Vietnam proposes simplified tax methods for small businesses

Vietnam's Ministry of Finance is proposing legislative changes to simplify tax procedures for small businesses and individuals. Under a draft Law on Small and Medium Enterprise Development, the annual revenue threshold for applying a simplified tax method is expected to rise from 3 billion to 10 billion VND. This method allows taxpayers to calculate tax by multiplying revenue by a fixed rate, removing the need to declare or prove specific costs. This change could benefit approximately 99% of individuals and household businesses, as well as 81% of small and medium enterprises.

Simplified taxation would also streamline accounting requirements, potentially reducing the need for multiple accounting books to just one. For micro-scale single-person enterprises, the draft suggests minimal management requirements, such as not needing a company chairman or chief accountant.

Separately, the Ho Chi Minh City Tax Department has issued guidance to help taxpayers avoid risks. Taxpayers are advised to regularly monitor their tax obligations, including checking the completeness of tax filings, the accuracy of declared and paid amounts, outstanding debts, late payment interest, and any pending notices or decisions from tax authorities. The department noted that failure to comply with tax administration decisions can lead to eight types of enforcement measures, including freezing bank accounts, deducting wages, or suspending customs procedures.