Tax authority issues new circular: household-business revenue must be verifiable

Circular 18/2026/TT-BTC sets out records and tax administration procedures for sole proprietors and individual traders. It requires household businesses to file tax declarations using the forms prescribed by the circular. By standardizing tax filing documents, revenue notifications, and the mechanism for adjusting revenue, the circular shifts household-business revenue from a largely estimated figure toward revenue that must be substantiated and can be audited. It therefore redefines the legal framework for determining and declaring revenue.

In practice, tax authorities increasingly use data from bank accounts, payment platforms, and electronic invoices to cross-check filings. As a result, tax filing is no longer only a matter of compliance know-how; it becomes a verifiable obligation. Money credited to an account that is not reflected in the tax return is likely to trigger questions later.

What changes under Circular 18/2026/TT-BTC

Beyond filing requirements, the circular also standardizes how business activity is recorded and reported. Household businesses with annual revenue of 1 billion VND are expected to consider electronic invoices from cash registers. Changes in location or industry are no longer treated as internal flexibility; they must be reported. Meanwhile, books and supporting documents—often neglected—are positioned as a “shield” during inspections.

Many household businesses have found the surprise is not that the rules are entirely new, but that they are being enforced more strictly than before. Circular 18/2026/TT-BTC is therefore described as not new in substance, but April 2026 is identified as the time when the rules begin to take effect.

Timeline and implications for household businesses

For smaller household businesses, the change may involve only a few additional procedures. However, for those with larger revenue—particularly those approaching or exceeding 1 billion VND per year—April 2026 is presented as a point to reassess how they operate. Whether to continue as a household business or convert to a company is framed as a strategic decision that should not be postponed.

While April will pass, the approach to managing household businesses—based on data, cross-checks, and transparency—is expected to remain. The key message is that businesses should act now to align records and declarations with the evidence available to tax authorities.

Recommended actions for compliance

1. Record all revenue, including receipts from business activities received by the household business, and include them in taxable revenue.
2. Reconcile revenue with declared or assessed amounts. Taxpayers should compare actual revenue against what is declared or assessed, and if discrepancies arise, make timely supplemental declarations in accordance with tax law to avoid back taxes, late payment penalties, and administrative sanctions.
3. Separate business and personal funds. Keeping the two distinct helps control and reduces the risk that the tax authority treats personal funds as taxable revenue.
4. Retain records and transactions such as bank statements, orders, invoices, and contracts. Without documentation, it is described as difficult to justify revenue and transactions.
5. Declare truthfully and accurately, avoiding underreporting and omitting income sources.
6. Reassess the business model. If revenue exceeds 3 billion VND per year, consider forming a company to manage more systematically and access more benefits.

In short, the circular’s enforcement direction emphasizes that household businesses should know what they earn and declare it accordingly, supported by full evidence.