From 1 January 2026, presumptive tax for household businesses is officially abolished under clause 6 of Article 10 of Resolution 198/2025/QH15. Thousands of household businesses acting as satellite suppliers to FDI factories — processing, transport, materials supply, catering services — must switch to the declaration method under Decree 68/2026/ND-CP. This switch is not only the household affair: if a supplier fails to convert in time, the FDI enterprise bears the invoice and cost risk. This article sets out the conversion steps, the chain risks, and what an FDI enterprise should require suppliers to prepare from late 2025.
Issue-by-Issue Analysis
The household conversion comprises four sequential tasks. First, determine its own revenue position: total annual revenue in the taxable scope (above the VND 1 billion per year threshold from 2026) or in the scope of only notifying and tracking revenue under Decree 68/2026/ND-CP — this decides all later duties. Second, register the declaration method with the directly managing tax authority and complete e-invoice registration (or cash-register e-invoices for retail activity in scope). Third, set up books tracking revenue, costs and goods in and out at the minimum level of the declaration method — the largest habit change for a presumptive household, because declared revenue must reconcile with issued invoices and bank flows. Fourth, declare tax quarterly (the household declaration period under Article 10 of Decree 68/2026/ND-CP) and pay as declared; tax withheld and remitted on behalf by an e-commerce platform (if the household also sells on a platform) is reconciled and offset within the declaration.
The chain risk for the FDI enterprise arises at the document point: the cost of goods and services bought from a household business is deductible and input value added tax is creditable only with a valid invoice of the household for that transaction, together with non-cash payment documents as prescribed for transactions from VND 5 million under Value Added Tax Law 48/2024/QH15. If the household has not converted, has not registered e-invoices or avoids issuing invoices, the purchasing FDI enterprise faces a bad choice: booking insufficiently documented costs (disallowed at finalisation, with penalties) or stopping trade with a long-standing supplier. The purchase statement for goods bought without invoices — a form for purchases from non-business individuals — is not an escape for transactions with a household business; misusing that substitute document is a frequently caught error in supply-chain tax inspections.
Whether a small household may choose a “simple declaration” requires separating two layers: the payment-duty layer — at total annual revenue not exceeding VND 1 billion, the household owes no value added tax or personal income tax and therefore has no tax-payment declaration period, but remains under the Decree 68/2026/ND-CP management regime including revenue notification where in scope (Article 8) and revenue tracking to know when the threshold is crossed; and the method layer — for a taxable household, there is no “simple presumptive” option from 2026: the household declares quarterly with the streamlined file set guided for household businesses, and when activity grows to enterprise scale, the right choice is converting into an enterprise for the corresponding invoice system, books and incentives (including the exemption mechanism for enterprises newly established from a household business in Decree 320/2025/ND-CP).
An FDI enterprise should proactively require household suppliers to prepare four things from late 2025: (1) written confirmation of the conversion roadmap to declaration and the date e-invoicing for transactions with the enterprise begins; (2) a contractual commitment to issue full and timely invoices with a clause on liability where documents are invalid; (3) a repricing discussion — the “no-invoice” prices of the presumptive era are no longer a fair comparison basis after 2026, and the parties should agree a transparent invoiced-price mechanism; (4) a backup supplier list for households unable to convert, so the supply chain does not break when the tax authority tightens documents. Completing these four tasks in the last quarter of 2025 turns a compliance risk into an opportunity to standardise the supply chain.
Applicable Legal Framework
- Resolution 198/2025/QH15 — clause 6 of Article 10: the presumptive tax method for household businesses ends from 1 January 2026; household businesses switch to the declaration method under tax administration law.
- Decree 68/2026/ND-CP on tax declaration, computation and administration for household and individual businesses: a household with revenue in the taxable scope declares tax quarterly (Article 10); a small-revenue household follows the revenue notification regime with the tax authority (Article 8); offset and refund mechanisms are at Article 12.
- Decree 141/2026/ND-CP: from 2026, the no-tax revenue threshold for value added tax and personal income tax of household and individual businesses is VND 1 billion per year — the basis for a household to determine whether it must declare and pay, or only notify and track revenue.
- Invoice rules for declaring household businesses: the household uses e-invoices in sales transactions; retail activity in scope applies e-invoices generated from cash registers connected to the tax authority under the prescribed roadmap.
- Corporate income tax and value added tax law on input cost documents: the cost of goods and services purchased from a household business requires a valid invoice and prescribed payment documents to be deductible and to credit input tax.
What the Business Should Do
- Household businesses: determine the revenue position against the VND 1 billion per year threshold, register the declaration method and e-invoices, set up revenue–invoice–cash-flow books, declare tax quarterly.
- FDI enterprises: review all household suppliers and require written conversion roadmap confirmation before 1 January 2026.
- Put a valid-invoice commitment and a document liability clause into purchase contracts; re-agree an invoiced-price mechanism for the post-presumptive period.
- Do not use the no-invoice purchase statement in place of a household business invoice; prepare backup suppliers for households unable to convert.
Frequently Asked Questions
By what steps must a household business supplying an FDI factory switch from presumptive tax to declaration from 1 January 2026?
Four steps: (1) determine the household revenue position against the VND 1 billion per year threshold from 2026 (Decree 141/2026/ND-CP) to know whether it must declare and pay tax or only notify and track revenue; (2) register the declaration method with the tax authority and register e-invoices (cash-register invoices if retail activity in scope); (3) set up books tracking revenue, costs, invoices and cash flows at the level required by the declaration method under Decree 68/2026/ND-CP; (4) declare tax quarterly under Article 10 of the decree and pay as declared, reconciling any platform-withheld amounts if applicable.
If a household business in the supply chain does not convert in time, what invoice and cost risks does the FDI enterprise face?
The direct risk is documentary: a purchase from a household unable to issue a valid e-invoice leaves the FDI enterprise without the conditions to treat the cost as deductible and to credit input value added tax for those transactions; if the cost is still booked using a substitute document meant for another subject (such as the purchase statement for non-business individuals), the cost is disallowed at finalisation with penalties and late-payment interest. The operational risk is supply disruption when the enterprise is forced to reduce or stop trading with a supplier that cannot convert.
May a small-revenue household business choose a simple declaration method?
Two issues must be separated: a household with total annual revenue not exceeding VND 1 billion is outside value added tax and personal income tax from 2026 and therefore has no tax-payment declaration duty, but must still notify revenue and track revenue under Decree 68/2026/ND-CP to determine when the threshold is crossed. For a taxable household, there is no presumptive option from 1 January 2026: the household applies the declaration method quarterly with the streamlined file set for household businesses. When scale grows sustainably, converting into an enterprise is the choice with a more suitable invoice system, books and incentives.
What should an FDI enterprise require household suppliers to prepare from late 2025?
Four things: written confirmation of the roadmap to declaration and the date e-invoicing for transactions with the enterprise begins; acceptance of a contract clause committing to full, timely invoices and liability where documents are invalid; re-agreement of the pricing mechanism on an invoiced-price basis instead of presumptive-era prices; and honest notice of conversion capacity so the enterprise can prepare backup suppliers in time if the household cannot qualify. Requiring these from late 2025 keeps both sides from being passive at the 1 January 2026 point.
This article has been quality-reviewed by the FLAW AI Legal Council