Article summary
Decree No. 253/2026/ND-CP guides the 2025 Personal Income Tax Law and introduces important changes for payroll, employee deductions, PIT withholding, business individuals and newly regulated income. The Decree is effective from 1 July 2026, with employment and business income applying from tax period 2026.
01.Background and Effective Date
On 30 June 2026, the Government issued Decree No. 253/2026/ND-CP guiding several articles of Personal Income Tax Law No. 109/2025/QH15. The Decree takes effect from 1 July 2026, while business income and wages/salaries of resident individuals apply from the 2026 tax period.
The new framework affects payroll, employee benefits, dependant deductions, withholding, business individuals and several new categories of investment and digital-economy income.
02.Key Changes for Wages and Salaries
Progressive tax schedule reduced from 7 brackets to 5
| Rate | Monthly taxable income — from tax period 2026 |
|---|---|
| 5% | Up to VND 10 million |
| 10% | Over VND 10–30 million |
| 20% | Over VND 30–60 million |
| 30% | Over VND 60–100 million |
| 35% | Over VND 100 million |
The 15% and 25% intermediate brackets are removed, widening the ranges between brackets while the top rate remains 35%.
Personal & dependant deductionsPersonal deduction increases to VND 15.5 million/month and dependant deduction to VND 6.2 million/month.
Mid-shift and lunch allowanceFrom 1 July 2026, only the portion exceeding VND 1.2 million/person/month is included in taxable income when the allowance is paid in cash. Employer-organised meals remain outside PIT taxable income under the stated forms.
Overtime, leave and severanceNight-work/overtime pay, payment for untaken leave and severance/job-loss allowances receive amended exemptions within the conditions and statutory limits set out in the new rules.
Voluntary pension & life insuranceThe maximum deduction is raised to VND 3 million/person/month, including employer and employee contributions.
03.New Deductions and Dependant Rules
Decree 253 introduces new criteria for dependants and, for the first time, brings qualifying medical and education costs into the PIT deduction mechanism.
01
Medical treatment costsUp to VND 23 million/year at domestic medical facilities within the relevant health-insurance scope, subject to supporting-document conditions.
02
Education & training costsUp to VND 24 million/year at domestic education and training institutions for resident taxpayers and dependants.
03
Dependant criteriaA dependant unable to work must generally have reduced working capacity of 81% or more; other dependants must live with the taxpayer and meet support conditions.
04
Registration deadlineDependants must be registered before 31 December of the relevant tax year.
Documentation matters: the newsletter notes invoices and valid supporting documents, additional medical documentation where applicable, and restrictions where costs have been paid from other sources.
04.Tax Incentives for Key Talent
The Decree expands PIT incentives for science, technology and innovation activities. It also provides a 5-year PIT exemption for qualifying high-quality digital-technology industry personnel and high-tech personnel under Articles 41 and 42.
Enterprises employing eligible personnel should review the qualifying activities, project status and supporting records before applying the exemption.
05.PIT Declaration and Withholding
10% withholding thresholdThe per-payment threshold for individuals without a labour contract or with a contract under 3 months increases from VND 2 million to VND 5 million.
Casual incomeWhere monthly casual income does not exceed VND 15 million and 10% has been withheld, the newsletter notes that this income need not be finalised under the stated rule.
Foreign-party wage cost reimbursementThe Vietnamese party is responsible for withholding, declaring on behalf of and paying PIT.
Foreign-currency incomeThe applicable exchange rate depends on whether the income-receiving account is overseas or in Vietnam.
06.Business, Transfers and Other Income
For business individuals, the tax-exempt revenue threshold rises to VND 1 billion/year. Above the threshold, the calculation method varies by revenue scale as described in the newsletter.
The taxable threshold for royalties, franchising, prizes, inheritance and gifts is raised from VND 10 million to VND 20 million. The framework also adds or clarifies PIT treatment for national “.vn” domain names, carbon credits, auctioned vehicle licence plates and digital assets.
Digital economy: digital assets are identified as a newly taxable category, with the newsletter stating a 0.1% rate on transfer value for digital assets.
07.Investment and Green Finance Incentives
Open-ended fund certificatesPIT exemption where qualifying certificates are held for at least 2 years from the purchase date.
Distributed fund profits50% PIT reduction for 5 years, from 1 July 2026 to 30 June 2031, on profits from securities investment funds and real-estate investment funds.
Green bondsInterest and first transfer of qualifying green bonds are PIT-exempt.
Carbon creditsFirst transfer of carbon credits and emission-reduction results is PIT-exempt under the stated rules.
08.What Should Enterprises Do?
Enterprises should update payroll and HR policies for the 2026 tax period, especially mid-shift meals, overtime/night-shift pay, leave, severance, voluntary pension and life insurance. Dependant registration and supporting documents for medical and education deductions should also be reviewed.
Businesses should also assess withholding procedures, foreign-party payroll reimbursements, and any exposure to newly regulated digital assets, carbon credits or investment incentives.
Need support with PIT, Payroll or Compliance?
JPA Vietnam can support enterprises with payroll review, PIT compliance assessment, social-insurance compliance, tax-audit preparation and related advisory.
TÓM TẮT BÀI VIẾT VỚI AI:
