Introduction: A “Revolution” in Tax Obligations – Closing the Era of Lump-Sum Taxation
On March 5, 2026, the Government officially issued Decree No. 68/2026/ND-CP (hereinafter referred to as Decree 68), detailing tax policies and tax administration for household businesses and individual business entities. This document takes effect immediately from the date of signing.
This is not merely a routine legal update. Decree 68 is regarded by experts as a historic “major overhaul,” marking the end of the traditional “lump-sum tax” era. Instead, a new legal framework has been established, requiring household businesses to integrate into the flow of digital transformation, conduct transparent declarations, and operate professionally like micro-enterprises.
If you own a retail store, a restaurant, sell online on e-commerce platforms, or represent a business that frequently transacts with household businesses, this regulation directly impacts your cash flow.
The most significant changes include:
- Officially increasing the tax exemption threshold to VND 500 million/year
- Completely changing the tax calculation method: for the first time allowing household businesses to calculate tax based on actual profit instead of applying a fixed percentage on revenue
- Mandatory establishment of 4 types of accounting books and application of e-invoices based on revenue thresholds
- Tightening control of cash flow through digital platforms and bank accounts
This article will provide an in-depth “decoding” of 8 core regulatory groups of Decree 68/2026/ND-CP to help you eliminate confusion, maximize tax benefits, and avoid strict penalties from state authorities.
What is Decree 68/2026/ND-CP and Who Does It Apply To?
What is Decree 68/2026/ND-CP?
Simply put, if Tax Laws (Law on VAT No. 48/2024/QH15, Law on Personal Income Tax No. 109/2025/QH15) are the framework, then Decree 68 serves as a detailed guideline on how to declare taxes, calculate taxes, manage accounting books, and issue invoices for the individual business sector in 2026.
Who is Subject to Decree 68?
This Decree affects the entire small and medium business ecosystem in Vietnam, including:
- Household businesses and individual business owners: regardless of whether you operate traditionally (grocery stores, workshops, rental housing, etc.) or on digital platforms (TikTok livestream selling, Shopee, Lazada, affiliate marketing, etc.)
- Enterprises and organizations: entities that engage in buying and selling goods and services with household businesses (directly related to obtaining valid input e-invoices for expense recognition)
- State management agencies: tax authorities at all levels will shift from “tax imposition” to “risk-based electronic data management”
Analysis of 8 Key Regulatory Groups under Decree 68/2026
Increasing the Tax Exemption Threshold to VND 500 Million (Article 3 & 4)
Previously, if your revenue exceeded VND 100 million/year (~8.3 million/month), you were required to pay taxes. Under Decree 68, the threshold for VAT and Personal Income Tax is increased to VND 500 million/year.
Practical implication:
If your total revenue is below VND 500 million/year (~41.6 million/month), you are completely exempt from VAT and PIT.
Important note:
“Tax exemption” does not mean “exemption from procedures.” Even if revenue is below 500 million, you must still submit declarations and notify expected revenue to the tax authority.
Abolishing the Lump-Sum Tax Method – Transition to Self-Declaration
This is a fundamental change. For decades, household businesses paid tax under the “lump-sum tax” system where tax officers estimated and imposed a fixed tax.
From 2026, this mechanism is officially abolished for large households. All household businesses must switch to self-declaration, self-calculation, and self-payment based on actual revenue. This increases autonomy but also shifts risk to the taxpayer.
Revolution in Tax Calculation Methods: Clear Differentiation by Revenue
Decree 68 allows tax calculation based on profit (Revenue – Expenses) instead of a fixed percentage on revenue.
Group 1: Revenue from VND 500 million to 3 billion/year
Choose 1 of 2 methods:
- Method 1 (Direct):
Tax = (Revenue – 500 million) × % rate - Method 2 (Income-based):
PIT = Taxable income × Tax rate
Where: Taxable income = Revenue – Valid expenses
Group 2: Revenue above VND 3 billion/year
➡️ MUST apply profit-based taxation
➡️ Not allowed to use percentage-based method
Expert Tip:
If your business has low profit margins, choosing profit-based taxation can significantly reduce tax. However, you must prove all expenses.
Mandatory Use of E-Invoices (Threshold: VND 1 Billion)
The Government is strictly controlling cash flow via e-invoices.
- Revenue < 500 million: Not required
- 500 million – <1 billion: Encouraged
- ≥1 billion: MUST use e-invoice software connected to tax authority
Tightening Deductible Expense Conditions & Non-Cash Transactions
Expenses above VND 5 million must be paid via bank transfer.
If paid in cash → NOT deductible → higher taxable income.
Mandatory Declaration of All Bank Accounts & E-Wallets
All accounts used for business must be registered with tax authorities.
➡️ Data will be automatically cross-checked
➡️ Any discrepancy may trigger tax audits
Requirement to Establish 4 Types of Accounting Books
For revenue above 500 million/year:
- Revenue ledger
- Expense ledger
- Tax obligation tracking
- Inventory records
Transitional Provision: Opportunity to “Clean” Data
Households switching from lump-sum to declaration:
- No tax arrears collection
- No penalties for previous discrepancies
Condition:
Submit inventory declaration as of 31/12/2025
Deadline: 20/04/2026
Comparison Table
| Criteria | Before 2026 | Under Decree 68 |
|---|---|---|
| Tax exemption | <100M/year | <500M/year |
| Tax mechanism | Lump-sum | Self-declared |
| PIT calculation | % revenue | Profit-based allowed |
| E-invoice | Loose control | Mandatory ≥1B |
| Expense condition | Flexible | ≥5M must transfer |
| Account declaration | Optional | Mandatory |
| Accounting books | Simple | 4 required |
Impact on Businesses
Household Businesses
Benefits:
- Fair taxation
- Lower tax for small businesses
Challenges:
- Must adopt accounting practices
- Higher compliance requirements
Enterprises
- Easier to obtain valid VAT invoices
- Better cost control
FAQs
Q1: Shopee seller with revenue 1.2B but profit 150M?
➡️ Choose profit-based taxation → lower tax
Q2: Rental income 35M/month (~420M/year)?
➡️ Tax exempt but must declare
Q3: No invoices for purchases?
➡️ Cannot deduct expenses
Q4: Deadline for inventory declaration?
➡️ 20/04/2026
Q5: Cannot manage accounting?
➡️ Can hire accounting services
Conclusion & Expert Advice
Decree 68 marks the end of informal business practices.
Digital transformation, transparency, and compliance are no longer optional—they are mandatory.
Do not wait until tax authorities impose penalties.
Act now to standardize your financial management system.
Asia Accounting – Accompanying Business Growth
Contact:
Asia Financial & Accounting Services Co., Ltd
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