I. Legal basis

• Law on Personal Income Tax 2025
• Law on Personal Income Tax 2007

II. Supplementation of Tax-Exempt and Tax-Reduced Income

Article 4 of the Law on Personal Income Tax 2025 supplements the categories of tax-exempt income as follows:

• Income derived from dividend distributions of members of agricultural cooperatives and unions of agricultural cooperatives; and income of individuals who are farmers entering into contractual arrangements with enterprises to participate in “large-scale field” schemes, afforestation for production purposes, and aquaculture activities.
• Income from salaries and wages of foreign experts working on programs or projects funded by non-refundable ODA, and programs or projects of foreign non-governmental organizations in Vietnam; income of Vietnamese individuals working at representative offices of organizations within the United Nations system in Vietnam; and income of individuals participating in United Nations peacekeeping forces.

Previously, the aforementioned categories of income were recognized only in Circulars issued by the Ministry of Finance.

In addition, Article 5 of this Law also introduces a number of other cases of tax exemption and tax reduction, including:

• Personal income tax shall be exempt for a period of five (05) years with respect to income from salaries and wages of individuals who are high-quality human resources in the digital technology industry, in the following cases:
  • Income derived from projects involving digital technology industry activities within centralized digital technology zones;
  • Income derived from projects on research and development, and the production of key digital technology products, semiconductor chips, and artificial intelligence systems;
  • Income derived from activities for the training of human resources in the digital technology industry.
• Personal income tax shall be exempt for a period of five (05) years with respect to income from salaries and wages of individuals who are high-tech human resources engaged in research and development activities in high technologies or strategic technologies included in the List of high technologies prioritized for investment and development or the List of strategic technologies and strategic technology products, in accordance with the laws on high technology.
• Personal income tax shall be exempt in respect of transfers of open-ended fund certificates established in accordance with the laws on securities, where such certificates have been held for two (02) years or more from the date of acquisition.
• A reduction of fifty percent (50%) of personal income tax shall apply to dividends distributed to individual investors from securities investment funds and real estate investment funds established in accordance with the Law on Securities, for the duration prescribed by the Government.

III. Changes to personal income tax applicable to income from business activities

Pursuant to Article 7 of the Law on Personal Income Tax 2025, a number of notable amendments have been introduced to the regulations on personal income tax applicable to income from business activities, to be applied from the 2026 tax period, as follows:

1. Raises the revenue threshold not subject to personal income tax to VND 500 million per year

Resident individuals engaged in production and business activities with annual revenue not exceeding VND 500 million shall not be liable to pay personal income tax. The Government shall submit to the Standing Committee of the National Assembly for adjustment of the revenue threshold for personal income tax exemption in line with the socio-economic conditions of each period.

The revenue threshold not subject to personal income tax applicable from the 2026 tax period is increased fivefold compared to the threshold of VND 100 million per year applied in 2025.

2. Business households and individual businesspersons are permitted to deduct expenses for tax calculation purposes in the same manner as enterprises

Personal income tax on income from business activities of resident individuals with annual revenue exceeding VND 500 million shall be determined by multiplying taxable income by the applicable tax rate. In which:

• Taxable income is determined as the revenue from the sale of goods and services minus (–) expenses related to production and business activities incurred during the tax period;
• Individual businesspersons with annual revenue from VND 500 million to VND 3 billion: tax rate of 15%;
• Individual businesspersons with annual revenue exceeding VND 3 billion up to VND 50 billion: tax rate of 17%;
• Individual businesspersons with annual revenue exceeding VND 50 billion: tax rate of 20%.

The above tax rates are equivalent to the corporate income tax rates prescribed under the Law on Corporate Income Tax 2025.

3. Individuals with annual revenue from VND 500 million to VND 3 billion may opt to calculate tax based on revenue

Individual businesspersons with annual revenue exceeding VND 500 million up to VND 3 billion may elect to pay tax in accordance with Points a and b, Clause 2 of this Article, or to pay tax by applying a tax rate multiplied by taxable revenue. The taxable revenue and the applicable tax rates shall be determined as follows:

Taxable revenue shall be determined as the portion of revenue exceeding VND 500 million per year.

The applicable tax rates remain unchanged:

• Distribution and supply of goods: tax rate of 0.5%;
• Services and construction activities not involving the supply of materials: tax rate of 2%. In particular, asset leasing, insurance agency, lottery agency, and multi-level marketing agency activities: tax rate of 5%;
• Manufacturing, transportation, services associated with goods, and construction activities involving the supply of materials: tax rate of 1.5%;
• Activities involving the provision of digital content products and services, including entertainment, electronic games, digital films, digital images, digital music, and digital advertising: tax rate of 5%;
• Other business activities: tax rate of 1%.

4. A tax rate of 5% shall be applied to individuals leasing real estate

Individuals leasing real estate, excluding accommodation business activities, shall be liable to personal income tax calculated on the portion of revenue exceeding VND 500 million per year, multiplied by a tax rate of 5%.

IV. 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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