Official Abolition of the Business License Tax Effective January 1, 2026

Date: 2026.03.03

From January 1, 2026, a major change in tax and fee policy officially takes effect: the complete abolition of the business license fee (commonly referred to as the business license tax).
This is considered a significant step in the roadmap to reduce compliance costs, promote the private sector, and support small businesses and household businesses.

So where is this policy stipulated? Who will benefit from it? And from 2026 onward, what types of taxes will household businesses still be required to pay?

1. Official Abolition of the Business License Fee from January 1, 2026

📌 Key Legal Basis

Pursuant to Article 10 of Resolution No. 198/2025/QH15 of the National Assembly, the State officially terminates the collection and payment of the business license fee effective January 1, 2026.

To implement this Resolution, the Government issued Decree No. 362/2025/NĐ-CP dated December 31, 2025, providing guidance on the implementation of the Law on Fees and Charges and officially abolishing all legal grounds related to the business license fee.

📌 Applicable Subjects

The abolition of the business license fee applies to:

– Enterprises

– Household businesses

– Individual business operators

– Organizations and individuals engaged in production and business activities

This also applies to entities newly established from 2026 onward, which will no longer be required to declare or pay the business license fee.

📌 Policy Significance

Although not a large source of revenue, the business license fee has long been regarded as:

– A mandatory compliance cost

– A financial burden on small household businesses and micro-enterprises

– A psychological barrier for new market entrants

The abolition of the business license fee clearly reflects the Government’s policy direction to:

– Improve the investment and business environment

– Reduce administrative burdens

– Encourage household businesses to expand their operations and transition into enterprises

2. From 2026 onward, what types of taxes are household businesses still required to pay?

Before 2026, household businesses were generally required to pay three main types of taxes and fees:

– Business license fee

– Value Added Tax (VAT)

– Personal Income Tax (PIT)

From January 1, 2026:

– The business license fee is abolished

– Household businesses are only required to pay VAT and PIT (if subject to taxation)

In addition, in certain specific cases, household businesses may still be required to pay:

– Environmental protection tax

– Natural resources tax
(if engaging in goods or services subject to these taxes under specialized laws)

3. Taxable Revenue Threshold from 2026 – A Very Important Point

According to the 2024 Law on Value Added Tax and the Law on Tax Administration:

– Household and individual business operators with annual revenue of VND 200 million or more
👉 Are required to pay Value Added Tax (VAT) and Personal Income Tax (PIT).

4. How to Calculate VAT for Household Businesses from 2026

🔹 Case 1: Annual revenue from VND 200 million to ≤ VND 3 billion

Apply the direct method on revenue:

VAT payable = Revenue × Rate (%)

Industry	VAT Rate
Distribution and supply of goods	1%
Services, construction without material-inclusive contracts	5%
Manufacturing, transportation, services associated with goods	3%
Other business activities	2%

👉 Taxable revenue is the total amount stated on the invoice, including surcharges and additional fees.

🔹 Case 2: Annual revenue exceeding VND 3 billion

Apply the credit (deduction) method:

VAT payable = Output VAT – Input VAT

➡️ This case usually requires more systematic invoice and accounting management, similar to the enterprise model.

5. How to Calculate Personal Income Tax (PIT) from 2026

🔹 Annual revenue from VND 200 million to ≤ VND 3 billion

PIT is calculated as a percentage of revenue, depending on the business sector:

Industry	PIT Rate
Distribution and supply of goods	0.5%
Services, construction without material-inclusive contracts	2%
Property leasing, insurance agency, lottery, multi-level marketing	5%
Manufacturing, transportation, services associated with goods	1.5%
Other business activities	1%

🔹 Annual revenue exceeding VND 3 billion

PIT = 17% of profit

Profit = Revenue – Deductible expenses

👉 This group of household businesses should pay special attention to accounting practices, supporting documents, and deductible expenses.

6. Conclusion: Abolishing the Business License Fee – Tangible Benefits for the Private Economy

The official abolition of the business license fee from 2026 goes beyond merely “reducing a fee” and also:

– Lowers barriers to market entry

– Creates financial room for enterprises and household businesses to reinvest

– Encourages household businesses to transform their operating models and pursue sustainable growth

📌 From 2026 onward, tax compliance will focus on the substance of business activities and actual revenue, rather than on formalistic fees.