, per the amended PIT Law passed by the National Assembly and detailed in Circular 109/2025/QH15 dated 10 December 2025. Where two income sources exist (salary and property rental): they are treated as separate income categories and taxed **independently**, not combined — salary is taxed under the progressive rate schedule; rental income is taxed at a flat percentage of revenue (presumptive method) or on actual profit.
HCMC Tax Department Guidance on the VND 500 Million Threshold and Multi-Source PIT Calculation
VND 500 Million Annual Revenue Threshold
- Effective: 2026 tax year
- Legal basis: Amended PIT Law (passed by the National Assembly); Circular 109/2025/QH15 dated 10 December 2025
- Individual businesses (property rental is a form of individual business activity) with annual revenue not exceeding VND 500 million are exempt from both PIT and VAT
- Effective from 2026 onwards; not applied retroactively to prior years
PIT Calculation with Multiple Income Sources
Salary income (source 1):
- Subject to PIT under the progressive tax schedule (7 tax brackets)
- Personal deductions and dependent deductions may be applied
Property rental income (source 2):
- Taxed separately, not combined with salary income
- PIT on rental income: 5% rate on taxable income (after allowable deductions)
- VAT: if rental revenue exceeds VND 500 million/year, 5% VAT applies
General Principles
- The two income categories are not aggregated when determining overall PIT liability
- Each income type is governed by its own rules (tax law, implementing circulars)
- The taxpayer is responsible for self-declaring and self-calculating tax correctly for each income source