Updated: October 2026
Download the full text of Official Letter No. 7639/CT-QLNT dated 14 October 2026 of the Tax Department here (PDF, Vietnamese; the petitioner’s personal details have been redacted).
From 2026, most Vietnamese household businesses still calculate personal income tax (PIT) the simple way: revenue of VND 1 billion or less is exempt, and revenue above VND 1 billion up to VND 3 billion is taxed by default as a percentage of revenue. Only households with revenue above VND 3 billion must account for revenue less expenses like a company, and that very rule is now under review by the Ministry of Finance.
Replying to a public petition (reference PAKN.20261005.0559) submitted through the National Public Service Portal, the Tax Department issued Official Letter No. 7639/CT-QLNT on 14 October 2026. The letter confirms the current rule and also signals that the rule may be amended.
At a glance
| Annual revenue | PIT calculation method |
|---|---|
| VND 1 billion or less | No PIT payable |
| Over VND 1 billion up to VND 3 billion | By default, a percentage of revenue, with no expense tracking required. The household may voluntarily opt for taxable income multiplied by the tax rate; if it does, it must keep that method for 2 consecutive years |
| Over VND 3 billion | Must use taxable income multiplied by the tax rate, with no choice; the method is kept for 2 consecutive years from the first year of application |
1. The petition and the Tax Department’s reply
The petitioner proposed two options:
- Preferred option: apply the percentage-of-revenue method uniformly to all household businesses, including e-commerce households.
- Transition option: if the revenue-less-expenses method is retained, defer its official application to 2027 and treat 2026 as a preparation year.
The Tax Department replied on three points:
- Under Article 7.2 of PIT Law No. 109/2025/QH15 and Article 10.2 of Decree No. 68/2026/ND-CP (as amended by Article 1.1 of Decree No. 141/2026/ND-CP), a household business with annual revenue above VND 3 billion must calculate tax as taxable income multiplied by the tax rate.
- The Ministry of Finance is currently reporting to the competent authority to consider amending this rule.
- Until the law is amended, taxpayers should comply with the current rules.
In other words, the petition has been noted and is with the drafting authority, but no change has taken effect. Households above the VND 3 billion threshold must still follow the current rule.
2. Why the VND 3 billion threshold matters
The difference between the two methods lies less in the amount of tax than in the accounting workload.
The percentage-of-revenue method needs a single input: total revenue. No expense tracking, no input invoices, no detailed books.
The taxable income × tax rate method requires revenue less expenses. That means lawful invoices and supporting documents for every expense, proper bookkeeping, and the ability to substantiate expenses during a tax audit. In substance, it is close to the regime for companies.
That is why the petition asked for a delay: for many households this is not a change in tax rates but a change in operational capability.
3. The VND 1 billion threshold changed in 2026
This is the point most often misquoted, because many online sources still cite the old figure.
Decree No. 68/2026/ND-CP, issued on 5 March 2026, originally used a threshold of VND 500 million. Less than two months later, Article 1.1 of Decree No. 141/2026/ND-CP dated 29 April 2026 replaced “VND 500 million” with “VND 1 billion” throughout Decree 68: Articles 3 and 4, Article 8.1, Article 9, Article 10, Article 11.3, Articles 12.1 and 12.2, Article 17.4 and Article 18.3.
Two consequences:
- The PIT-exempt threshold is now VND 1 billion, not VND 500 million.
- Article 10, the very provision cited in Official Letter 7639/CT-QLNT, is among the amended provisions. Citations should therefore state “as amended by Article 1.1 of Decree No. 141/2026/ND-CP”, as the letter itself does.
Important: Decree No. 141/2026/ND-CP only replaces VND 500 million with VND 1 billion. It does not touch the VND 3 billion threshold, which remains unchanged.
4. E-invoices: an obligation tied to the VND 1 billion threshold
Article 1.2 of Decree No. 141/2026/ND-CP amends Article 8.5 of Decree No. 68/2026/ND-CP on e-invoices:
- Annual revenue above VND 1 billion: must use e-invoices bearing the tax authority’s code, or e-invoices generated from cash registers connected to the tax authority.
- Annual revenue of VND 1 billion or less: may register to use them if eligible and needed.
- New households, or households whose prior-year revenue did not exceed VND 1 billion but whose revenue exceeds it during the tax year: must use e-invoices and register within 30 days from the last day of the tax period in which cumulative revenue exceeds VND 1 billion.
This 30-day deadline is easy to miss, because it is triggered by cumulative revenue crossing the threshold rather than by the regular filing calendar.
A household with multiple locations uses the household’s tax code for all stores and must show the business location code on each invoice.
5. Worked examples
Example 1: Household in the choice band
Household A has 2026 revenue of VND 2.4 billion.
→ It falls in the over VND 1 billion to VND 3 billion band, so by default it pays PIT as a percentage of revenue, with no need to track expenses. If Household A voluntarily opts for taxable income multiplied by the tax rate (for example because its actual costs are high and margins thin), it must keep that method for 2 consecutive years from the first year of application.
Example 2: Household above VND 3 billion
Household B has annual revenue of VND 3.8 billion.
→ It must calculate PIT as taxable income multiplied by the tax rate under Article 10.2 of Decree No. 68/2026/ND-CP, even if the percentage method would be more convenient. This is exactly the situation confirmed by Official Letter 7639/CT-QLNT.
Household B needs a revenue recording system, input invoices and documents for expenses, and books sufficient to substantiate them in an audit.
