The rapid development of the digital economy has opened up many new business opportunities for individuals, especially for digital products such as ebooks, video courses, design templates, or AI prompts. However, due to the "intangible" nature of these products, determining the tax sector, applicable tax rates, and related administrative procedures remains a point of confusion for many individuals when fulfilling their tax obligations.
This article provides a comprehensive analysis of tax obligations for individuals conducting business in digital products in 2026, based on current legal documents from the Ministry of Finance.
Procedures for updating information when changing business items.
According to the new tax regulations, changes in the type of business product are not only of internal significance but are also mandatory information that must be updated with the tax authorities.
Based on Article 10 of Circular 86/2024/TT-BTC (effective from 2025), when an individual business adds or adjusts its product lines or business activities, the taxpayer must carry out the procedure to adjust tax registration information to ensure that the management data is synchronized and accurate.
For individuals directly involved in business, the amendment documents include:
- Declaration form for adjusting and supplementing tax registration information (form 08-MST);
- If the changes relate to a business license or equivalent document, a certified copy of these documents must be submitted.
Documents that can be submitted:
- Directly at the Tax Office in the place of residence or business location; or
- Through the electronic tax system. In the digital transformation trend of 2026, eTax Mobile and the Electronic Tax Portal are encouraged for use to shorten processing time and reduce administrative contact.
Classification of industries and determination of tax rates for digital products.
Proper classification of the nature of business activities is crucial in determining the VAT and personal income tax rates payable. According to Circular 40/2021/TT-BTC, taxes for individual businesses are calculated as a percentage of revenue, but each industry group has a different tax rate.
For digital products created by individuals, not produced to order, they can be classified as follows:
| Type | Industry groups according to Circular 40/2021/TT-BTC | VAT | Personal Income Tax | Total percentage |
| Ebook, Template, AI prompt | Distribution and supply of goods | 1% | 0.5% | 1.5% |
| Custom-designed digital content | Providing services | 5% | 2% | 7% |
| Transfer of copyright and content usage rights. | Other business activities | 2% | 1% | 3% |
In fact, mass-produced AI prompts or digital templates often have the nature of pre-packaged digital goods, similar to ebooks or design files. Therefore, applying a tax rate of 1.5% is appropriate if:
- The product is widely available;
- Not personalized for each customer;
- No in-depth support services are included.
Conversely, if the business activity involves transferring the right to use content, granting exploitation rights, or making modifications upon request, the tax authorities may consider applying the "other business activities" category with a total tax rate of 3%. The choice of industry group should be based on the actual sales model, not just the product name.
Are revenues exceeding 500 million VND subject to VAT tax code 10%?
This is one of the most common misconceptions among individuals selling digital products.
According to current regulations, the VAT rate 10% does not apply to individuals and business households paying tax using the percentage-based method on revenue, regardless of whether their revenue reaches 500 million VND, 1 billion VND, or higher.
Circular 40/2021/TT-BTC only stipulates the revenue threshold for determining tax declaration obligations, and is not a basis for switching to tax rate 10%.
VAT 10% only arises in the following cases:
- Individuals cease their business operations and transition to a corporate model;
- Businesses apply the VAT deduction method in accordance with the VAT Law.
Therefore, individuals doing business in digital products in 2026 will not be subject to a "tax jump" to tax code 10% simply because of high revenue, as long as they continue to operate as individuals or household businesses.
Tax filing obligations arise when revenue is stable or generated under contract.
According to Clause 1, Article 15 of Circular 40/2021/TT-BTC, individuals conducting business in the following cases:
- Directly sign contracts for the supply of products and services;
- Business activities falling under the category of "other businesses" as specified in Appendix I of Decree 126/2020/ND-CP;
Note: Tax returns must be filed annually.
The annual tax return includes:
- Tax return form 01/TKN-CNKD;
- A copy of the economic contract;
- Minutes of acceptance and contract settlement (if any).
In the case of individuals conducting business irregularly and without a fixed location, tax obligations are fulfilled each time revenue is generated. In this case, the applicable tax rate is still based on the correct classification of the product as goods or services, with rates ranging from 1.51% to 71% of the total taxable income.
Notes on record management and post-audit risks
Even with a simplified tax method, individuals selling digital products still need to:
- Store contracts and payment documents;
- Back up sales data and transaction history;
- Clearly manage each product type and delivery model.
This is an important basis for explanation during tax audits and inspections, especially in the context of increasing scrutiny by regulatory agencies of cross-border and online digital business activities.
Contact information MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
