Personal Income Tax Law Amendment 2025: What Should Household Businesses Pay Attention To?

Recently, TOPA has received a large number of inquiries from household businesses regarding the 2025 amended Personal Income Tax (PIT) Law, especially issues related to tax exemption thresholds, tax calculation based on revenue, and tax calculation based on profit.

To avoid misunderstandings or premature assumptions, this article summarizes and clarifies the content strictly based on the current draft legal documents, which are not yet official laws.

1. Which documents should be carefully reviewed?

To properly understand the nature of the issue, household businesses need to simultaneously refer to two key draft documents:

Draft Law on Personal Income Tax (Amended) 2025

(Reviewed and partially approved by the National Assembly):
https://thuvienphapluat.vn/phap-luat/ho-tro-phap-luat/toan-van-luat-thue-thu-nhap-ca-nhan-sua-doi-2025-duoc-ban-hanh-cham-nhat-vao-ngay-bao-nhieu-3953-245833.html

Second Draft on Tax Calculation Methods for Household Businesses from 2026

(Issued in detail by the Government):
https://thuvienphapluat.vn/hoi-dap-phap-luat/du-thao-lan-2-cho-cach-tinh-thue-moi-cho-ho-kinh-doanh-tu-nam-2026-theo-de-xuat-moi-nhat-chi-tiet-r-138073905.html

👉 These two documents are complementary and interlinked and must not be read separately.

2. Has the official law been issued yet?

No.

As of 15 December 2025, the full official amended Personal Income Tax Law has not yet been promulgated.
The National Assembly has only approved certain provisions of the draft.

According to published information, the full law is expected to be promulgated no later than 25 December 2025.

Reference source:
https://quochoi.vn/tintuc/Pages/tin-hoat-dong-cua-quoc-hoi.aspx?ItemID=97463

➡️ Therefore, all current analyses are predictive in nature, based on draft documents, and do not constitute final legal conclusions.

3. Will household businesses with revenue under 500 million VND be fully tax-exempt?

According to the Draft PIT Law updated on 09 December 2025:

Household businesses with annual revenue below 500 million VND
→ Expected to be exempt from Personal Income Tax (PIT).

At the same time, the draft tax policy for household businesses also proposes 100% exemption from Value-Added Tax (VAT) for this revenue group.

However, it is essential to clearly understand:

Household businesses are subject to two types of taxes simultaneously:

• Personal Income Tax (PIT)
• Value-Added Tax (VAT)

Currently, there is no new official VAT Law or specific Decree applicable to household businesses.

➡️ Therefore, it cannot yet be legally concluded that household businesses under 500 million VND revenue will be exempt from both PIT and VAT until official legal documents are issued.

In practice, tax policies often apply PIT exemption together with VAT exemption, so the probability of full tax exemption is very high (around 99%), but final confirmation still requires official legal documents.

4. Will household businesses with revenue over 3 billion VND definitely have to pay tax based on profit?

Important notice:

All content below is entirely based on draft documents and is not official law (as of 15 December 2025).

a. Provisions in the Draft PIT Law

In Chapter II – Tax bases for resident individuals,
Article 7. Personal Income Tax on income from business activities,
especially Clause 5, Article 7 states:

“The Government shall provide detailed regulations for the implementation of this Article.”

➡️ This means:
The National Assembly authorizes the Government to issue detailed regulations on tax calculation methods for household businesses and individual business operators.

b. Detailed regulations in the Government’s Second Draft

In Chapter II – Tax calculation methods and tax finalization,
Article 4 – Personal Income Tax, Clause 5 stipulates:

• The tax calculation method shall be applied consistently for 02 consecutive years from the first year of application.
• In cases where household businesses or individual business operators have annual revenue from over 500 million VND to 3 billion VND, and are currently taxed based on a percentage of revenue,
  if during two consecutive years:
  • the taxpayer self-declares, or
  • the tax authority has data confirming

that the actual revenue exceeds 3 billion VND,
→ then from the following year, they must switch to the tax calculation method based on taxable income (profit).

c. Key conclusion for household businesses

• The tax calculation method is maintained stably for 02 years.
• If a household business is recorded in Group 2 (500 million – 3 billion VND):
  • it continues to be taxed based on revenue,
  • it is not automatically converted to profit-based taxation.
• Only when the tax authority has clear evidence confirming actual revenue exceeding 3 billion VND for two consecutive years, will the business be mandatorily converted to profit-based taxation from the following year.

➡️ This aligns with TOPA’s previous professional guidance:
If there is no official evidence classifying the household business into Group 3, then at least in 2026, the business will retain the revenue-based tax calculation method.

Final Note

This article is intended to explain and clarify draft policy content only and does not replace official legal documents.

TOPA will continue to provide updates immediately after the official Law and Decrees are promulgated.

If you are a large-revenue household business, or are currently evaluating tax options and business models, you should closely monitor developments and conduct early assessments to proactively prepare for 2026 planning.