Vietnam clarifies VAT and PIT rules for businesses operating under 12 months

Vietnam’s Ministry of Finance, via Circular 100/2021 TT‑BTC, amended guidance on value‑added tax (VAT) and personal income tax (PIT) for individual entrepreneurs and household businesses that start operations mid‑year. The Hanoi tax office explained that if a business operates for less than a full calendar year, it must pay VAT and PIT only when its annual revenue exceeds VND 100 million; businesses with revenue at or below that threshold are exempt from both taxes. The clarification addresses cases where local tax offices previously demanded tax payments despite low turnover, as illustrated by a taxpayer with VND 40 million revenue in 2025. Taxpayers are advised to refer to the amended Circular and consult their local tax authority for specific guidance.