On December 10, 2025, the National Assembly promulgated Law No. 109/2025/QH15 – the Personal Income Tax Law. From January 1, 2026, the new Personal Income Tax (PIT) Law introduces four major changes, as follows:

by KMC Consulting Company Limited

1. Application of a 5-tier progressive tax schedule instead of the 7-tier schedule

Accordingly, the applicable tax rates are 5%, 10%, 20%, 30%, and 35%.

  • The 5% tax rate applies to the portion of monthly taxable income of up to VND 10 million per month.
  • The highest rate of 35% applies to the portion of taxable income exceeding VND 100 million per month.

Specifically, from January 1, 2026, the following 5-tier progressive tax schedule shall apply:

2. Increase in family circumstance deduction

The family circumstance deduction applicable from 2026 is stipulated in Resolution No. 110/2025/UBTVQH15.

Accordingly, from 2026 onward, the deduction levels are as follows:

  • The deduction for the taxpayer themself is increased to VND 15.5 million per month (VND 186 million per year).
  • The deduction for each dependent is VND 6.2 million per month.

3. Full PIT exemption for overtime work, night work, and work on public holidays and Tet holidays

4. Changes in the calculation of Personal Income Tax on business activities from 2026

From 2026, Personal Income Tax on business activities shall be calculated based on the following methods, depending on each specific case:

For more detailed information about this or related Tax Advisory, please don't hesitate to contact us.
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