What Should an E-commerce Household Business with Annual Revenue Exceeding VND 3 Billion Do?

1. Clarifying the Issue

A question that many e-commerce household businesses are currently concerned about is:

If an e-commerce household business has annual revenue exceeding VND 3 billion, can it still apply the 1.5% flat tax rate, and under what conditions (if any)?

At present, the legal framework does not provide clear or unified guidance for this specific case. In practice, tax authorities are managing and assessing tax obligations based on the operating model and payment methods of each business.

2. Case of E-commerce Platforms with Integrated Payment Functions

This applies to platforms such as Shopee, Lazada, TikTok Shop, etc.

• The platform withholds, declares, and pays VAT and personal income tax on behalf of the individual seller
• Taxes are calculated as a percentage of revenue
• If total annual revenue is below VND 200 million, the individual may be eligible for a refund of taxes already withheld and paid on their behalf

3. Case of E-commerce Platforms without Payment Functions

In this case:

• The individual must self-declare and pay taxes
• Tax declaration methods may include:
  • Per transaction
  • Monthly
  • Or quarterly

4. Determining the Tax Management Group

In practice, it is still possible to discuss with tax officers to continue declaring taxes under Group 2 in the following year (for example, 2026).

However, if annual revenue exceeds VND 3 billion, the household business may be reclassified into Group 3.

Important note:
This classification must be explicitly discussed and confirmed with the tax authority. It cannot be applied unilaterally by the taxpayer.

5. Practical Assessment from TOPA

According to TOPA’s assessment:

• E-commerce revenue is publicly traceable data
• Household businesses with revenues exceeding VND 3 billion in both 2024 and 2025 are highly likely to be required to declare and manage taxes under an enterprise-based approach

In such cases, conversion to an enterprise is no longer optional but mandatory.

6. Cases Where Short-term Optimization May Be Possible

Short-term optimization may be considered if:

• Only 2025 shows unusually high revenue
• Revenue in 2024 was low or business activities had not yet commenced

In such situations, it may be possible to negotiate maintaining Group 2 status in 2026.

However:

• This approach only helps optimize for 1–2 years
• It is not suitable for long-term business planning

7. Conclusion

For an e-commerce household business with annual revenue exceeding VND 3 billion, maintaining the household business model is only a short-term solution.

To ensure legal compliance, transparency, and long-term stability, it is necessary to seriously consider converting to an enterprise.You may refer to related articles on the conversion from household business to enterprise to gain a more comprehensive perspective.

How Will the 2026 Tax Law Impact Household Businesses on E-commerce Platforms?

What Should Household Businesses Prepare for When the Presumptive Tax Regime Is Removed?

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