Knowledge base

Ho Chi Minh City Tax Department responds to a query about the scope of Official Letter No. 5680/CT-CS regarding PIT exemption for individuals performing professional services under science and technology contracts funded by the state budget. Under Personal Income Tax Law No. 109/2025/QH15 (effective 1 July 2026), wages and salaries from performing science, technology, and innovation tasks are exempt from PIT. From 2026 onward, taxpayers earning income from science and technology task contracts must comply with Article 4 of the new Law and related regulations.

Newly established business households (HKD) in 2026 with no prior-year revenue data are governed by Article 10 of Decree 68/2026/ND-CP. Once cumulative revenue exceeds VND 500 million, the HKD must file quarterly and may elect either the percentage-of-revenue method or the net-income method. The elected method is applied stably for the first two years of operation. For the specific situation described: If the HKD elects the percentage-of-revenue method from the start of 2026 and cumulative revenue at year-end exceeds VND 3 billion, the HKD retains that method for all of 2026 and continues it stably through 2027 (no mid-year switch to the net-income method is required). From 2028 onwards, the actual 2027 revenue determines which tax-method group applies under the applicable regulations.

Circular 18/2026/TT-BTC, issued by the Ministry of Finance on March 5, 2026, sets out detailed dossiers and procedures for tax administration of household businesses and individual business operators, covering revenue notification, tax declaration, tax payment, refund of overpaid tax, and business location notification. It implements Tax Administration Law No. 108/2025/QH15, VAT Law No. 48/2024/QH15 (as amended by Law No. 149/2025/QH15), Personal Income Tax Law No. 109/2025/QH15, and Decree No. 68/2026/ND-CP. The circular issues 14 new form templates, fully replacing the form system under Circular No. 40/2021/TT-BTC and Circular No. 100/2021/TT-BTC. Filing dossiers are organized by taxpayer group: household businesses with annual revenue of VND 500 million or less only need to notify revenue (Form 01/TKN-CNKD); those paying personal income tax under the tax-rate-times-taxable-revenue method use Form 01/CNKD; those paying under the taxable-income-times-tax-rate method must also file an annual finalization return, Form 02/CNKD-TNCN-QTT. Organizations that withhold or file/pay tax on behalf of individuals (such as insurers, lottery agents, multi-level sellers, or property lessees) have their own separate declaration forms. Key practical points for household businesses, individual operators, and tax agents: certain currently operating taxpayers must notify their bank account or e-wallet number on Form 01/BK-STK by April 20, 2026; new businesses must submit this together with their first revenue notification or tax return. The circular takes effect from its signing date (March 5, 2026) and includes a transitional rule allowing businesses that already declared under Circular 40/2021/TT-BTC to keep their existing filings without adjustment.

The Ho Chi Minh City Tax Department responded to a question about the bank account obligations of household businesses under Decree 68/2026/NĐ-CP and Circular 18/2026/TT-BTC. From 5 March 2026, household businesses and individual business operators must use payment accounts or e-wallet account numbers opened at an intermediary payment service provider in connection with their production and business activities — the account does not need to be in the name 'Household Business X'. Household businesses falling under clause 4, Article 17 of Decree 68/2026/NĐ-CP must notify the tax authority of their account/e-wallet details using Form 01/BK-STK under Circular 18/2026/TT-BTC. Taxpayers receiving international payments through PayPal or foreign contract manufacturing arrangements should self-assess their specific obligations against these instruments.

Ho Chi Minh City Tax Department confirmed that companies which had chosen to declare real estate rental tax on an annual basis (under Circular 40/2021/TT-BTC) but are now required to switch to per-payment-period declarations under Decree 68/2026/ND-CP must re-file for periods from the beginning of 2026. The Tax Department confirmed that the annual declaration must be replaced with supplementary/amended filings for each payment period (January, February), with the deadline for adjusted filings and payment set at 20 April 2026. Companies are advised to contact their direct tax management authority for case-specific guidance and to comply with the referenced legal documents.

The tax authority (An Giang Province Tax Sub-department 9) confirmed that household businesses (HKDs) that already filed Q1/2026 quarterly tax returns under the old threshold but now have annual revenue under VND 1 billion (qualifying as non-filing businesses under the new rules) do **not need to continue filing quarterly tax returns**. No procedure to cancel the filed return or amend it to show zero revenue is required — the tax authority does not demand this. Instead, HKDs need only submit a **Revenue Notification using Form 01/TKN-CNKD** by no later than 31 January 2027. This is important practical guidance for small household businesses following the government's increase of the tax-exempt revenue threshold to VND 1 billion per year, reducing administrative tax burdens for millions of household businesses.

The Ho Chi Minh City Tax Department guides a livestock feed manufacturer on its obligations to declare and pay PIT on behalf of individual/household businesses receiving monthly trade discounts tied to sales volumes. The flat-rate household tax regime was abolished from 2026. From the January 2026 tax period, the company can no longer use form 01/CNKD under Circular 40/2021/TT-BTC. Instead, the company must declare and pay tax on behalf of the individual under the provisions of Article 4 of Circular 10/2024/TT-BTC dated 10 February 2024 (effective 1 July 2025).

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.

Hanoi Tax Department responds to the question of whether Circular 111/2013/TT-BTC remains applicable after the 2025 Personal Income Tax Law takes effect from 01/01/2026. According to the tax authority's guidance, Circular 111/2013/TT-BTC and its amending documents continue to apply from 01/01/2026 (tax year 2026) for employment income of resident individuals, under the transitional provision in Article 29, Clause 2, of the 2025 PIT Law — until new implementing Decrees and Circulars are issued. Taxpayers and income-paying enterprises must continue to withhold, declare, and finalize PIT in accordance with Circular 111/2013/TT-BTC and existing documents while awaiting new detailed guidance from the Ministry of Finance.

A household business that buys buffalo or cattle from farmers, slaughters them, and sells fresh meat to restaurants and markets is trading at the commercial stage and must pay VAT by the direct method at 1% of revenue, plus personal income tax (PIT) at 0.5% of revenue. Fresh slaughtered meat is a "normally pre-processed" livestock product (slaughtering, deboning, skinning, mincing all count as normal pre-processing). When the self-producing farmer sells such products they are not subject to VAT, but when a household business buys and re-sells them at the commercial trading stage it must pay VAT of 1% on revenue. This is set out in Decree 359/2025/NĐ-CP (amending Decree 181/2025/NĐ-CP detailing the VAT Law), effective 1 January 2026, with the household-business presumptive rates of 1% VAT and 0.5% PIT for distribution/supply of goods under Circular 40/2021/TT-BTC. Exemption applies only if the household raises the animals itself and then slaughters and sells the meat: products from a household's own direct farming are exempt from VAT and PIT (income from direct agricultural/livestock production). Buying live animals from others for slaughter and resale does not qualify for this exemption.