2025 Personal Income Tax Law Update

On 10 December 2025, the National Assembly approved the amended Personal Income Tax Law, effective from 1 July 2026. Provisions regarding income from business activities and salary/wages for residents will apply from the 2026 tax period.

Key changes in the new PIT Law

Simplified progressive tax brackets

The tax schedule now comprises 5 brackets with progressively wider income ranges:

Tax Bracket	Annual Taxable Income (million VND)	Monthly Taxable Income (million VND)	Tax Rate (%)
1	Up to 120	Up to 10	5
2	Over 120 to 360	Over 10 to 30	10
3	Over 360 to 720	Over 30 to 60	20
4	Over 720 to 1,200	Over 60 to 100	30
5	Over 1,200	Over 100	35

Exclusion of excess severance and unemployment benefits from taxable income

The amended PIT Law introduces additional provisions excluding severance allowances and unemployment benefits from taxable income, including amounts exceeding the limits prescribed under the Labor Code. Under the previous regulations, any amount exceeding the statutory thresholds was subject to personal income tax.

Full tax exemption for night shift, overtime pay and unused leaves

Wages for night shifts, overtime work, and compensation for unused leave days are now fully exempt from personal income tax. This differs from the previous law which only exempted the premium portion of overtime pay above regular wages.

Additional special deductions for employment income 

Taxpayers can now deduct healthcare and education expenses for themselves and dependents when calculating PIT, reducing tax burden on essential costs. The Government will issue detailed regulations to ensure flexibility and alignment with socioeconomic conditions.

Capital Transfer Income

• 20% tax rate on each transfer transaction. Taxable income is determined by calculating the selling price minus purchase price and reasonable related expenses
• In cases where the purchase price and related expenses cannot be determined, CIT is calculated at 2% of the selling price.

The above tax treatment is uniformly applied to both resident and non-resident individuals.

Increased taxable threshold for certain income types

The taxable threshold for income from prizes, royalties, commercial rights transfers, inheritance, and gifts increases from 10 million to 20 million VND (tax rate remains 10%).

Expanded taxable income categories

The new PIT Law supplements regulations to include additional taxable income types, including:

• Income from transfers of Vietnam's national ".vn" domain names;
• Income from transfers of greenhouse gas emission reduction results and carbon credits;
• Income from transfers of auctioned vehicle license plates in accordance with legal regulations;
• Income from transfers of digital assets;
• Income from transfers of gold bullion.

For these new categories:

• 5% tax on amounts exceeding 20 million VND per occurrence
• 0.1% tax on digital asset transfers through transparent trading platforms
• 0.1% tax on gold bullion transactions.

Green finance and carbon credit exemptions

Tax exemptions for environmental initiatives in line with global climate commitments. The following income types are now tax-exempt: income from first-time transfers of certified greenhouse gas emission reductions and carbon credits, interest earned on green bonds, and first-time transfers of green bonds after issuance.

These exemptions support Clean Development Mechanism projects and align with Environmental Protection Law No. 72/2020/QH14, which established carbon credit trading frameworks. These measures aim to stimulate green investment and help Vietnam meet its COP26 climate commitments.

High-tech researcher incentives

The new PIT law offers 5-year personal income tax exemption for salaries and wages of individuals working as high-tech professionals engaged in research and development of:

• High technologies
• Strategic technologies listed in the Priority High-Tech Development Investment Catalog
• Strategic technologies and strategic technology products as defined by high-technology laws.

Investment fund incentives

For investment fund activities:

• Full tax exemption: For transfers of open-end fund certificates established under securities laws that have been held for at least 2 years from the purchase date.
• 50% tax reduction: For profits distributed to individual investors from securities investment funds and real estate investment funds established under the Securities Law, for a period to be specified by the Government.

These tax incentives aim to encourage long-term investment in regulated fund vehicles, promote capital market stability, and support Vietnam's financial market development.

The Government will issue detailed implementation guidance for these provisions.