Vietnam’s Personal Income Tax 2026 law was amended Law No. 109/2025/QH15 and officially takes effect from July 1, 2026. Key rules for salary, wages, and business income, however, apply right from January 1, 2026. These updates significantly reduce the tax burden for employees and business owners amid rising living costs.
This guide explains exactly how to calculate PIT in 2026, highlights the major changes (increased family deductions, simplified progressive rates, expanded exemptions), and provides clear, real-world examples so you can compute your tax accurately and stay fully compliant.
1. Major Changes to Personal Income Tax from 2026
2026 introduces the biggest PIT reforms since 2012, driven by the amended PIT Law 2025 and Resolution 110/2025/UBTVQH15. The goal is to ease pressure on middle-income earners, support digital businesses, and attract high-tech investment while keeping pace with economic growth and inflation.
| Change | Main Benefit |
| Increased family deductions | Lower tax for individuals and families |
| Simplified progressive brackets | Easier calculation, reduced tax for average incomes |
| Expanded exemptions | Support for high-tech, agriculture, and green sectors |
These reforms make the tax system more modern, transparent, and easier to comply with.
1.1 Increased Family Deductions Effective January 1, 2026
From January 1, 2026, family circumstance deductions are raised to better match higher living costs, helping millions of taxpayers pay less personal income tax The personal deduction increases from VND 11 million to VND 15.5 million per month (VND 186 million per year), and the deduction per dependent rises from VND 4.4 million to VND 6.2 million per month.
| Type of Deduction | 2025 Amount | 2026 Amount |
| Personal deduction | 11 million/month | 15.5 million/month |
| Per dependent | 4.4 million/month | 6.2 million/month |
Who qualifies as a dependent?
- Children: Under 18; over 18 if disabled and unable to work; full-time students (university, college, vocational) under 22 with low or no income.
- Spouse: Unable to work or with very low/no income.
- Parents, grandparents, siblings: Elderly or disabled individuals with insufficient income, directly supported by the taxpayer.
Key conditions
- Each dependent can be claimed by only one taxpayer.
- Proof is required (birth certificate, household registration, disability certificate, school enrollment, support commitment letter).
- Register with your employer or tax office (usually via Form 20-ĐK-TNCN) before tax is calculated.
1.2 New Progressive Personal Income Tax 2026 Rates – Reduced from 7 to 5 Brackets
Effective January 1, 2026, the progressive tax scale is simplified from 7 brackets to 5, with wider income ranges to reduce the effective tax rate for middle earners. The top rate remains 35%, now applying only to monthly taxable income over VND 100 million (previously VND 80 million).
| Bracket | Monthly Taxable Income (VND million) | Annual Taxable Income (VND million) | Tax Rate (%) |
| 1 | Up to 10 | Up to 120 | 5 |
| 2 | Over 10 to 30 | Over 120 to 360 | 10 |
| 3 | Over 30 to 50 | Over 360 to 600 | 20 |
| 4 | Over 50 to 100 | Over 600 to 1,200 | 30 |
| 5 | Over 100 | Over 1,200 | 35 |
Old vs. new comparison The old 7-bracket system had narrower bands, pushing many middle-income earners into higher rates. The new structure is simpler and saves 5–15% in tax for most employees, while encouraging extra work without jumping brackets quickly.
1.3 Expanded Exemptions, Reductions & Special Incentives
The updated law adds 21 new exempt income categories starting in 2026, focusing on education, healthcare, green projects, and high-tech sectors. Additional benefits include a 50% reduction on certain investment income and a 5-year exemption for high-tech professionals.
- New exempt items: Certain overtime pay, scholarships, income from green bonds, organic agriculture, gifts under VND 10 million, disaster relief support.
- Special incentives: 5-year PIT exemption for experts in AI, semiconductors, and R&D; 50% reduction on income from investments in tech startups.
| Incentive Type | Condition | Duration |
| Scholarship exemption | Full-time formal education | Indefinite |
| 5-year high-tech exemption | Experts in AI, semiconductors, R&D | 5 years from 2026 |
| 50% investment reduction | Green/technology startups | Applies to 2026+ income |
Proof (contracts, certificates) is required, often from the Ministry of Science and Technology.
2. How to Calculate Personal Income Tax in 2026 – Step-by-Step Guide
Core formula Tax payable = Taxable income × Progressive tax rate Taxable income = Total income – Exempt items – Deductions (family + mandatory insurance + charity + eligible medical/education expenses)
This applies to tax residents. Non-residents pay a flat 20% on Vietnam-sourced income.
