I. Legal basis

• Decree No. 253/2026/ND-CP
• Law on Personal Income Tax 2025

II. Increase of the 10% tax withholding threshold for occasional income to VND 5 Million per Payment 

Pursuant to clause 2, Article 50 of Decree No. 253/2026/ND-CP:

• Organizations and individuals paying salaries, wages, remuneration, or other payments to resident individuals who do not have an employment contract or who have entered into an employment contract of less than 03 months (including payments of salaries or other income to employees whose employment contracts have been terminated) must withhold tax and remit the amount of tax withheld on behalf of the individual at the rate of 10% of the income before making the payment, where the income payment is VND 5 million or more per payment.
• Where the income payment is less than VND 5 million per payment, the paying organization or individual may withhold tax at the rate of 10% at the individual’s request.
• Where an individual only has income subject to tax withholding at the above rate, but estimates that their total taxable income, after personal and dependent deductions, will be below the taxable threshold, the individual may submit a tax withholding commitment (using the form issued together with the relevant tax administration guidance) to the income-paying organization, serving as a basis for the organization to temporarily not withhold personal income tax.

Accordingly, for individuals who do not have an employment contract or have an employment contract of less than 3 months, the threshold for tax withholding at source is increased from VND 2 million to VND 5 million per payment. The tax rate remains unchanged at 10% (equivalent to VND 500,000 per payment). For payments below the threshold, tax will only be withheld at the individual’s request.

III. What is occasional income? 

Occasional income refers to income earned on a non-recurring basis from salaries, wages, remuneration, or other payments received by an individual who does not have an employment contract or who has entered into an employment contract with a term of less than 03 months.

Common types of occasional income include teaching and speaking fees; payments to collaborators; brokerage commissions; royalties; payments for short-term project-based work; consulting fees; and fees for artistic performances or events. Under the regulations, these types of income are subject to personal income tax (PIT) withholding at source before payment is made to the individual.

IV. Is tax withholding required for income below VND 5 Million?

Under the new regulations, if the payment is less than VND 5 million per payment, the paying organization is not required to withhold personal income tax (PIT). However, at the individual’s request, the paying organization may still withhold tax at the rate of 10% for the purpose of tax finalization or other personal purposes.

V. Conclusion

From 2026, there will be a notable change in the personal income tax (PIT) withholding policy applicable to casual income. Specifically, under Decree No. 253/2026/ND-CP, individuals receiving casual income of VND 5 million or more per payment will be subject to PIT withholding at the rate of 10%. Compared with the previous threshold of VND 2 million per payment, the new threshold expands the scope of income that is not subject to withholding at source, thereby reducing the administrative burden for both individuals and paying organizations.

To minimize errors in fulfilling tax obligations, businesses and paying organizations should proactively monitor the latest PIT regulations, particularly the applicable conditions and withholding rates for each type of income. Where complex or unclear issues arise, businesses may consider consulting a professional tax advisory firm to ensure that tax withholding, declaration, and finalization are carried out in compliance with applicable regulations.

VI. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm:

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