As Vietnam moves forward with its digital transformation agenda, small and micro business households are facing a wave of new requirements—and a fair share of growing pains. Beginning June 1, 2025, a pivotal regulation will take effect: any household business with annual revenue of 1 billion VND or more must issue electronic invoices directly from cash registers connected to the tax authorities, according to the latest guidance from the General Department of Taxation. This shift, mandated under the recently amended Decree 70 and Decree 123, is designed to modernize tax administration and clamp down on tax evasion. But for many of the country’s smallest entrepreneurs, the transition is proving anything but smooth.
According to a survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI), which polled nearly 1,400 business households, awareness of the new decree is widespread—most respondents know the rules are changing. Yet, for many, the details remain a mystery. "Many households are still waiting for detailed guidance from their local tax authorities to ensure they comply correctly," the VCCI report notes. The lack of clarity is just one hurdle. For these businesses, which already operate on razor-thin margins, the costs of compliance—investing in new equipment, software, and training—are causing real distress.
The numbers paint a stark picture. The Vietnam Banking Association, citing the VCCI survey, found that 63% of business households have been forced to scale back their operations in the face of the new requirements. A further 21%, mostly in the food and grocery sectors, have temporarily shut their doors. Eleven percent have changed their business model entirely, while 3% have closed down altogether. "If the new policy is not accompanied by a clear roadmap and appropriate support mechanisms, it will have a negative impact on the stability of the business household community, which is a vital contributor to economic growth and job creation," the Association warned, according to PLO.
Financial pressure is by far the biggest obstacle. With profits already slim, the need to purchase new devices and electronic invoice software has pushed many to the brink. One business owner, quoted in the VCCI survey, summed up the mood: "The added cost of software and equipment has seriously affected our operations." For some, the only option has been to cut back on staff, reduce offerings, or, reluctantly, close up shop.
Recognizing the severity of the situation, the Vietnam Banking Association has put forward a series of recommendations to the government. First, they urge authorities to issue an official document clarifying that there will be no retroactive tax collection for periods before households transition from the fixed tax regime to the revenue-based tax declaration system. This, they argue, would provide much-needed reassurance to businesses fearful of unexpected bills.
Second, the Association is calling for a minimum transition period of one year, during which no penalties would be imposed for errors in electronic invoice declaration. This grace period would give households time to adapt to the new system without the threat of fines hanging over their heads. Third, they suggest that tax exemptions or reductions be offered for the first one or two years, enabling households to build up the necessary accounting and documentation infrastructure without being overwhelmed by costs.
Other recommendations include a phased rollout—starting with larger households in urban areas, then extending to smaller rural businesses—and robust technical support. The Association proposes that the government provide free software and electronic invoices, along with a dedicated hotline to assist businesses during the early stages of implementation. "This is seen as a practical solution to reduce the burden on business households," the Association emphasized in its statement to PLO.
In response to these concerns, the Tax Department has moved to clarify a number of legal and practical points. On September 24, 2025, the Department issued a formal response to the Association’s proposals, addressing the issue of retroactive tax collection head-on. According to their statement, as reported by PLO, "The response addresses the concerns of households about tax collection during the switch to electronic invoice declaration." While the details of the response are still being digested by the business community, the move is seen as a step toward greater clarity and reassurance.
The Tax Department also reiterated the requirements of Circular 40/2021/TT-BTC, which governs the adjustment of revenue and fixed tax rates. Under this regulation, if a household’s business scale changes, they must file an amended tax declaration. Should their revenue shift by 50% or more, the tax authority will issue a revised fixed tax rate, effective from the time of change within the tax year. This ensures that tax obligations remain fair and proportionate, even as businesses adapt to new realities.
One piece of good news comes from the government’s broader support package. As specified in Resolution 198/2025/QH15, dated May 17, 2025, the State budget will allocate funds to provide free digital platforms and standardized accounting software to small and micro businesses, as well as individual business households. The Ministry of Finance is currently drafting the necessary guidance, which will include details on how these resources will be distributed and accessed. According to the Tax Department, "the State budget allocates funds to provide free digital platforms and common accounting software for small and micro businesses and individual business households."
This initiative is being hailed as a lifeline for the smallest players in the market, many of whom lack the technical know-how or financial resources to make the switch on their own. By offering free tools and training, the government hopes to ease the transition and prevent a wave of closures that could ripple through the wider economy.
Still, challenges remain. For many business owners, the prospect of navigating new software, keeping digital records, and filing electronic invoices is daunting. Some fear that, despite the promises of support, the reality on the ground will be more complicated. Others worry about the reliability of the digital platforms and the risk of technical glitches disrupting their day-to-day operations.
Yet, as the June deadline approaches, there is a sense of cautious optimism. With the government and industry associations working together, there is hope that the rollout can be managed in a way that minimizes disruption and preserves the vibrancy of Vietnam’s small business sector. As one official from the Tax Department put it, "By providing clear guidance, free resources, and a supportive transition period, we aim to help business households embrace the benefits of digital transformation without being left behind."
Vietnam’s push toward electronic invoicing for business households is a bold step toward transparency and modernization. Whether it succeeds in supporting both the state’s revenue goals and the livelihoods of its entrepreneurs will depend on how well the transition is managed in the months ahead.
