Vietnam raises tax deduction 41% to 15.5 million VND per month

Vietnam's personal income tax deduction climbs to 15.5 million VND per month from the 2026 tax year, up from 11 million VND, a jump of roughly 41% that resets the threshold at which residents start owing tax.

The old floor, the new floor

The taxpayer deduction rises from 11 million VND to 15.5 million VND per month (186 million VND per year) and the per-dependent deduction moves from 4.4 million VND to 6.2 million VND. The change is enacted under Resolution No. 110/2025/UBTVQH15 and applies to tax periods beginning on or after Jan. 1, 2026.

A resident with no dependents now begins owing personal income tax only once monthly income clears 15.5 million VND. One registered dependent pushes that entry point to about 21.7 million VND.

The broader Personal Income Tax Law 2025 (Law No. 109/2025/QH15), passed Dec. 10, 2025, formally takes effect July 1, 2026, though its salary and wage rules apply to the full 2026 fiscal year. It also collapses the progressive bracket structure from seven bands to five, widening the lower brackets so that mid-range earners keep more.

Who this catches

Foreigners present in Vietnam 183 days or more in a calendar year (or across 12 consecutive months from arrival) are treated as tax residents, taxed on worldwide income and can claim the 15.5 million VND deduction plus dependent allowances. Non-residents stay on flat Vietnam-sourced rates and see no benefit until they cross the residency line.

For a foreign employee or long-stay remote worker earning 40 to 60 million VND per month on a local contract, the combined effect of the higher deduction and the compressed brackets shifts a larger slice of income into the 10% and 20% bands. Take-home pay rises without any action required from the employee, since payroll withholding adjusts automatically.

What to do before year-end

Anyone planning to claim dependents should note that the standalone administrative procedure for registering dependents is abolished from Feb. 14, 2026 and folded into first-time tax registration. Existing residents with registered dependents keep them; new arrivals and first-time filers register everything in one step.

Digital nomads sitting near the 183-day line should decide deliberately whether to cross it. Tax residency now brings a meaningfully higher untaxed threshold, but also worldwide-income exposure. Anyone weighing a longer stay can review the residency and tax basics in the Vietnam guide before committing to the second half of the year.