INDIVIDUAL BUSINESS HOUSEHOLDS

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Currently, household businesses are a very popular type of business in Vietnam. Household businesses are a popular choice for small business activities because they are special in this type of business. Entities that do not have to face many operational management mechanisms like corporate enterprises and moreover, small business households can choose the flat tax calculation method, making it easy to pay monthly taxes, precious for the state.

WHAT IS A BUSINESS HOUSEHOLD?

Pursuant to Clause 1, Article 79 of Decree 01/2021

• A business household is established byan individual or household membersand is responsible for all of its assets for the business activities of the household. In case household members register a business household, one member shall be authorized to act as the business representative. The individual who registers the business household, the person authorized by household members to act as the business household representative, is the business household owner.

LIMITATIONS - SCALE - HOW BUSINESS HOUSEHOLDS OPERATION

• Currently, according to Decree 01/2021, which has taken effect, the regulation that business households employing more than 10 employees must be converted into enterprises (old regulations of Decree 78/2015) is abolished.
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• A business household is not an enterprise and has no legal status. The business owner must bear unlimited liability for his or her assets.
• Household businesses do not exercise the rights to export and import goods like corporate enterprises.
• Business households do not have a seal, are not allowed to open branches or representative offices, are not allowed to exercise the rights that businesses have such as import-export activities or apply the Bankruptcy Law when making business losses. .

TYPES OF TAXES THAT MUST BE PAID AND HOW TO CALCULATE TAXES OF BUSINESS HOUSEHOLDS

The tax calculation is as follows:

VAT amount payable: Revenue from sales of goods and provision of services * VAT rate
Amount of personal income tax payable: Revenue from sales of goods and provision of services * personal income tax rate

License Tax amount payable:

• Over 100 to 300 million VND: 300,000 VND (Three hundred thousand VND)
• Over 300 to 500 million VND: 500,000 VND (Five hundred thousand VND)
• Over 500 million VND: 1,000,000 VND (One million VND)

Except for business households with large-scale revenue as prescribed (10 employees or more and revenue for agricultural production business activities of 3 billion or more or wholesale trade of 10 billion or more), then Business households and individual businesses are selected and calculated according to the flat tax calculation method (Household).

Note: Revenue of 100 million/year or less does not have to pay personal income tax, VAT, or license tax.

WHERE TO REGISTER A BUSINESS HOUSEHOLD?< /h2>

Pursuant to Article 87 of Decree 01/2021 guiding business registration

Business household registration is done at the district business registration agency where the business household's headquarters is located. (Specifically, the Finance and Planning Department under the People's Committee of the district, town and district). However, depending on some specific localities such as district People's Committees in Ho Chi Minh City, they will be required to receive online registration applications via Website https://dichvucong.hochiminhcity.gov.vn

Refer to services and related articles:

>>> Business registration service/ individual business household registration

>>> Who can establish a household business

>>> Suspension period of business households

Consultation hotline: 0935289747 – Mr. Tran Huu Toan