HÀ NỘI — The Ministry of Finance has proposed household and individual businesses be required to declare all bank accounts used for production and business to tax authorities.

The aim of the proposal is to strengthen tax administration and improve cash flow transparency.

The proposal is raised in a draft decree on tax declaration, calculation, withholding, payment and the use of e-invoices for household and individual businesses which was recently made public for comment. The decree is expected to take effect from the beginning of 2026.

Under the current regulations, household businesses are only required to notify tax authorities of bank accounts used for electronic tax payments.

The draft also stipulated that household and individual businesses must fully and accurately declare revenues to determine tax liabilities, and are required to use and provide accounting records, invoices, sales management software and related documents upon request by tax authorities.

Under the draft decree, household and individual businesses with annual revenue of VNĐ500 million (US$19,000) or less would be exempt from personal income tax.

Those earning more than VNĐ500 million a year would be subject to personal income tax based on taxable income multiplied by applicable tax rates.

Taxable income would be calculated as total revenue from goods sold and services provided minus expenses related to production and business activities during the tax period.

The tax rates are proposed at 15 per cent for annual revenue from VNĐ500 million to VNĐ3 billion, 17 per cent for revenue from VNĐ3 billion to VNĐ50 billion, and 20 per cent for revenue exceeding VNĐ50 billion.

Household and individual businesses with annual revenue between VNĐ500 million and VNĐ3 billion would be allowed to choose between income-based taxation or a revenue-based method. The tax rates are proposed between 0.5 per cent and 5 per cent for different business sectors.

Income from real estate leasing, excluding accommodation services, would be taxed at a rate of 5 per cent on revenue exceeding VNĐ500 million.

The tax calculation method would remain fixed for two consecutive years.

This means that for household businesses with revenue from VNĐ3 billion for two consecutive years, who are subject to switch from revenue-based to income-based taxation, the switch would be required from the third year. — VNS