61 Numerous changes to tax regulations for individuals and household businesses.

Deputy Minister of Finance Do Thanh Trung introduced some of the outstanding new points of the Personal Income Tax Law. The law will take effect from July 1, 2026, except for regulations related to income from business, salaries, and wages of resident individuals, which will apply from the 2026 tax year.

According to the drafting agency, the law has amended and improved regulations on the calculation of tax and taxable income for each type of income. It has added regulations on other income groups subject to personal income tax, such as income from the transfer of Vietnamese national domain names ".vn"; income from the transfer of greenhouse gas emission reduction results, carbon credits; income from the transfer of gold bars; income from the transfer of vehicle license plates won at auction according to the law; Income from the transfer of digital assets…

Overtime and night shift wages are exempt from income tax.

According to the drafting agency, the law has comprehensively revised and improved regulations on taxable income and the method of calculating tax for each income group. Notably, the scope of taxable income has been expanded, adding many new types arising in practice, such as income from the transfer of national ".vn" domain names; transfer of greenhouse gas emission reduction results and carbon credits; transfer of gold bars; transfer of auctioned vehicle license plates; and transfer of digital assets.

In parallel with expanding the taxable scope, the law also significantly increases the amount of tax-exempt income, reflecting the direction of encouraging innovation, high-tech development, and a green economy.

Accordingly, income from salaries and wages when performing scientific, technological, and innovative tasks is exempt from tax. Individuals who are high-quality digital technology professionals, or high-tech professionals involved in research and development of high-tech and strategic technologies, are exempt from salary and wage taxes for 5 years.

The law also exempts tax on interest on local government bonds; all night work and overtime pay; and wages paid for days not taken as prescribed leave. Pension payments from the Social Insurance Fund, income from supplementary pension funds, and voluntary pension funds – whether paid monthly or in a lump sum – continue to be tax-exempt.

Regarding sustainable development, the law adds tax exemptions for income from the first transfer of greenhouse gas emission reduction results and carbon credits; income from interest on green bonds; and income from the first transfer of green bonds after issuance.

In addition, the transfer of open-ended fund certificates held for two years or more is tax-exempt, and there is a 50% reduction in personal income tax on individual investor profits from securities and real estate investment funds for a period stipulated by the Government.

Individuals with annual revenue exceeding 500 million VND to 3 billion VND are subject to a 15% tax rate on their income.

A significant change is the adjustment of the tax-exempt revenue threshold for household and individual businesses from 200 million VND to 500 million VND per year, allowing for the deduction of this amount before calculating the tax based on a percentage. The law also adds a method of calculating tax on income (revenue minus expenses) for household and individual businesses, instead of only calculating it as a percentage of revenue as before.

According to the new regulations, household and individual businesses with annual revenue exceeding 500 million VND to 3 billion VND are subject to a 15% tax rate on their income. For revenues between 3 billion and 50 billion VND, a 17% tax rate applies; for revenues over 50 billion VND, a 20% tax rate applies.

Specifically, for groups with revenues between 500 million and 3 billion VND, the tax calculation method can be chosen based on income or a percentage of revenue. The tax rate for certain activities providing digital information content products and services related to entertainment and video games has also been adjusted from 2% to 5%.

Increased Personal Allowances

Regarding personal allowances, the 2025 Personal Income Tax Law has increased the personal allowance for the taxpayer to 15.5 million VND/month (instead of the current 11 million VND), and the allowance for each dependent to 6.2 million VND/month (instead of the current 4.4 million VND).

According to the law, personal deductions are amounts deducted from taxable income before calculating tax on income from salaries and wages of resident individual taxpayers.

The personal deductions include a deduction of VND 15.5 million/month (VND 186 million/year) for the taxpayer and a deduction of VND 6.2 million/month for each dependent.

Based on fluctuations in prices and income, the Government is submitting to the National Assembly Standing Committee a proposal to adjust these personal deductions without requiring adjustments based on a 20% increase in the Consumer Price Index (CPI) as currently stipulated. This aims to ensure flexibility and adaptability to the socio-economic situation in each period.

In addition, the new law has adjusted the progressive tax rate schedule applied to resident individuals with income from salaries and wages, reducing the number of tax brackets from 7 to 5 and widening the gap between the brackets.

Reforming Tax Management Thinking

Regarding the 2025 Tax Management Law, it will take effect on July 1, 2026. However, the provisions in Article 13 and the use of electronic invoices by household businesses and individual businesses in Article 26 will take effect on January 1, 2026, in line with the policy of abolishing lump-sum tax as stipulated in Resolution No. 68 and Resolution No. 198.

The Deputy Minister of Finance stated that the 2025 Tax Management Law adds the principle of tax authorities managing taxpayers by group. This is an important legal basis for tax authorities to shift from the previous functional tax management method to a management method based on taxpayer categories combined with functional functions.

The law also adds provisions for household businesses and individual businesses to declare and calculate taxes based on a percentage of revenue, with tax rates and calculation methods as stipulated in tax laws. Tax authorities will assist in tax declarations using their databases and information provided by taxpayers.

With the Law amending and supplementing several articles of the Value Added Tax Law, effective from January 1, 2026, the amended law stipulates that the VAT-exempt revenue for household and individual businesses is VND 500 million/year or less, in line with the VAT exemption level of the 2025 Personal Income Tax Law.

The law also removes the provision on the lump-sum tax method for household and individual businesses in Clause 3, Article 12 of the Value Added Tax Law to implement Resolution No. 68 and to align with the provisions of tax management law.

Simultaneously, the regulation on tax refund conditions has been removed (buyers are only entitled to a tax refund when the seller has declared and paid the tax).

"The abolition of this regulation contributes to shortening the tax refund time for businesses, ensuring the proper responsibilities and separate rights of both the buyer and the seller. Tax refunds are implemented uniformly according to the law on tax management, ensuring efficiency and strictness," said the Deputy Minister of Finance.

Source: baochinhphu.vn