Timing of the switch: if Household B has been using the percentage-of-revenue method (because it expected revenue of no more than VND 3 billion) and only determines at year-end that actual revenue exceeded VND 3 billion, it must switch to taxable income × tax rate from the following year (Article 4.5(d) of Decree No. 68/2026/ND-CP, as amended by Decree No. 141/2026/ND-CP). The current year stays on the percentage method.
Example 3: Crossing VND 1 billion mid-year
Household C had 2025 revenue of VND 800 million. In 2026, cumulative revenue reaches VND 1.1 billion by the Q2 tax period.
→ Household C must adopt coded e-invoices or cash-register e-invoices and register within 30 days from the last day of the tax period in which cumulative revenue exceeded VND 1 billion.
6. What to watch: the rule may be amended
The most notable line in Official Letter 7639/CT-QLNT is not the confirmation of the current rule but this: the Ministry of Finance is reporting to the competent authority to consider amending the rule.
This signals that the calculation method for households above VND 3 billion is under review. However:
- The letter does not state what the amendment would be.
- The letter does not state when it would take effect.
- The letter is clear that, until the law changes, the current rules apply.
Households should not delay setting up proper books in the hope that the rule will be relaxed. If the amendment does not happen, or happens late, the risk falls on the taxpayer.
7. Context: household business tax policy is moving toward relief
Official Letter 7639/CT-QLNT sits within a series of changes pointing in the same direction: lighter tax and compliance burdens for small households, with bookkeeping requirements focused on larger ones.
- A much higher exemption threshold. According to the Ministry of Finance, the revenue threshold below which households pay no tax has been raised from VND 100 million to VND 1 billion a year, exempting about 2.5 million households (around 83.3% of all household businesses), at an estimated revenue cost of about VND 16,650 billion.
- A proposed 30% PIT reduction for 2026 and 2027. The National Assembly issued Resolution No. 43/2026/QH16 on 24 August 2026 on PIT and CIT reductions for the 2026 and 2027 tax years. The implementing draft decree (under public consultation) proposes a 30% reduction in PIT payable for household and individual businesses with annual revenue of no more than VND 10 billion, under either calculation method.
- A proposal to raise the exemption threshold to VND 3 billion has not been accepted. Replying to Ho Chi Minh City voters in July 2026, the Ministry of Finance said there was not yet a basis for the change, as the new policy only took effect in 2026 and needs time to be assessed.
- The calculation method for households above VND 3 billion is under review, as stated in Official Letter 7639/CT-QLNT.
For household businesses, the practical message is: below VND 3 billion, obligations are already fairly light; above VND 3 billion, set up proper books now under the current rules, while watching for the amending regulation and the 30% reduction decree once issued.
8. Practical steps for household businesses
- Determine annual revenue accurately to know which of the three bands applies. This drives every other obligation.
- If you are in the VND 1–3 billion band and approaching VND 3 billion, set up expense records in advance. If actual revenue exceeds VND 3 billion at year-end, you must switch to the income method from the following year; preparing early makes that much easier.
- If you are in the VND 1–3 billion band, think carefully before voluntarily switching to the income method: once chosen, it must be kept for 2 consecutive years.
- Track cumulative revenue each tax period so you do not miss the 30-day e-invoice registration deadline after crossing VND 1 billion.
- Keep invoices and expense documents as they arise, not at year-end.
- Monitor amending regulations on the method for households above VND 3 billion, while complying with the current rules until a new regulation is issued.
TrustlineAX helps businesses set up bookkeeping, monitor revenue thresholds and e-invoicing, and review tax obligations. Contact TrustlineAX for advice.
Disclaimer
This article is based on:
- Official Letter No. 7639/CT-QLNT dated 14 October 2026 of the Tax Department, replying to public petition PAKN.20261005.0559;
- Article 7.2 of PIT Law No. 109/2025/QH15 dated 10 December 2025 (as cited in the letter);
- Article 10.2 of Decree No. 68/2026/ND-CP dated 5 March 2026, as amended by Article 1.1 of Decree No. 141/2026/ND-CP dated 29 April 2026;
- Article 1 of Decree No. 141/2026/ND-CP dated 29 April 2026 (checked against the full text);
- Article 4.5(d) of Decree No. 68/2026/ND-CP (as amended by Decree No. 141/2026/ND-CP), as quoted in tax authority replies published by the Government Portal;
- Resolution No. 43/2026/QH16 dated 24 August 2026 of the National Assembly and the draft implementing decree on tax reductions (under consultation); the Ministry of Finance reply to Ho Chi Minh City voters on the revenue threshold (as reported in the press).
Six scope notes:
- This article is based on the full text of Official Letter 7639/CT-QLNT and of Decree No. 141/2026/ND-CP. The content of Decree No. 68/2026/ND-CP is summarised from secondary sources and has not been checked against the original.
- Specific tax rates for each household group are not stated in the letter and are outside the scope of this article. Refer directly to Article 7 of PIT Law No. 109/2025/QH15.
- How deductible expenses are determined for households using the taxable income × tax rate method is outside the scope of this article.
- The content of the proposed amendment being reported by the Ministry of Finance is not stated in the letter. This article does not speculate on its content or timing.
- Identifying information about the petitioner has been omitted from this article and redacted from the attached letter.
- The 30% PIT reduction is currently in a draft decree and may change when officially issued.
Official Letter 7639/CT-QLNT is a reply to an individual’s petition and is not a legal normative document.
This article is for reference only, does not replace the original legal texts and does not constitute advice on any specific case. Households and businesses should check the regulations in force at the time of application and consult an adviser before making decisions.
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