Vietnam considers tax reforms to encourage business conversion

Vietnamese household businesses are expressing hesitation to transition into formal small and medium-sized enterprises (SMEs) due to complex administrative procedures and compliance costs. Business owners report concerns regarding accounting regulations, tax filings, and the pressure of managing input-output invoices.

To address these barriers, a draft Law on Small and Medium Enterprise Development aims to simplify tax and accounting procedures. A key proposal includes raising the revenue threshold for choosing simplified tax calculation methods from 3 billion VND to 10 billion VND per year.

Additionally, business owners are awaiting official guidance on a 30% personal income tax reduction mandated by National Assembly Resolution 43. Some entrepreneurs are currently weighing whether to limit their annual revenue to stay below the 10 billion VND threshold to maintain eligibility for specific tax benefits and simplified calculation methods.