Policy context

From January 1st, 2026, the tax policy for household businesses will undergo fundamental changes. According to Resolution No. 198/2025/QH15 of the National Assembly, the lump-sum tax method will cease to be applied, replaced by fulfilling tax obligations according to the law on tax administration.

Accordingly, household businesses and individual business owners no longer pay taxes at a fixed rate, but must declare, calculate, and pay taxes based on actual revenue generated. Declarations are made monthly or quarterly, depending on the specific circumstances of each household business as stipulated by law.

In this context, the question arises:

From 2026 onwards, will sole proprietorships be required to file taxes monthly or quarterly?

Tax declaration methods for household businesses

According to Circular No. 40/2021/TT-BTC of the Ministry of Finance, the tax declaration method is the method used by the taxpayer:

Tax declaration, tax calculation, and tax payment are based on actual revenue generated, according to a defined reporting period of either month or quarter.

This method is currently applicable to:

• Large-scale household businesses and individual businesses;
• Household businesses and individual businesses that have not yet reached a large scale but voluntarily choose to pay taxes using the declaration method.

From 2026, according to the tax policy reform roadmap, the declaration method will become the unified method applied to household businesses.

The tax filing period will apply from 2026.

General principle: Monthly declarations

According to Circular 40/2021/TT-BTC, business households and individual business owners paying taxes using the declaration method must declare their taxes monthly.

This is the default declaration method applied when a business household does not fall under the category of being allowed to declare quarterly or has not registered to choose quarterly declaration.

Cases that are declared quarterly.

Household businesses are only eligible to apply the quarterly reporting period if they simultaneously meet all the conditions under Article 9 of Decree No. 126/2020/ND-CP, including:

Firstly, they are eligible to file tax returns quarterly according to the tax administration laws.

Secondly, there must be a valid written document or option regarding the application of quarterly filing with the directly managing tax authority.

Additionally, in certain cases, newly established business households that meet the prescribed criteria may also choose to file quarterly returns.

If the conditions are not met or no option is selected, the business household is required to file tax returns monthly.

Conclusion regarding the reporting period

• Monthly tax filing: This is the default filing method for household businesses starting from 2026.
• Quarterly filing: This only applies if all eligibility requirements are met and the option is registered in accordance with legal regulations.

Deadline for filing tax returns and paying taxes

According to the provisions of the Tax Administration Law:

For monthly declarations:

The deadline for filing tax returns is no later than the 20th day of the month following the month in which the tax liability arises.

For quarterly declarations:

The deadline for filing tax returns is no later than the last day of the first month of the quarter following the quarter in which the tax liability arises.

The deadline for paying taxes coincides with the deadline for filing tax returns, unless otherwise stipulated by law.

Where and how to submit tax returns

Application submission location:

The Tax Team directly manages the area where household businesses and individual businesses conduct their production and business activities.

Application method:

• Through the Electronic Tax Portal;
• Through the National Public Service Portal;
• If electronic submission is not possible, the documents can be submitted directly to the tax office or via postal service.

Tax return documents include:

• Tax return form No. 01/CNKD;
• Appendix: Statement of business activities during the period (if required by law).

Some things to note when filing taxes from 2026 onwards.

Firstly, business households that pay taxes using the declaration method do not carry out year-end tax settlements.

Secondly, if the declared revenue does not accurately reflect the actual revenue generated, the tax authorities have the right to determine the taxable revenue in accordance with the provisions of the Law on Tax Administration.

Thirdly, household businesses must comply with regulations regarding invoices and supporting documents. This does not mean that they are required to have a complete accounting system like businesses, except in cases where the law specifies specific regulations for each field or industry.

New policy update: The 500 million VND threshold - understanding it correctly to avoid confusion.

On December 10th, the National Assembly passed the amended Personal Income Tax Law and several amendments to the Tax Administration Law.

Accordingly, the revenue threshold for exemption from personal income tax for household businesses and individual businesses has been adjusted upwards from 200 million VND/year to 500 million VND/year.

However, it should be noted:

• The above regulations fall within the scope of the Law on Personal Income Tax (amended).
• The effective date, specific scope of application, and relationship with other taxes (especially value-added tax) must be based on the applicable law and implementing regulations.
• Therefore, it should not be assumed that business households with annual revenue under 500 million VND will be completely exempt from all tax obligations.

While awaiting the full guidance document, business households remain responsible for filing taxes fully, truthfully, and on time according to current legal regulations.

Conclude

From 2026, household businesses will enter a tax management phase based on actual declarations, completely replacing the lump-sum tax method. Specifically:

Monthly reporting is the general principle, quarterly reporting is only a conditional exception, and preparing revenue data, invoices, and supporting documents from the beginning of the business period is a mandatory requirement.