PIT Vietnam 2026: What Changed Under Law 109/2025/QH15 and How to Prepare
The short answer
Vietnam’s Personal Income Tax Law No. 109/2025/QH15 took effect on 1 July 2026, replacing the 2007 PIT Law framework, alongside implementing Decree No. 253/2026/ND-CP and Ministry of Finance Circular No. 87/2026/TT-BTC. Provisions governing business income and employment income for resident individuals apply from the 2026 tax year. The headline changes: PIT brackets simplified from seven to five (rates 5%–35%), higher personal and dependent deductions, expanded exemptions for high-tech talent, and new coverage of digital platform, e-commerce, and certain digital asset income.
The core changes, category by category
Rate brackets. Resident individuals’ progressive PIT schedule was simplified from seven brackets to five, effective 1 January 2026, still spanning 5% at the bottom to 35% at the top for the highest earners.
Deductions. The standard personal deduction increased to VND 15.5 million per month (up from VND 11 million previously), and the dependent deduction increased to VND 6.2 million per month per registered dependent (up from VND 4.4 million). These apply in full for the 2026 tax year.
High-tech talent exemption. A five-year PIT holiday was introduced for qualifying high-tech professionals, part of a broader push to make Vietnam more competitive for scarce technical talent.
Digital and e-commerce income. The law extends PIT coverage explicitly to income earned through digital platforms, e-commerce activity, and certain digital asset transactions — closing gaps that existed under the prior framework.
Capital and securities transfer calculation methods. The law reforms how gains on capital and securities transfers are calculated, relevant for individuals holding investment portfolios or divesting business interests.
What’s still pending as of mid-2026
Detailed implementing guidance for several specific measures — including the mechanics of new education and healthcare deductions and the threshold for gold transaction taxation — had not yet been issued as separate decrees and circulars at the time of the law’s effective date. Until that guidance is published, taxpayers and employers should apply the law’s provisions conservatively and maintain careful documentation, rather than assuming favorable interpretations that later guidance may not confirm.
Who is most affected
Resident individuals with mid-to-high incomes, who benefit from higher deductions but should re-model their effective tax rate under the new bracket structure rather than assuming the old calculation still applies
Employers of foreign staff, who need updated payroll withholding calculations reflecting the new deductions and bracket structure (see our related guide on Income Tax for Foreign Employees in Vietnam: An Employer’s Guide)
High-tech sector employers and employees, who should assess eligibility for the new five-year PIT holiday
Individuals with digital platform, e-commerce, or digital asset income, who now fall more clearly within PIT’s scope and should review historical compliance
Investors with capital or securities transfers, who should reassess gain calculations under the revised methodology
Practical steps to take now
Re-run payroll withholding calculations against the new deduction and bracket structure for all resident employees
Confirm dependent registrations are current to capture the increased VND 6.2 million/month deduction
Assess high-tech talent exemption eligibility for qualifying hires and existing staff
Review any digital platform, e-commerce, or digital asset income streams for PIT exposure that may not have been clearly covered before
Apply pending-guidance areas (education/healthcare deductions, gold transaction thresholds) conservatively until further circulars are issued
How W&A Consulting helps
We help individuals and employers apply Law 109/2025/QH15 correctly in practice — recalculating withholding, assessing exemption eligibility, and tracking implementing guidance as it’s issued so clients aren’t caught applying outdated assumptions. Our Managing Partner is a licensed tax agent and FCCA with direct experience navigating Vietnamese tax law transitions for multinational clients.
Need your payroll or personal tax position updated for the 2026 PIT law? Contact W&A Consulting.
FAQ
When did Vietnam’s new PIT law take effect?
1 July 2026, under Law No. 109/2025/QH15, with employment and business income provisions for resident individuals applying from the 2026 tax year.
What is the new personal deduction under the 2026 PIT law?
VND 15.5 million per month for the individual, and VND 6.2 million per month per registered dependent.
Are all details of the new PIT law finalized?
Not entirely — some implementing guidance (e.g., specific education/healthcare deduction mechanics and gold transaction thresholds) was still pending as of mid-2026 and should be applied conservatively until issued.
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