Tax treatment of household businesses acting as agents: determining taxable revenue and VAT and personal income tax rates

Ms. Ngô Thị Đoan Trang, who runs a household travel business, signed a contract to act as a ticket sales agent for a company. Under the agreement, the company sets the ticket price at 500 đồng per ticket and issues an invoice to the household business at 400 đồng per ticket. Ms. Trang collects 500 đồng from customers and remits 400 đồng per ticket to the company. She asked whether the household business’s taxable revenue should be calculated on the full 500 đồng per ticket or only the 100 đồng commission difference she earns.

Legal basis on taxable revenue for household agents

The Khánh Hòa Provincial Tax Authority 2 cited provisions of the Personal Income Tax Law and Decree No. 68/2026/NĐ-CP on tax policies and administration for households and individuals doing business.

Personal income tax—taxable income scope

Under Clause 1, Article 3 of the Personal Income Tax Law 109/2025/QH15, taxable income includes income from business activities, including income from agency, brokerage, or business cooperation with organizations.

Personal income tax—revenue determination

Under Clause 2, Article 5 of Decree No. 68/2026/NĐ-CP (dated 05/03/2026), revenue for determining personal income tax is the total money from sales, processing, service provision, including subsidies, allowances, etc., whether or not cash has been received. Revenue also includes bonuses, rewards, and other forms of revenue related to business, excluding commercial discounts, price reductions, or returned goods.

The Decree also specifies that revenue in specific cases includes: when acting as an agent to sell at the price set by the principal (commission earned under the agency contract).

VAT and personal income tax rates applicable to travel-related activities

The tax authority also referenced the applicable tax rates for the household’s travel-related business.

Personal income tax rates

Under Clause 3, Article 7 of the Personal Income Tax Law 2025, resident individuals engaged in production and business with annual revenue up to 500 million are not required to pay personal income tax. Individuals with annual revenue above the threshold up to 3 billion may choose to pay tax under the relevant provisions, where taxable revenue is the portion exceeding the threshold. For services (construction not including procurement of materials), the tax rate is stated as 2% under the cited clause, and for certain agent-related activities (including insurance agents, lottery agents, and other agent categories), the referenced rate is 5%.

VAT rates

Under Article 12 of the VAT Law No. 48/2024/QH15, VAT payable under the direct method is calculated as revenue multiplied by a percentage. The VAT rate for services and construction not including procurement of materials is stated as 5% under the cited provision.

Tax authority’s determination for the commission vs. full sales amount

Based on the cited legal provisions and the taxpayer’s situation, the Khánh Hòa Tax Authority 2 explained that revenue for tax purposes is determined differently depending on whether the household business operates as a fixed-price agent.

Case 1: Agent selling at the fixed price and earning commission under the agency contract

If the household business acts as an agent selling at the fixed price and earns commission according to the agency contract (as described in Clause 2, Article 5 of Decree No. 68/2026), the revenue for tax purposes is determined in line with the commission-based agency treatment.

Case 2: Not an agent selling at a fixed price with commission

If the household business does not operate as an agent selling at a fixed price with commission, the revenue for tax purposes is the full amount of sales, processing, and service revenue that the household business earns, regardless of whether money has been received.

Applicable rates for Ms. Trang’s travel ticket sales activity

Because the household business’s activity is travel-related, the tax authority stated that the VAT rate is 5% and the personal income tax rate is 2% under the cited provisions for the relevant service category.

Implementation guidance

The tax authority advised the household to base its tax policy on the contract terms. If necessary, it should consult the Khánh Hòa Tax Authority (Tax Base 2) for further guidance or provide the contract for detailed instructions. The Khánh Hòa Tax Authority 2 confirmed that the taxpayer should follow the cited legal provisions and the issued document for implementation.