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Some new notable points of the 2025 Personal Income Tax Law, Law No. 109/2025/QH15, passed at the 10th Session of the 15th National Assembly on 10 December 2025

1.1. Regulations on Taxpayers under Article 2

“1. Personal income taxpayers are resident individuals who earn taxable income as prescribed in Article 3 of this Law arising both inside and outside the territory of Vietnam, and non-resident individuals who earn taxable income as prescribed in Article 3 of this Law arising within the territory of Vietnam.

1. A resident individual is a person who meets one of the following conditions:
2. a) Being present in Vietnam for 183 days or more within one calendar year or within 12 consecutive months from the date of first arrival in Vietnam;
3. b) Having a permanent place of residence in Vietnam, including a registered permanent residence or a rented house for living purposes in Vietnam under a fixed-term lease contract.
4. A non-resident individual is a person who does not meet the conditions specified in Clause 2 of this Article.”

1.2. Adjustment of the progressive personal income tax rate schedule from 7 brackets to 5 brackets

Article 9 of the 2025 Personal Income Tax Law stipulates that the progressive tax rate schedule for personal income tax is reduced from 7 brackets to 5 brackets. Specifically, the tax rate at bracket 2 is reduced from 15% to 10%, and the tax rate at bracket 3 is reduced from 25% to 20%.

1.3. Addition of family circumstance deductions as prescribed in Resolution No. 110/2025/UBTVQH15 into the amended Personal Income Tax Law

Article 10 of the amended 2025 Personal Income Tax Law incorporates the family circumstance deductions stipulated in Resolution No. 110/2025/UBTVQH15 of the Standing Committee of the National Assembly. Accordingly, the deduction level for the taxpayer him/herself is VND 15.5 million per month, and the deduction level for each dependent is VND 6.2 million per month, as provided for in the 2025 Personal Income Tax Law.

1.4. Addition of taxable personal income items

Clause 10, Article 3 of the 2025 Personal Income Tax Law provides for additional types of other income subject to personal income tax. Accordingly, other taxable income items are expected to include:

• Income from the transfer of Vietnam national internet domain names “.vn”;
• Income from the transfer of greenhouse gas emission reduction results and carbon credits;
• Income from the transfer of vehicle license plates obtained through auction in accordance with law;
• Income from the transfer of digital assets;
• Income from the transfer of gold bullion.

1.5. Increase of the taxable threshold from VND 10 million to VND 20 million for income calculated on a per-occurrence basis

Articles 15, 16, 17, 18, and 19 of the 2025 Personal Income Tax Law regulate personal income tax on income from winnings, royalties, commercial franchising; inheritance and gifts; and other income. Accordingly, the taxable threshold for income calculated on a per-occurrence basis has been increased from VND 10 million to VND 20 million, specifically for the following types of income:

• Income from winnings;
• Income from royalties;
• Income from commercial franchising;
• Income from inheritance and gifts;
• Other income.

1.6. Increase of the taxable revenue threshold from VND 200 million per year to VND 500 million per year

Articles 29 and 7 of the 2025 Personal Income Tax Law introduce amendments aimed at reducing compliance burdens and facilitating business activities for business households and individuals, especially small and medium-sized business households. Accordingly:

• The non-taxable revenue threshold for business households and individuals is increased from VND 200 million per year to VND 500 million per year, which may be deducted before calculating tax based on a percentage of revenue. At the same time, the corresponding value-added tax (VAT) non-taxable revenue threshold is adjusted to VND 500 million.
• A method of calculating tax based on income is added for business households and individuals with annual revenue exceeding VND 500 million up to VND 3 billion. A tax rate of 15% shall apply, equivalent to the corporate income tax rate applicable to enterprises with annual revenue below VND 3 billion. At the same time, such individuals are entitled to choose between the tax calculation method based on a percentage of revenue or based on income.

Accordingly, the non-taxable revenue threshold for business households and individuals is increased from VND 200 million per year to VND 500 million per year and may be deducted before calculating tax based on a percentage of revenue. Simultaneously, the corresponding VAT non-taxable revenue threshold is adjusted to VND 500 million.

1.7. Implementation provisions

• This Law shall take effect from 1 July 2026, except for the provisions specified in Clause 2 of this Article.
• Provisions relating to income from business activities and income from salaries and wages of resident individuals shall apply from the 2026 tax assessment year.
• The Personal Income Tax Law No. 04/2007/QH12, as amended and supplemented by Law No. 26/2012/QH13, Law No. 71/2014/QH13, Law No. 31/2024/QH15, Law No. 48/2024/QH15, Law No. 56/2025/QH15, Law No. 71/2025/QH15, and Law No. 93/2025/QH15, shall cease to be effective from the effective date of this Law; however, provisions relating to income from business activities and income from salaries and wages of resident individuals shall cease to be effective from the 2026 tax assessment year.