Step 1: Determine Your Tax Residency Status
Start by confirming whether you are a tax resident or non-resident, as this determines what income is taxable.
Under Vietnam’s PIT law:
- Tax resident: Present in Vietnam ≥183 days in the calendar year, or maintaining a permanent residence (owned home or long-term rental with registered address).
- Non-resident: Taxed only on income sourced from Vietnam.
Tax implications
- Residents: Taxed on worldwide income using the 5-bracket progressive scale (5%–35%).
- Non-residents: Flat 20% on Vietnam-sourced salary and wages (other rates apply to specific types).
Step 2: Calculate Taxable Income
Basic formula: Taxable income = Total income – Exempt items – Deductions
- Total income includes salary, bonuses, taxable allowances, business profits, investment returns, etc.
- Exempt items include scholarships, certain overtime pay, small gifts, etc.
- Deductions include:
- Family deduction (VND 15.5 million/month personal + VND 6.2 million/month per dependent)
- Mandatory social, health, unemployment insurance (BHXH, BHYT, BHTN)
- Charitable donations (with receipts)
- Medical & education expenses (new in 2026, up to VND 10 million/year – detailed guidance pending)
Example In January 2026, Mr. A receives:
- Salary: VND 70,000,000
- Meal allowance (per company policy): VND 1,000,000
- Sales commission: VND 2,000,000
No charitable contributions. Mr. A has one registered dependent (child under 18).
Calculation:
- Total income: 70,000,000 + 1,000,000 + 2,000,000 = VND 73,000,000
- Exempt: VND 1,000,000 (meal allowance)
- Deductions: 15,500,000 (personal) + 6,200,000 (dependent) + 4,200,000 (mandatory insurance) = VND 24,850,000
- Taxable income = 73,000,000 – 1,000,000 – 24,850,000 = VND 47,150,000 per month
Step 3: Apply the 2026 Progressive Rates
Apply the 5-bracket scale to taxable income, calculating tax portion by portion and adding them up.
Continuing Mr. A’s example (monthly taxable income: VND 47,150,000):
- Bracket 1: VND 10,000,000 × 5% = VND 500,000
- Bracket 2: (30,000,000 – 10,000,000) × 10% = VND 2,000,000
- Bracket 3: (47,150,000 – 30,000,000) × 20% = VND 3,430,000
Total PIT payable: 500,000 + 2,000,000 + 3,430,000 = VND 5,930,000
Net take-home pay: 73M – 4.2M (insurance) – 5.93M (PIT) = VND 62,870,000
3. Special Rules for Foreigners and Expatriates in Vietnam
Foreign nationals (expats) and overseas workers follow specific PIT rules in 2026.
- Non-residents: Flat 20% on Vietnam-sourced income, withheld at source.
- Residents: Subject to the same progressive rates as Vietnamese citizens.
Double Taxation Agreements (DTAs) Vietnam has over 80 DTAs (with the US, EU countries, Japan, Singapore, etc.). To claim relief:
- Submit Form NT5/TNCN
- Provide proof of tax residency in your home country
- Claim credit for taxes already paid abroad
Example: A non-resident expat earning VND 50 million/month pays VND 10 million (20%) PIT. With a DTA, the rate may drop to 10–15%.
These rules, plus the 5-year exemption for high-tech experts, make Vietnam attractive for skilled international professionals.
4. Filing and Finalizing Personal Income Tax in Vietnam
PIT filing and finalization are fully online via the General Department of Taxation portal (thuedientu.gdt.gov.vn) or eTax Mobile app.
General deadlines (apply every year):
- Employer finalization (for authorized employees): By the last day of the 3rd month after year-end (usually March 31).
- Individual self-finalization: By the last day of the 4th month after year-end (usually April 30). → If the deadline falls on a holiday or weekend, it shifts to the next working day.
Who must self-file? Individuals with income from two or more sources who do not meet authorization conditions, or those seeking refunds or adjustments.
5. Vina TPT – Your 2026 PIT Solution for Expats & Businesses in Vietnam
Vina TPT is a leading tax advisory firm in Vietnam specializing in Personal Income Tax services for expatriates and foreign-invested companies. Our experienced team provides full support, from 2026 PIT forecasting and calculation to DTA claims and maximum deduction optimization.
Why choose Vina TPT?
- Free initial consultation with clear guidance
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- Full compliance with 2026 regulations to minimize risks
Key services
- PIT finalization for expats with multi-source income
- Assistance with high-tech and investment incentives
- HR training on payroll updates and withholding
Need help with your 2026 Personal Income Tax in Vietnam? Contact Vina TPT today for expert, hassle-free support.