10% PIT withholding threshold for irregular income raised to VND 5 million

Under Decree No. 253/2026/ND-CP, the Government has increased the income threshold for applying the 10% personal income tax (PIT) withholding on irregular income from VND 2 million per payment to VND 5 million per payment.

Specifically, Clause 2, Article 50 of Decree No. 253/2026/ND-CP provides that:

Organizations and individuals paying wages, remuneration, commissions, or other amounts to resident individuals who do not enter into labor contracts or who enter into labor contracts with a term of less than three (03) months (including cases where wages or other income are paid to employees after the termination of their labor contracts) must withhold PIT at the rate of 10% of the income before payment if the income paid is VND 5 million or more per payment, and remit the withheld tax on behalf of such individuals.

Where the income paid is less than VND 5 million per payment, the income-paying organization or individual may withhold tax at the rate of 10% at the request of the income recipient.

10% PIT withholding threshold for irregular income raised to VND 5 million

Where an individual has only income subject to the above withholding rate but estimates that his/her total taxable income, after family circumstance-based deductions, does not reach the taxable threshold, such individual may submit a written commitment (made according to the form promulgated together with the document guiding tax administration) to the income-paying organization as a basis for temporarily not withholding PIT.

Individuals making such commitments shall take responsibility for the accuracy of their commitments. If any fraudulent declaration is detected, it shall be handled in accordance with the laws on tax administration and other relevant laws.

Based on the individual's commitment, the income-paying organization shall not withhold tax. At the end of the tax year, the income-paying organization must compile a list of individuals whose income has not reached the withholding threshold, along with their income amounts, in accordance with the form promulgated with the document guiding tax administration, and submit it to the tax authority.

For resident individuals entering into labor contracts with a term of three (03) months or more, income-paying organizations and individuals shall withhold tax in accordance with the Partially Progressive Tariff prescribed in Clause 1 of this Article, including cases where an individual enters into labor contracts with a term of three (03) months or more with multiple employers.

Decree No. 253/2026/ND-CP takes effect on July 1, 2026. The provisions concerning business income and income from salaries and wages of resident individuals shall apply from the 2026 tax period.

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