Penalties for late tax declarations by household businesses

Late tax declarations by household businesses: penalties and key thresholds after the phase-out of the tax-quota regime. On April 3, the Vietnam Chamber of Commerce and Industry (VCCI) and the Tax Department organized a seminar to assist households in declaring taxes for Q1. This is the first filing after the abolition of the tax-quota regime, and many households filing for the first time still have questions. A representative from the Hanoi-based household business Nguyen Thi Thuy Dung asked: If registering under level one, but revenue in the year exceeds 500 million VND, is there an obligation to move to level two? When revenue reaches 1 billion VND, must the household business register to use electronic invoicing and issue invoices immediately when the threshold is exceeded? Regarding this, Ms. Nguyen Thi Thu Ha, Policy, International Tax, Tax Department, said that under Decree 68, if from quarter II the revenue of a household business exceeds 500 million VND, it must declare tax by the corresponding method from that quarter. For the obligation to use electronic invoices, when annual revenue exceeds 1 billion VND, the household must register to use electronic invoices. The deadline is within 30 days from the end of the tax period in which the revenue threshold is exceeded. The household should contact the provider of electronic invoice solutions to register and be issued a code by the tax authority. The Tax Department representatives advised households to actively monitor actual revenue to timely switch declaration methods and fulfill invoicing obligations. Concerns about penalties for late declarations were raised. Mr. Nguyen Thanh Phuc, representing the Vietnam-My Law and Accounting Firm, said households that declare late will be classified as high risk and fined (under Decree 125/2020 on penalties for tax and invoicing violations). The fine for households is half that for enterprises. Specifically, if late by 1–5 days and it is the first offense, households may only receive a reminder or warning. However, from the second offense onward, if late by 1 to under 30 days, penalties range from 1 to 2.5 million VND. For delays of 31–60 days, penalties range from 5 to 8 million VND. For delays of 61–90 days, penalties range from 4 to 7.5 million VND. For delays exceeding 90 days (day 91 and beyond), penalties range from 7.5 to 12.5 million VND. Additionally, if tax declarations are on time but the tax payment is late, additional late-payment interest applies at 0.03% per day on the overdue tax amount. Mr. Phuc noted that although penalties for household businesses are half those for corporations, households should still ensure timely declaration and payment to avoid risks and costs. Under current regulations, households with 2026 revenue will have to submit different documents according to their group. Read more.