Starting from June 1, individuals and household businesses with annual revenues of VND1 billion (US$38,399) or more in certain sectors are required to use e-invoices generated from cash registers, as mandated by Government Decree No. 70/2025/ND-CP on invoices and documents.
This serves as a springboard for the complete elimination of the lump-sum tax system which is effective from January 1, 2026.
SGGP Newspaper's reporter had an interview with Chairwoman Nguyen Thi Cuc of Vietnam Tax Consultants' Association about the significance of the above tax policy reforms.
The chairwoman said that the implementation of e-invoices from cash registers not only helps tax authorities closely monitor revenue and prevent tax fraud, but also lays the foundation for fully abolishing the flat tax method from January 1, 2026, in line with the Politburo’s Resolution No. 68-NQ/TW on private sector development. From that day, household businesses will shift to declaring taxes based on actual, transparent, and lawful revenues.
This regulation serves as a preparatory step for larger household businesses to gradually adapt to the new management approach—transparent revenue reporting like formal enterprises—while also enabling tax authorities to collect more accurate revenue data from the household business sector.
Individuals and household businesses will declare and pay taxes based on their actual revenues. For example, for food and beverage businesses, the tax rate is 4.5 percent of revenue comprising 3 percent value-added tax and 1.5 percent personal income tax. For wholesale and retail businesses, the rate is 1.5 percent of revenue including 1 percent value-added tax and 0.5 percent personal income tax. Thus, the tax policy from June 1 onward remains consistent with previous years, with no changes.
Recently, some household businesses have stopped accepting bank transfers or recorded incorrect transfer descriptions; in some cases, customers are charged extra when paying via bank transfer, and these amounts are added to the taxable revenue. According to Chairwoman Nguyen Thi Cuc of the Vietnam Tax Consultants’ Association, such actions are considered tax evasion. Therefore, if an individual shows signs of evading tax obligations or causing significant revenue loss, they could face criminal prosecution. It's crucial for household and individual businesses to pay close attention and comply with tax policies to avoid legal violations.
While many stores and mini-supermarkets already have cash registers to issue e-invoices, small businesses and vendors in traditional markets face significant challenges. These include connecting printing devices and the complex process of declaring documents and ledgers.
Ms. Cuc stated that implementing e-invoices directly from cash registers will not only help tax authorities closely monitor revenue and prevent tax evasion, but also pave the way for the complete elimination of the lump-sum tax system starting January 1, 2026 as per Resolution 68-NQ/TW. This shift will require business households to declare taxes based on actual, transparent, and legally compliant revenue.
In early June, many business households were confused and unsure how to comply with the newly applied policy. While some tried to avoid it, the majority were willing to comply. Therefore, during these initial days, tax authorities should focus on reminders and guidance rather than penalties for households facing difficulties.
Some households also worry about potential retroactive tax collection if their invoiced revenue suddenly increases. Ms. Cuc suggested that tax authorities need to research more flexible and suitable solutions. For households transitioning from lump-sum tax to declaration-based tax, if their revenue changes, tax authorities should consider not collecting retroactive taxes. This would encourage businesses to voluntarily declare their income fully in subsequent periods.
Additionally, tax authorities should enhance coordination with e-invoice solution providers to support equipment and software, reducing connection costs for business households. They should also send officials to local areas to provide direct guidance on how to use the system.
Vietnam’s tax policy system is increasingly being refined based on principles of fairness, transparency, and consistency. Alongside this, the tax policy system has contributed to improving the investment environment, encouraging production and business development, fostering sustainable revenue growth for the state budget, while ensuring tariff reductions in line with commitments and proactively integrating into regional and international economic frameworks.
In addition to institutional policy improvements, tax management mechanisms have been progressively modernized to be more effective and efficient, leveraging a connected and shared national tax database system. The tax authority has adopted risk-based management approaches, implemented electronic tax declarations and payments, introduced electronic invoices, and accelerated tax administrative reforms, including piloting AI-powered tax consultation tools to meet the demands of the digital economy and global e-commerce trends.
These changes hold significant importance. For instance, in the past, most small-scale business households and individuals relied on simple manual record-keeping, making the flat tax regime suitable for the early stages of a market economy when most businesses operated on a small scale. The elimination of the presumptive tax regime has also created momentum for businesses to innovate and grow, aligning with the goal of reaching 2 million enterprises by 2030, as outlined in Resolution 68-NQ/TW. This timeline has been shortened by six months compared to the original plan.
