Vietnam tax authorities clarify VAT exemptions for business households

The Hanoi Tax Department has provided guidance regarding Value Added Tax (VAT) policies for business households with annual revenues below 1 billion VND.

Under Decree No. 141/2026/ND-CP, which amends Decree No. 68/2026/ND-CP, the threshold for business households and individuals to be exempt from VAT has been increased from 500 million VND to 1 billion VND per year.

Consequently, households with annual revenues of 1 billion VND or less are classified as non-taxable entities for VAT. This clarification addresses whether the 20% VAT reduction policy, established under Resolution No. 204/2025/QH15, applies to these households. Since they fall under the non-taxable category, the specific VAT reduction mechanisms for taxable goods do not apply to their primary tax obligations.