"As of June 1, larger businesses need to employ electronic invoices for all purchases and sales transactions."
Hà Nội, Vietnam - Beginning June 1, the government of Vietnam is mandating a shift for large business households with significant annual revenues from conventional lump-sum tax payments to a system based on actual revenues, as per Decree 70/2025/NĐ-CP. This move is a significant step in the government's ongoing endeavor to modernize tax management, aiming for a fairer and more transparent tax system.
Under the new regulations, business households earning over VND1 billion annually in targeted sectors are now expected to issue electronic invoices, generated from cash registers linked to tax authorities. This switch replaces the outdated lump-sum tax model, known for its inaccuracies.
As per data from the General Statistics Office, there were approximately 3.6 million business households under tax supervision contributing nearly VND26 trillion to the State budget by the end of 2024. However, about 2 million of these households still follow the lump-sum tax method, with an average monthly payment of VND700,000 as of early 2025. This system has been considered inconsistent with real business performance, often resulting in similar tax payment amounts for establishments with significantly different revenues.
The transition towards electronic invoices is expected to better reflect actual revenues, ensuring fairer tax calculations. This change has garnered positive responses from various business sectors, including traditional market hubs in HCM City and online entrepreneurs.
However, this transformation may present challenges for cash-based businesses, particularly those lacking technological expertise required for electronic cash registers and maintaining digital records. The lack of capability to store and track purchase invoices could complicate accurate tax reporting.
A business household in Thanh Hóa Province. About 2 million business households still implement lump-sum tax payments. - VNA/VNS Photo
Recognizing these complexities, tax authorities are rolling out support initiatives to help business households adapt to the new system. Tax expert Nguyễn Ngọc Tú from Hà Nội University of Business and Technology recommends making regulations more accessible by offering simple forms of invoices and documents to avoid confusion that could impede seamless compliance.
As Vietnam moves towards abolishing flat-rate tax for household businesses by 2026 and transitioning to e-invoicing, careful planning and support are essential to ensure seamless compliance for business households, fostering a more modernized and transparent tax system.
- To promote a fairer and more transparent tax system, the Vietnamese government is transitioning large business households to a system based on actual revenues instead of lump-sum payments, mandated by Decree 70/2025/NĐ-CP starting June 1.
- Under the new regulations, businesses earning over VND1 billion annually in targeted sectors must issue electronic invoices, generated from cash registers connected to tax authorities, replacing the inaccurate lump-sum tax model.
- In the midst of this transformation, close to 2 million businesses, particularly cash-based ones lacking technological expertise, may face challenges in implementing electronic cash registers and maintaining digital records.
- To help businesses adapt, tax authorities are introducing support initiatives and tax expert Nguyễn Ngo côc Tu from Ha Noi University of Business and Technology suggests offering simple forms of invoices and documents to avoid confusion that could hinder seamless compliance.
- As Vietnam aims to abolish flat-rate tax for household businesses by 2026 and transition to e-invoicing, meticulous planning, and support are vital to ensure a smooth transition, fostering a more modernized and transparent tax system in line with market trends and advancements in AI and technology.
