Notable new point of the Personal Income Tax Law 2026

The Law on Personal Income Tax (PIT) revised in 2026, effective from July 1, 2026, is considered one of the most important tax reforms in recent years.

These changes not only adjust the tax rate, but also have a direct impact on:

• salaried employees;
• experts, senior personnel;
• business households, business individuals;
• technology and innovation sectors.

Below are the notable new points and practical impact on taxpayers.

1. Shorten the progressive tax schedule: from 7 steps to 5 steps

One of the most important changes of the PIT 2026 is the adjustment of the partial progressive tariff in the direction of simplicity and distance between the tax levels.

New tariffs apply from 01/07/2026

tax level	Taxable income/month	Tax
1	up to 10 million dong	5%
2	Over 10 – 30 million VND	10%
3	Over 30 – 60 million VND	20%
4	Over 60-100 million VND	30%
5	Over 100 million VND	35%

Meaning of change

The reduction of tax levels helps:

• Simplify tax calculation;
• Limit the situation of ‘jumping tax’ when income increases due to inflation or periodically adjust wages;
• Reduce tax pressure on middle and good income groups.

Notably, the highest tax rate of 35% is raised from 80 million VND/month to over 100 million VND/month.

This has a positive impact on:

• expert;
• middle and senior management;
• high-income workers in big cities.

2. Strongly increase the family deduction

The new law officially ‘laws up’ the level of family deduction instead of prescribed by resolution as before, thereby increasing stability and transparency in the application of the law.

New discount

• Discounts for taxpayers themselves:
  → 15.5 million VND/month
  (increased from 11 million VND)
• Discounts for each dependent:
  → 6.2 million VND/month
  (increased from 4.4 million VND)

Actual impact

The increase in the deduction helps to expand the threshold of non-taxable income.

Example:

• Individuals without dependents with incomes below about 17 million VND/month will almost not incur PIT obligations.

This is considered a necessary adjustment in the context:

• Increased living costs;
• Financial pressure in urban areas is increasing;
• Actual income is affected by inflation.

3. Big change for business households and individuals

The Law on Personal Income 2026 adds more flexible mechanisms for business households and individuals.

Adjustment of tax-free revenue threshold

The taxable revenue threshold is no longer ‘closed’ in the law but is assigned by the Government to flexibly regulate each economic period.

According to the current orientation:

• Tax-free revenue can be up to 500 million VND/year or higher depending on actual conditions.

Choose a tax method

For individuals/business households with revenue from over 500 million VND to 3 billion VND/year, can choose:

Method 1:

tax as a percentage of revenue.

Method 2:

Tax calculation on real income:

Taxable income = sales – valid expenses

The expected tax rate is about 15%.

Meaning of change

This is considered a remarkable reform step because:

• solving inadequacies for models with large revenue but low profit;
• approach the tax calculation method of the enterprise;
• Create more fairness among business entities.

However, if the option is calculated according to actual income, the taxpayer will have to:

• Manage accounting books;
• storing invoices and vouchers;
• Proof of valid expenses when the tax authority checks.

4. Add more tax-free income

The new law adds tax incentives to attract high-quality human resources and promote innovation.

Some notable tax exemptions

5 years tax exemption for:

• income from salaries and wages of high-tech human resources;
• digital technology industry human resources;
• Participants in strategic technology research and development.

Tax exemption for:

• Income from science and technology tasks has been commercialized.

policy meaning

These incentives show the orientation:

• attract talent;
• encourage research and innovation;
• support the development of the digital economy and high technology.

5. Some notes and recommendations for taxpayers

For workers and experts

Need to review:

• income structure;
• salary and bonus policy;
• Allowances and benefits

To make the most of new offers and discounts.

For business households and individuals doing business

should proceed:

• financial simulation;
• Comparison between the two tax calculation methods;
• Assess the ability to manage accounting books

before choosing the best option.

For businesses

Businesses need to update:

• PIT withholding process;
• labor contract;
• HR policy and remuneration

To comply with the new regulations from July 1, 2026.

The Personal Income Tax Law 2026 is not only a technical adjustment of the tax rate, but a systematic reform with a focus:

• reduce tax pressure on employees;
• increase fairness;
• support business households;
• Encourage innovation and high-tech development.

In the context of many tax policies that are drastically changing from 2026, taxpayers and businesses need to actively update new regulations, especially decrees and guiding circulars, to limit risks and optimize tax obligations legally.