PIT for Software Development Sole Proprietors under Decree 68/2026/ND-CP: 2% Revenue Rate or Group Tax Schedule?
RegHub explainer by New MarketerLast updated:
Based on:Thông tư 40/2021/TT-BTC; Nghị định 68/2026/NĐ-CP - Ministry of Finance
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
The Ministry of Finance clarified PIT obligations for sole proprietor households (HKD) in software programming (industry code 6201) classified under Group 3 of Decree 68/2026/ND-CP. Under Circular 40/2021/TT-BTC, software programming and application publishing activities are classified as IT services, with PIT calculated at a 2% rate on revenue. Decree 68/2026/ND-CP on household business management does not change how Group 3 household businesses calculate PIT - they continue to pay PIT at the percentage-of-revenue rate under Circular 40/2021/TT-BTC. For software programming activities, the 2% rate still applies. Taxable income is calculated as revenue multiplied by 2%, then subjected to the progressive tax schedule (17% rate on the corresponding income bracket). The Ministry of Finance acknowledged the unique characteristics of the software sector (no physical input invoices, intellectual product nature) and requested the household business report specific business circumstances to the Provincial Tax Department for further guidance.
Ministry of Finance Guidance on PIT for Software Programming Sole Proprietors
Scenario
A household business (HKD) specializing in computer programming and app publishing on App Store (industry code 6201), classified as Group 3 under Decree 68/2026/ND-CP. The HKD has no physical input invoices and questions whether PIT is calculated at the 2% revenue rate (Circular 40/2021/TT-BTC) or under a group tax schedule.
Legal Basis
- Circular 40/2021/TT-BTC: Tax guidance for household businesses and individual traders
- Decree 68/2026/ND-CP: Household business management (Group 1, 2, 3 classification)
Ministry of Finance Guidance
On PIT rate: Under Circular 40/2021/TT-BTC, software programming and IT activities are classified as services, subject to a 2% rate on revenue. Decree 68/2026/ND-CP does not change this rule.
On taxable income calculation:
- Taxable income = Revenue x 2%
- PIT payable = Taxable income x Tax rate (progressive schedule)
- Applicable tax rate: 17% on the corresponding income bracket
On sector characteristics: The Ministry acknowledges software is an intellectual product with no physical input invoices. However, current regulations still apply the 2% revenue rate.
Recommendation
The household business should report its specific business circumstances to the Da Nang Provincial Tax Department for further guidance on correct application of regulations.