SUMMARY OF PERSONAL INCOME TAX
Chapter I – General Provisions
This chapter includes:
- Focuses on identifying who must pay personal income tax, which incomes are taxable, which incomes are exempt, and the principles of tax administration.
- Taxpayers: Resident and non-resident individuals who earn taxable income in Vietnam.
- Taxable income: Includes 10 major groups such as business income, salaries and wages, investment income, capital transfer, real estate transfer, winnings, royalties, franchising, inheritance/gifts, and other income (digital assets, auctioned license plates, gold bullion, etc.).
- Tax-exempt income: Article 4
- Special exemptions/deductions: Article 5 Article 4. Tax-Exempt Income
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- Income from the transfer, inheritance, or gifting of real estate between the following family relations: husband and wife; biological parents and biological children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; and between siblings.
- Income from the transfer of residential houses, residential land use rights, and assets attached to residential land of an individual who owns only one residential house or residential land plot in Vietnam.
- Income from the value of land use rights allocated by the State to an individual.
- Income of households and individuals directly engaged in producing crops, planted forests, livestock farming, aquaculture, or fishing that has not undergone processing into other products or has only undergone simple preliminary processing; salt production; income from dividends received by members of agricultural cooperatives or unions of cooperatives; income of farmers entering into contracts with enterprises participating in the “Large-Scale Field” model, forest plantation, or aquaculture.
- Income from the conversion of agricultural land allocated by the State to households and individuals for production purposes.
- Income from interest on government bonds, local government bonds, interest from deposits at credit institutions, and interest from life insurance contracts.
- Income from remittances.
- Salary and wage income earned from night work, overtime work, and salary/wage paid for unused annual leave days as prescribed by law.
- Pension income paid by the Social Insurance Fund; income paid by supplementary pension funds or voluntary pension funds.
- Income from scholarships, including:
a) Scholarships funded by the State budget;
b) Scholarships granted by domestic or foreign organizations under their educational support programs.
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- Income from compensation under life insurance and non-life insurance contracts, compensation for occupational accidents, State compensation, and other compensation amounts as prescribed by law.
- Income received from charitable organizations and funds that are legally established or recognized by competent State authorities, operating for charitable or humanitarian purposes and not for profit.
- Income received from foreign aid for charitable or humanitarian purposes, provided in governmental or non-governmental forms and approved by competent State authorities.
- Salary and wage income of Vietnamese seafarers working for foreign shipping companies or Vietnamese shipping companies engaged in international transport.
- Income of individuals who are ship owners, individuals with the right to use ships, and individuals working on ships from activities providing goods and services directly serving offshore fishing operations.
- Income from the first transfer of certified greenhouse gas emission reduction results, carbon credits issued to individuals; income from interest on green bonds; income from the first transfer of green bonds after issuance.
- Salary and wage income earned from performing scientific, technological, and innovation tasks.
- Income from copyright related to scientific, technological, and innovation tasks when the results are commercialized in accordance with laws on science and technology, innovation, and intellectual property.
- Income of individual investors and experts from startup projects, founders of innovative startups, and individual investors contributing capital to venture capital funds.
- Salary and wage income of foreign experts working on non-refundable ODA-funded programs or projects, foreign NGO-funded programs or projects in Vietnam; Vietnamese individuals working at representative offices of international organizations under the United Nations system in Vietnam; individuals participating in United Nations peacekeeping forces.
- Income remaining after corporate income tax has been paid by individuals who are owners of private enterprises or owners of single-member limited liability companies.
- The Government shall provide detailed regulations for this Article.
Article 5. Other Cases of Tax Exemption and Tax Reduction
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- A taxpayer who faces difficulties due to natural disasters, epidemics, fires, accidents, or serious illnesses that affect their ability to pay tax shall be entitled to a tax reduction corresponding to the level of damage, but not exceeding the amount of tax payable.
- Personal income tax shall be exempt for a period of five (05) years for salary and wage income earned by individuals who are high‑quality digital industry personnel under the following circumstances:
a) Income from digital industry projects operating in concentrated digital technology zones;
b) Income from research and development projects, production of key digital technology products, semiconductor chips, and artificial intelligence systems;
c) Income from activities related to training digital industry human resources.
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- Personal income tax shall be exempt for a period of five (05) years for salary and wage income earned by individuals who are high‑tech personnel engaged in research and development of high technology or strategic technology included in the List of High Technologies prioritized for development investment, the List of Strategic Technologies, or the List of Strategic Technology Products as prescribed by the Law on High Technology.
- Personal income tax shall be exempt for income from the transfer of open‑end fund certificates established under the securities laws, provided that such certificates have been held for two (02) years or more from the date of purchase.
- Personal income tax shall be reduced by 50% for dividends distributed to individual investors from securities investment funds or real estate investment funds established under the Law on Securities, within the period prescribed by the Government.
- The Government shall provide detailed regulations for this Article.
Chapter II – Tax Bases for Resident Individuals
This chapter specifies how tax is calculated for each type of income earned by resident individuals.
1. Business income
• Annual revenue ≤ 500 million VND → no personal income tax.
• Above this threshold → tax = taxable income × tax rate.
Tax rates by annual revenue:
• ≤ 3 billion VND: 15%
• 3–50 billion VND: 17%
• 50 billion VND: 20%
Individuals with revenue ≤ 3 billion may choose to pay tax based on percentage of revenue (0.5% – 5%).
Real estate leasing: tax = (revenue exceeding 500 million) × 5%.
2. Salary and wage income
Tax = taxable income × progressive tax schedule.
Taxable income = total taxable income – compulsory insurance – voluntary pension contributions – family deductions – charitable/medical/education deductions.
Family deductions:
• Taxpayer: 15.5 million VND/month
• Dependent: 6.2 million VND/month
3. Progressive tax schedule
Five brackets: 5% → 10% → 20% → 30% → 35%.
4. Investment income
Tax rate: 5% per occurrence.
5. Capital transfer income
Tax rate: 20% on taxable income (sale price – purchase price – expenses). If purchase price cannot be determined → 2% × sale price. Securities: 0.1% × sale price.
6. Real estate transfer
Tax = 2% × sale price.
7. Winnings
Tax = 10% × amount exceeding 20 million VND.
8. Royalties / Franchising
Tax = 5% × amount exceeding 20 million VND.
9. Inheritance, gifts
Tax = 10% × amount exceeding 20 million VND.
10. Other income
Some types: 5% on amount exceeding 20 million. Digital assets, gold bullion: 0.1% × sale price.
Chapter III – Tax Bases for Non-Resident Individuals
General principle: tax is calculated based on percentage of revenue or sale price, and family deductions do not apply.
• Business income: 1% – 5% depending on sector.
• Salary and wages: 20% × total income earned in Vietnam.
• Investment income: 5%.
• Capital transfer: 20% (or 2% if purchase price cannot be determined).
• Securities: 0.1%.
• Real estate: 2%.
• Royalties / Franchising: 5% on amount exceeding 20 million.
• Winnings / Inheritance / Gifts: 10% on amount exceeding 20 million.
• Other income: 5% or 0.1% depending on type.
Chapter IV – Implementation Provisions
• The law takes effect on July 1, 2026.
• Rules for business income and salary/wage income of resident individuals apply starting tax year 2026.
• The previous Personal Income Tax Law (2007 and amendments) is repealed.
• If other laws (e.g., Law on the Capital City) provide more favorable tax incentives, taxpayers may choose the most beneficial option.