On the 10th of December 2025, the National Assembly issued the new Law No. 109/2025/QH15 or Law on Personal Income Tax 2025 (Law on PIT 2025). This Law is set to take effect on the 1st of July 2026 while its provisions on incomes from business activities and salaries or wages of tax residents have already taken effect since 1st January 2026. Below are some of the notable highlights from this Law:
1. Addition of other taxable incomes
In addition to the taxable incomes already stipulated under the previous Law on PIT 2007 amended, supplemented 2024, the Law on PIT 2025 introduces several additional types. These are grouped under the category of “other taxable incomes”, which includes the following:
- Income from transfer of Vietnamese internet domain “.vn”;
- Income from transfer of greenhouse gas emission reduction results and carbon credits;
- Income from transfer of license plates obtained via auction in accordance with the law;
- Income from transfer of digital properties;
- Income from transfer of gold
Subsequently, the tax rates for tax residents and tax non-residents earning the taxable incomes above are as follows:
| Taxable Incomes | Tax rate (%) |
| Transfer of Vietnamese internet domain “.vn” | 5 |
| Transfer of greenhouse gas emission reduction results and carbon credits | 5 |
| Transfer of license plates obtained via auction in accordance with the law | 5 |
| Transfer of digital properties | 0.1 |
| Transfer of gold bars | 0.1 |
2. Changes to personal income tax (PIT) on income from individual business activities
For tax residents: The new Law on PIT 2025 which has now been amended by Law No. 09/2026/QH16 since 24 April 2026 stipulates that the yearly revenue threshold for PIT on income from individual business activities shall be decided by the Government.
That said, the Law on PIT 2025 also revises the applicable tax rates and their method of application as follows:
| Revenue per year (VND million) | Tax rate (%) |
| Between over the threshold decided by the Government and 3,000 | 15 |
| Between over 3,000 and 50,000 | 17 |
| Over 50,000 | 20 |
The tax rates shown above shall be applied only to the profit after deduction of costs relating to the business activities from the total yearly revenue.
Alternatively, tax residents with total yearly revenue between over the threshold decided by the Government and equal to or under VND 3,000 million may also choose the tax rates below corresponding to each type of business activity instead:
| Type of business | Tax rate (%) |
| Distribution and supply of goods | 0.5 |
| Services, construction without materials
Property rental, insurance agent, lottery agent, multi-level sales agent |
2
5 |
| Manufacture, transportation, services related to goods, construction with materials | 1.5 |
| Supply of digital entertainment goods and services, video games, movies, photos, music, advertisements | 5 |
| Others | 1 |
These tax rates are exclusively and directly applied to the surplus amount of yearly revenue over the threshold decided by the Government.
Notwithstanding total yearly revenue, income from real estate rental shall be applied with only a single tax rate as below and such tax rate is exclusively and directly applied to the surplus amount of yearly revenue over the threshold decided by the Government:
| Type of business | Tax rate (%) |
| Real estate rental | 5 |
For tax non-residents: The adjusted applicable tax rates for each type of business activity are as follows:
| Type of business | Tax rate (%) |
| Distribution and supply of goods | 1 |
| Services, construction without materials | 5 |
| Manufacture, transportation, services related to goods, construction with materials | 2 |
| Supply of digital entertainment goods and services, video games, movies, photos, music, advertisements | 5 |
| Others | 2 |
These rates are applied directly to the total amount of income the tax non-resident received from the sale of goods, processing activities, and the provision of services, including subsidies, surcharges, and additional charges to which the tax non-resident is entitled, regardless of whether payment has actually been received. Such amount also includes expenses paid on behalf of the tax non-resident by the purchaser of goods or services that are not subsequently reimbursed.
3. Changes to PIT on income from salaries or wages of tax residents
Arguably, the most notable change introduced by the new Law on PIT 2025 is the restructuring of the progressive tax rate schedule applicable to tax residents’ income from salaries or wages. Specifically, the number of tax brackets has been reduced from the previous 7 to just 5, accompanied by corresponding adjustments to the tax rates applicable to each bracket, as follows:
| Tax grade | Taxed income per year (VND million) | Taxed income per month (VND million) | Tax rate (%) |
| 1 | Up to 120 | Up to 10 | 5 |
| 2 | Between over 120 and 360 | Between over 10 and 30 | 10 |
| 3 | Between over 360 and 720 | Between over 30 and 60 | 20 |
| 4 | Between over 720 and 1,200 | Between over 60 and 100 | 30 |
| 5 | Over 1200 | Over 100 | 35 |
Provisions on family allowances from Resolution 110/2025/UBTVQH15 of the National Assembly Standing Committee dated 17th of October 2025 on the adjustment of PIT’s family allowances are also incorporated into the Law on PIT 2025 as below:
| Subject | Deduction per month (VND million) |
| Each taxpayer | 15.5 |
| Each dependent | 6.2 |
4. Increase in PIT threshold for some taxable incomes
Instead of VND 10 million as previously in the Law on PIT 2007 amended, supplemented 2024, the Law on PIT 2025 stipulates a new threshold of VND 20 million applicable for incomes from prize winnings, copyright, commercial franchising, inheritance, and gifts.
5. New cases eligible for PIT exemption and reduction
Under the Law on PIT 2025, the cases below are to be eligible for PIT exemption:
5-year exemption:
- Income from salaries or wages of high-quality digital technology industry personnel in the following cases:
- Income from digital technology industry projects within concentrated digital technology zones;
- Income from research and development projects, or the production of key digital technology products, semiconductor chips, and artificial intelligence systems;
- Income from training of digital technology industry human resources.
- Income from salaries or wages of high-technology personnel in research and development of high technology or strategic technology listed in the Schedule of high technology prioritized for investment and development, or the Schedule of strategic technology and strategic technology products, in accordance with the laws on high technology.
2-year exemption:
Income from transfer of open-ended fund certificates established in accordance with the laws on securities, provided that such certificates have been held for at least 2 years from the date of purchase.
50% reduction:
Income from dividends distributed to individual investors from securities investment funds and real estate investment funds established in accordance with the Law on Securities within the period prescribed by the Government.
If you would like to obtain further information, please do not hesitate to contact us. For more information, please contact:
FIDAL ASIATTORNEYS
Duong Dai Building 6th Floor
9B Thai Van Lung, Sai Gon Ward, Ho Chi Minh City, Vietnam
It is noted that this article does not constitute a professional legal advice and only constitutes a public information on a general matter. Feel free to contact us for further assistance for any specific case.
