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People Advisory Services Tax Alert | December 2025 | New Personal Income Tax Law 109/2025/QH15
The Personal Income Tax Law 109/2025/QH15 (Law 109) was officially approved by the National Assembly on 10 December 2025. The new law consists of four chapters, 29 articles and will take effect from 1 July 2026. However, provisions relating to business income and employment income for tax residents will apply for the 2026 tax year.
The Personal Income Tax Law 109/2025/QH15 (Law 109) was officially approved by the National Assembly on 10 December 2025. The new law consists of four chapters, 29 articles and will take effect from 1 July 2026. However, provisions relating to business income and employment income for tax residents will apply for the 2026 tax year.
Below is a summary of the key changes under Law 109.
- Key changes on employment income
- Simplified progressive tax brackets for tax residents: The number of brackets has been reduced from seven to five, with the highest rate of 35% now applying to monthly income exceeding VND100 million (previously VND80 million).
|
Bracket |
Monthly assessable income |
Tax rate (%) |
|---|---|---|
|
1 |
Up to VND10 million |
5 |
|
2 |
> VND10 million–VND30 million |
10 |
|
3 |
> VND30 million–VND60 million |
20 |
|
4 |
> VND60 million–VND100 million |
30 |
|
5 |
Over VND100 million |
35 |
- Increased family relief
- Personal relief increased from VND11 million to VND15.5 million per month
- Dependent relief increased from VND4.4 million to VND6.2 million per month for each qualified dependent
- Additional allowable deductions
- Qualifying expenses for healthcare, education, and training for taxpayers and dependents
- Contributions to supplementary pension insurance in accordance with the social insurance law
- Life insurance premiums, subject to limits set by the Government
Expanded personal income tax (PIT) exemptions: Income from night shift wages, overtime, and unused paid leave as prescribed by law are now fully exempt from PIT.
2. Key changes on non-employment income
Income of business households: The threshold for taxable income of business households has been increased. Tax-resident individuals with annual revenue of VND500 million or less are now exempt from PIT. Business households are classified into four groups based on revenue levels as following:
|
Group |
Annual revenue |
Tax rate (*) |
|---|---|---|
|
1 |
Up to VND500 million |
PIT exemption5 |
|
2 |
> VND 500 million-VND3 billion |
Choose one of following PIT calculation methods:
|
|
3 |
> VND3 billion-VND50 billion |
(Revenue – expenses) × 17% |
|
4 |
Over VND50 billion |
(Revenue – expenses) × 20%30 |
(*) For real estate leasing excluding accommodation business activities, taxable revenue is calculated as (Revenue – PIT exemption threshold) × 5%.
- Expanded scope of non-employment income: PIT Law 109 has codified tax obligations for certain special assets, as following:
- A 5% tax rate applies to the portion of income exceeding VND 20 million per transaction, covering transfers of Vietnam’s national internet domain names, emission reduction certificates and carbon credits, as well as auctioned vehicle license plates in accordance with regulations.
- A 0.1% tax rate applies to the transfer price for transactions involving gold bullion and digital assets.
Detailed implementation guidelines will be issued through subsequent Government decrees and/or circulars. Taxpayers are strongly recommended to monitor these developments closely and begin preparing a compliance roadmap to ensure readiness for the new requirements.