Vietnam Personal Income Tax Law updates for 2026 and 2027

The Personal Income Tax Law No. 109/2025/QH15, passed by the National Assembly on December 10, 2025, introduces new regulations for calculating tax on salaries and wages. While the law generally takes effect on July 1, 2026, provisions regarding income from salaries and wages for resident individuals will apply starting from the 2026 tax period.

Under the new law and Resolution No. 110/2025/UBTVQH15, resident individuals—defined as those present in Vietnam for 183 days or more in a calendar year or 12 consecutive months, or those with a permanent residence—will use a progressive tax rate scale. Taxable income is determined by taking total taxable income and subtracting social, health, and unemployment insurance, as well as applicable family deductions.

Non-resident individuals are subject to a flat 20% tax rate on income earned in Vietnam and are not eligible for family deductions or progressive tax scales. The law specifies that taxable income includes salaries, wages, remunerations, and other benefits, though certain allowances for meals, clothing, or business travel may be exempt if they meet specific legal criteria.