The draft Law on Personal Income Tax (amended) has been completed with many notable contents.

The Ministry of Finance said that the draft Law on Personal Income Tax (amended) has been submitted by the Government to the National Assembly. Based on the review opinions of the National Assembly's Economic and Financial Committee, the opinions of National Assembly deputies discussing in the Group on the afternoon of November 5, 2025, and in the hall on the afternoon of November 19, 2025, the drafting agency has conducted thorough research and plans to report to the Government on the plan to complete the draft Law with outstanding contents.

On adjusting family deduction levels

The proposed personal income tax rate is reduced to 5 levels instead of 7 levels. Photo: Ngoc Ngan

On October 17, 2025, the National Assembly Standing Committee passed a Resolution on adjusting the personal income tax (PIT) family deduction level. Accordingly, the deduction level for the taxpayer himself/herself was increased to 15.5 million VND/month, and for each dependent to 6.2 million VND/month.

With this new family deduction, individuals do not have to pay tax with an income of 17 million VND/month (if no dependents) or 24 million VND/month (if 1 dependent) or 31 million VND/month (if 2 dependents).

Progressive tax schedule

The progressive tax schedule applies to resident individuals with income from salaries and wages in the direction of reducing the number of tax rates from 7 to 5 and widening the gap between the rates as follows:

Based on the opinions of National Assembly deputies, the drafting agency plans to report to the Government to accept and complete the progressive tax schedule in the direction of being able to study and consider the option of adjusting the tax rates from 15% and 25% to 10% and 20% to equalize the tax rates of the schedule.

With this new tax schedule, all individuals currently paying taxes at all levels will have their tax liability reduced compared to the current tax schedule.

In addition, the new tax schedule has also overcome the sudden increase at some levels (level 2, level 3) as proposed in the previous draft Law, ensuring more reasonableness of the tax schedule.

On tax-exempt and tax-reduced income

The Draft Law supplements a number of provisions on tax exemption and reduction of personal income tax to institutionalize the Party's policies and guidelines and the State's laws in Resolutions No. 57, No. 71, No. 72 and No. 68 of the Politburo and a number of recently issued laws.

At the same time, amend and complete regulations on some tax-exempt incomes, such as: Income paid by supplementary pension insurance funds, voluntary pension funds, wages for night work, overtime, wages paid for days without leave, severance pay, unemployment benefits paid by enterprises, interest on local government bonds, etc.

The draft Law also adds provisions that taxpayers are allowed to deduct certain expenses during the year at appropriate levels, such as medical and educational expenses, before calculating taxes, and assigns the Government to provide detailed regulations to ensure flexibility and suitability with the socio-economic situation.

On taxes for business individuals

According to the current Personal Income Tax Law, the revenue level not subject to personal income tax is 100 million VND/year or less. This level is being applied consistently with the value added tax (VAT) of business households and individuals, which is also 100 million VND/year or less and is not subject to VAT.

On November 26, 2024, the National Assembly passed the VAT Law No. 48/2024/QH15, accordingly, adjusting this level, raising it from VND 100 million/year to VND 200 million/year and applying from January 1, 2026. To ensure consistency and uniformity in the legal system, the Government submitted to the National Assembly to raise the annual tax-free revenue of business individuals to VND 200 million/year.

Based on listening to the opinions of the reviewers and delegates, the Ministry of Finance said that it will continue to study and adjust this level to be appropriate, ensuring relative fairness for individuals with income from salaries and wages, and is also expected to amend the Law on Value Added Tax to increase the level of revenue not subject to VAT to ensure consistency.

Currently, the Ministry of Finance plans to report to the Government a plan to adjust the non-taxable revenue of individual businesses to ensure it is consistent with the actual situation, demonstrating the State's sharing with households and individual businesses with revenue of 3 billion or less, towards the goal of social security.

In addition, the Ministry of Finance will continue to research tax calculation methods for households and individuals with revenue of 3 billion or less.

To ensure consistency and reflect the true nature of income tax, the Ministry of Finance plans to report to the Government a plan to collect tax on income (revenue - expenses) for all individuals with revenue above the non-taxable threshold. Accordingly, it is expected to add a provision: Individuals doing business with annual revenue above the non-taxable threshold up to 3 billion VND shall pay tax at the tax rate corresponding to corporate income tax applicable to enterprises with revenue below 3 billion VND.

In case an individual business has a revenue of less than 3 billion VND and cannot determine the cost, they will continue to pay tax at the current rate on revenue (with tax rates of 0.5%, 1%, 2% depending on the industry) and these households and individuals will be deducted according to the non-taxable threshold before calculating tax, not calculating tax from the first revenue as current regulations.

Source: https://hanoimoi.vn/du-an-luat-thue-thu-nhap-ca-nhan-sua-doi-duoc-hoan-thien-voi-nhieu-noi-dung-dang-chu-y-724576.html