A business household is a type of business applicable to small scale. The principles of tax declaration and management of a business household are usually very simple. However, like enterprises, a business household also needs to implement accounting and invoice systems according to regulations if it is required to establish an accounting system.
1. When must a business household apply the accounting regime?
Pursuant to Clause 5, Article 51 of the Law on Tax Administration, it is stipulated that:
“5. Business households and business individuals whose revenue and labor scale meet the highest level of criteria for micro-enterprises according to the law on supporting small and medium-sized enterprises must implement the accounting regime and pay taxes according to the declaration method”.
In addition, Article 5 of Circular 40/2021/TT-BTC stipulates:
“4. Business households and individuals paying taxes by declaration method must implement the accounting, invoice and voucher regime. In case business households and individuals conducting business in fields and industries with a basis for determining revenue as confirmed by competent authorities, they do not have to implement the accounting regime.
5. Business households and business individuals paying taxes according to the declaration method do not have to make tax finalization.”
Thus, the mandatory accounting regime applies to large-scale business households that declare taxes using the declaration method. Cases that are not subject to the accounting regime but have a need for it are encouraged by the state.
The basis for a pharmaceutical business to be considered large-scale includes:
– For the agriculture, forestry, fishery and industry and construction sectors: the average number of employees participating in social insurance per year is from 10 people or more; or the total revenue of the previous year is from 3 billion VND or more;
– For the trade and service sector: the average number of employees participating in social insurance per year is 10 people or more; or the total revenue of the previous year is 10 billion VND or more.
Accordingly, a business household that meets one of the two above conditions is considered a large-scale business household.
2. Regulations on accounting regime for Business Households
According to Clause 2, Article 3 of Circular No. 88/2021/TT-BTC, Business households are allowed to choose to implement the accounting regime according to this Circular or the micro-enterprise accounting regime to suit their management needs as well as the characteristics of their production and business activities. Accordingly:
* For accounting regime according to Circular 88/2021/TT-BTC
a) Regarding the arrangement of accountants for business households
– The arrangement of an accountant is decided by the representative of the business household. The representative of the business household can arrange for his/her biological father, biological mother, adoptive father, adoptive mother, wife, husband, biological child, adopted child, brother, sister to be the accountant for the business household or individual business or arrange for a manager, executive, warehouse keeper, treasurer, or person assigned to regularly purchase and sell assets to concurrently be the accountant for the business household or individual business;
– Business households are allowed to apply the provisions in Article 41 of the Law on Accounting and Articles 9, 10, 11, 12, 13, 14, 15, 16, 17 of Decree No. 174/2016/ND-CP dated December 30, 2016 to preserve and store accounting documents to serve the purpose of determining tax obligations to the state budget and tax authority management.
b) Regarding accounting documents
The content of accounting documents, the preparation, storage and signing of accounting documents of business households and business individuals shall be applied according to the provisions of Articles 16, 18 and 19 of the Law on Accounting and shall be implemented according to specific instructions in Appendix 1 “Forms and methods of preparing accounting documents” issued with this Circular.
Business households and business individuals may apply the provisions in Articles 17 and 18 of the Law on Accounting on the preparation and storage of accounting documents in electronic form to implement them in accordance with the characteristics of production and business activities of business households and business individuals.
The content, form of invoices, procedures for creating, managing and using invoices (including electronic invoices) shall comply with the provisions of tax law.
Business households and business individuals apply accounting documents according to the following list:
| STT | Document name | Symbol |
| I | Documents specified in this Circular | |
| 1 | Receipt | Form No. 01-TT |
| 2 | Payment voucher | Form No. 02-TT |
| 3 | Warehouse receipt | Form No. 03-VT |
| 4 | Warehouse delivery note | Form No. 04-VT |
| 5 | Salary and income statement of employees | Form No. 05-LĐTL |
| II | Other documents prescribed by law | |
| 1 | Bill | |
| 2 | Payment slip to the State Treasury | |
| 3 | Bank Debit Note, Bank Credit Note | |
| 4 | Payment authorization |
The purpose of use, forms, contents and methods of preparing accounting documents prescribed in this Circular shall be implemented according to specific instructions in Appendix 1 “Forms and methods of preparing accounting documents” issued with this Circular.
c) About accounting books
The contents of accounting books, the opening, recording, closing and storage of accounting books of business households and individual businesses shall be applied according to the provisions of Articles 24, 25 and 26 of the Law on Accounting and shall be implemented according to specific instructions in Appendix 2 “Forms and methods of recording accounting books” issued with this Circular.
Business households and business individuals may apply the regulations on opening, recording, closing and storing accounting books on electronic devices as prescribed in Article 26 of the Law on Accounting to implement them in accordance with the characteristics of production and business activities of business households and business individuals.
Business households and business individuals may apply the provisions on correction of accounting books in Article 27 of the Law on Accounting to implement them in accordance with the characteristics of production and business activities of business households and business individuals.
Business households and business individuals use accounting books according to the following list:
| STT | Accounting book name | Symbol |
| 1 | Detailed book of sales revenue of goods and services | Form No. S1- HKD |
| 2 | Detailed book of materials, tools, products, goods | Form No. S2-HKD |
| 3 | Production and business cost book | Form No. S3-HKD |
| 4 | Book to track tax obligations to the State budget | Form No. S4-HKD |
| 5 | Book to track salary payment status and salary payments of employees | Form No. S5-HKD |
| 6 | Cash book | Form No. S6-HKD |
| 7 | Bank deposit book | Form No. S7-HKD |
The purpose of use, forms and methods of accounting are guided in Appendix 2 “Forms and methods of accounting” issued with this Circular. In case a business household or individual business has many different business locations, the business household or individual business must open an accounting book to monitor details for each business location.
d) On determining revenue, expenses, and tax obligations
The determination of revenue, expenses, and tax obligations for each business sector and industry is carried out in accordance with the provisions of the law on tax. Specifically, from August 1, 2021, the determination of revenue, expenses, etc. of HKD is carried out in accordance with Circular 40/2021/TT-BTC.
