English translation of the 2025 Law on Personal Income Tax is newly published

The 2025 Law on Personal Income Tax No. 109/2025/QH15 marks a significant reform step aimed at adjusting tax policies in line with economic fluctuations and supporting taxpayers in Vietnam. This Law shall take effect on July 01, 2026, replacing previous regulations.

The 2025 Law on Personal Income Tax comprises 4 Chapters and 29 Articles.

Key highlights of this Law include:

- Increasing family circumstance-based deductions: The deduction amount for the taxpayer is increased from VND 11 million to VND 15.5 million per month; the deduction amount for each dependent is increased from VND 4.4 million to VND 6.2 million per month.

- Simplifying the partially progressive tariff: The partially progressive tariff shall apply to taxed income, which is reduced from 7 grades to 5 grades. The income threshold for the highest tax rate (35%) is raised from over VND 80 million to over VND 100 million per month.

- Incentives for business households and individuals: The annual revenue threshold not required to pay personal income tax is increased from VND 100 million to VND 500 million per year. The Law stipulates that the Government shall submit to the National Assembly Standing Committee the adjustment of the revenue threshold not subject to personal income tax in accordance with the socio-economic situation in each period.

- Applying the tax calculation method based on actual income: Personal income tax on income from businesses of residents with annual revenue exceeding VND 500 million shall be determined as taxed income multiplied by the tax rate. Taxed income shall be determined as the revenue from goods and services sold minus the expenses related to production and business activities in the tax period.

- Expanding the scope of taxable income: Income from the transfer of gold bar, digital assets, carbon credits, and income from the transfer of vehicle license plates won through auction are officially liable to personal income tax.

- Adding tax-exempt incomes: Full tax exemption is granted for wages for night shift, overtime work, and salaries and wages paid for days not taken as leave in accordance with the law. Additionally, personal income tax shall be exempted for a period of 05 years for income from salaries and wages of individuals who are high-quality digital technology industry human resources.

View the English translation of the 2025 Law on Personal Income Tax via the website LuatVietnam.vn at: 2025 Law on Personal Income Tax