Major Personal Income Tax Changes Effective 2026

We are pleased to share important updates to Vietnam’s Personal Income Tax (PIT) policy following Resolution 110/2025/UBTVQH15 and the draft amendments to the PIT Law. These changes aim to reflect economic realities, reduce tax burdens, and promote fairness.

Key changes
 

1. Increased Family Circumstance Deductions

• Deduction for taxpayers: VND 15.5 million/month (up from VND 11 million).
• Deduction per dependent: VND 6.2 million/month (up from VND 4.4 million).
  Effective January 1, 2026, these adjustments will provide greater relief for individuals and families.

2. Revised Progressive Tax Brackets

From January 2026, the PIT schedule will be streamlined to five brackets:

• Up to VND 10 million/month: 5%
• Over VND 10–30 million/month: 15%
• Over VND 30–60 million/month: 25%
• Over VND 60–100 million/month: 30%
• Above VND 100 million/month: 35%

3. Estimated Impact on Taxpayers

Combining the new deductions and the revised five-tier tax structure:

An individual earning VND 50 million/month with one dependent will pay approximately VND 2.46 million in PIT (down from VND 4.28 million today).

An individual earning VND 100 million/month will see their PIT drop from nearly VND 18 million to about VND 15 million.

4. Incentives for High-Tech Talent

• Full PIT exemption for 5 years for qualified professionals in digital technology sectors, including R&D, semiconductor production, and AI projects.
• 50% PIT reduction for individuals working in high-tech, IT, innovation, and digital transformation fields.

5. Capital Transfer Taxation

For resident individuals transferring capital:

• If purchase price and related costs are identifiable: Tax = (Transfer Price – Purchase Price – Related Costs) × 20%.
• If related costs are not identifiable: Tax = Transfer Price × 2% (a new simplified method).

Effective Dates:

• Most provisions under the amended PIT Law: July 1, 2026.
• New deductions and tax brackets: January 1, 2026.

What Means for You

• These reforms are designed to reduce the tax burden for middle-income earners, foster innovation, and ensure greater equity across income groups. In addition, the new tax exemptions and reductions for high-tech professionals will have a significant impact on talent development in digital technology and advanced technology sectors.
• We strongly recommend reviewing your tax planning strategies ahead of the 2026 fiscal year to take full advantage of these changes.