Southeast Asia Information Port (www.dnyxxg.com) reports that a new personal income tax deduction and progressive tax rate table will be officially implemented from January 1, 2026, thereby alleviating the personal income tax burden for millions of people.
According to regulations, workers currently need to pay mandatory social security contributions at 10.5% of their social security contribution wage, with the contribution base capped at 20 times the minimum wage. Therefore, a single person with a monthly income of 17 million VND will be exempt from personal income tax starting next year (15.5 million VND + 1.55 million VND = 17.05 million VND), a reduction of 210,000 VND per month compared to the current regulations. At the same time, the deduction for each dependent will increase from 4.4 million VND per month to approximately 6.2 million VND (an increase of approximately 40.9% compared to the current level). Therefore, an individual with one dependent and a monthly income of 24 million VND will also be exempt from personal income tax, a reduction of 610,000 VND per month compared to the current regulations.
For those with higher incomes, in addition to the aforementioned deductions, the progressive tax rate table for individual income tax has been adjusted from seven levels to five. This adjustment will further reduce the tax burden for many taxpayers compared to the current regulations.
A major highlight of the Amended Individual Income Tax Law is that it allows employees to deduct medical and educational training expenses for themselves and their dependents from their taxable income, according to government-stipulated standards.
Including medical and educational expenses in the scope of pre-tax deductions for individual income tax under the Individual Income Tax Law is a new development that helps taxpayers deduct essential basic living expenses. (End)
