Major changes are coming to tax administration for individuals and business households in Vietnam, allowing them to self-declare annual revenue for tax purposes. This new provision, part of the amended Law on Tax Administration passed by the National Assembly on 10/12/2024, requires them to report their actual revenue to authorities. This is particularly relevant if their revenue falls below the taxable threshold of 500 million VND per year.

A key aspect of the new law is the mandatory use of e-invoices and enhanced technological integration. Business households using e-invoices generated from cash registers connected to the tax authorities' data system will benefit from automated declarations and calculations of VAT and personal income tax. For other taxes and levies, they must self-determine the amount payable.

The law also clarifies tax responsibilities for online sales, distinguishing between platforms with and without payment functions. Owners of online platforms with payment and ordering functions are responsible for withholding, declaring, and paying taxes on behalf of business households and individuals. If e-commerce platforms do not have online payment or ordering functions (such as Zalo, TikTok, Facebook), individual businesses must self-declare, calculate, and pay their taxes directly.

The Government is actively preparing for these changes by developing detailed regulations and upgrading its technological infrastructure. In its explanatory and acceptance report, the Government stated its commitment to having detailed tax management regulations for business households and individuals ready by early 2026. Tax authorities are also establishing procedures and upgrading information technology systems to meet the evolving requirements of tax administration.

Delegates at the National Assembly hall on the morning of 10/12/2024. *Photo: Media Quoc hoi*

To support the implementation of these reforms and enhance efficiency, the law introduces new provisions for tax officials and ensures adequate resources for the tax sector. Tax officials will operate under a regime based on their positions, standards, salaries, and other benefits, aimed at encouraging greater work responsibility. The State will guarantee resources for the tax sector, including prioritizing budget allocation for building and operating information technology systems, digital transformation in tax administration, and physical infrastructure. The National Assembly assigns the Government to detail these regulations. Previously, the Ministry of Finance proposed two options for a support regime for tax officials in the draft law. One option suggested that tax administration officials would receive monthly support equal to 100% of their current basic salary (excluding allowances). This support would be paid alongside regular salaries, would not affect social insurance, and would be exempt from personal income tax and other financial obligations to the State.

The amended Law on Tax Administration will take effect from 1/7/2026. However, specific provisions concerning tax declaration, calculation, and the mandatory use of e-invoices by individuals and business households will be effective earlier, from 1/1/2026.

By Anh Tu - Phuong Dung