I.  Legal basis

• Resolution No. 110/2025/UBTVQH15
• Law on Personal Income Tax 202
• Resolution No. 954/2020/UBTVQH14

II. The new level of personal deduction for family circumstances applicable from the 2026 tax period

Pursuant to Article 1 of Resolution No. 110/2025/UBTVQH15, from the 2026 tax period, the new levels of personal deductions for family circumstances are prescribed as follows:

• For the taxpayer: the personal deduction is increased from VND 11 million per month to VND 15.5 million per month (equivalent to an increase from VND 132 million per year to VND 186 million per year).
• For each dependent: the deduction is increased from VND 4.4 million per month per dependent to VND 6.2 million per month per dependent.

Accordingly, this increase is equivalent to approximately 40% compared to the previous level. Accordingly, certain common income levels subject to personal income tax under the new family-based deduction schedule, after taking into account deductible expenses and other exempt amounts, include:

• Social insurance contributions, voluntary pension fund contributions, and charitable, educational promotion, and humanitarian donations;
• Income exempt from personal income tax;
• Amounts not subject to personal income tax, such as certain allowances, subsidies, and meal allowances. 

III. What are the conditions for determining dependents for the purpose of calculating personal income tax?

Pursuant to Point d, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC, individuals who are determined as dependents in accordance with the guidance provided in Sub-points d.2, d.3, and d.4 of Point d, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC must satisfy the following conditions:

• For individuals of working age, the following conditions must be concurrently satisfied:

• They are disabled or incapable of working. For this purpose, persons who are disabled or incapable of working include those subject to the laws on persons with disabilities, as well as persons suffering from diseases that render them incapable of working (such as AIDS, cancer, chronic renal failure, etc.);
• They have no income, or their average monthly income during the year from all sources does not exceed VND 1,000,000.
• For individuals outside the working age, they must have no income, or their average monthly income during the year from all sources must not exceed VND 1,000,000.

IV. How to calculate personal income tax in 2026 under the new family-based deductions

The Personal Income Tax Law 2025 has also been promulgated and will take effect from July 1, 2026; however, the provisions on salaries and wages subject to personal income tax shall be applied from January 1, 2026.

Pursuant to Clause 1, Article 8 of the Personal Income Tax Law 2025, the formula for calculating personal income tax on income from salaries and wages of resident individuals is determined as follows:

• Personal income tax (PIT) = Taxable income, regardless of the place of income payment, × the tax rate under the partially progressive tax schedule.
• Taxable income from salaries and wages shall be determined in accordance with the following formula:
• Taxable income = Total taxable income received during the tax period − contributions and allowable deductions.

Personal income tax (PIT) = [(Total taxable income − contributions and allowable deductions) × the partially progressive tax rate]

Whereby:

• The total taxable income received during the tax period includes the following items:
  • Salaries, wages, and other amounts of a salary or wage nature;
  • Remuneration and benefits in cash or in kind in any form.

• Allowances, subsidies, and other income, excluding the following items:

• Preferential allowances and benefits for persons with meritorious services;
• National defense and security allowances;
• Hazardous and dangerous work allowances (if any);
• Attraction allowances and regional allowances;
• Allowances, benefits, and living allowances paid by Vietnamese authorities abroad;
• Emergency hardship allowances; allowances for occupational accidents and occupational diseases;
• Lump-sum allowances granted upon childbirth or adoption;
• Allowances due to diminished work capacity;
• Lump-sum retirement allowances; monthly survivor’s allowances;
• Other allowances and benefits under the social insurance regime;
• Severance allowances and job-loss allowances;
• Allowances of a social welfare nature;
• Other allowances, benefits, and incomes not constituting wages or salaries as prescribed by the Government.

• Contributions include:

• Social insurance, health insurance, unemployment insurance, and professional liability insurance (if any);
• Contributions to supplementary pension schemes;
• Purchase of voluntary pension insurance and life insurance, not exceeding the limits prescribed by the Government.
• Deductions include:
  • Personal and family deductions: VND 15.5 million per month for the taxpayer and VND 6.2 million per month for each dependent.
• Charitable and humanitarian contributions:
  • Contributions to organizations and establishments providing care and nurturing for children in particularly disadvantaged circumstances, persons with disabilities, and elderly persons without support;
  • Contributions to charitable funds, humanitarian funds, and education promotion funds;
  • Contributions to organizations authorized to mobilize donations, which are established and operate in accordance with the law.
  • In which, such organizations, establishments, and funds must be licensed for establishment or recognized by competent state authorities, operate for charitable, humanitarian, or education promotion purposes, and not for profit.
• Expenditures on healthcare, education, and training of the taxpayer and his/her dependents.

Progressive tax rate schedule: Instead of the previous seven (07) tax brackets as prescribed in Clause 2, Article 22 of the Law on Personal Income Tax 2007, the current progressive tax rate schedule now consists of only five (05) tax brackets, as follows:

V. What is the deadline for annual personal income tax finalization?

• For income-paying organizations: The deadline is the last day of the third month (31 March each year) following the end of the calendar year.
• For individuals who directly carry out tax finalization: The deadline is 30 April each year. However, as 30 April–1 May fall on a public holiday period (pursuant to Article 112 of the 2019 Labor Code), the deadline for personal income tax finalization shall be deferred to the first working day following the public holiday period.

Note: Where an employee is entitled to a personal income tax refund but submits the tax finalization return later than the prescribed deadline, no administrative penalty shall be imposed for the violation of late submission of the tax finalization return (Clause 4, Article 28 of Circular No. 111/2013/TT-BTC).

VI. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

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