Vietnam has implemented significant tax and accounting reforms and given the major changes occurring within a short period. The Personal Income Tax Law 109/2025/QH15 (Law 109) was approved by the National Assembly on 10 Dec 2025. The provisions relating to business income and employment income for tax residents apply for the 2026 tax year meanwhile the rest will take effect from 1Jul2026.
Below are Key changes in employment income that come into effect on 1Jan2026:
1. Progressive brackets for tax residents: The number of brackets has been reduced from seven to five meanwhile the highest rate of 35% is applied to monthly income exceeding VND100 million (previously VND80 million).
| Bracket | Monthly assessable income | Tax Rate (%) |
| 1 | Up to VND10 million | 5 |
| 2 | > VND10 million–VND30 million | 10 |
| 3 | > VND30 million–VND60 million | 20 |
| 4 | > VND60 million–VND100 million | 30 |
| 5 | Over VND100 million | 35 |
2. Increase in Family Relief:
- Personal relief from VND11 million to VND15.5 million per month
- Dependent relief from VND4.4 million to VND6.2 million per month for each qualified one.
3. Additional allowable deductions:
- Qualifying expenses for healthcare, education, and training for taxpayers and dependents
- Contributions to supplementary pension insurance in accordance with the social insurance law
- Life insurance premiums, subject to limits set by the Government
4. Expanded personal income tax (PIT) exemptions: Income from night shift wages, overtime, and unused paid leave as prescribed by law are now fully exempt from PIT.
To get the original and English translated PIT Law 109, just email to consulting@vietnammanual.com.