What the tax law changes

Vietnam’s PIT overhaul adds new brackets for expats

What the tax law changes

Vietnam’s Personal Income Tax Law No. 109/2025/QH15 takes effect July 1, 2026 and replaces the 2007 framework. The law cuts resident employment brackets from 7 to 5, with rates from 5% to 35%, while non-residents stay at a flat 20% on Vietnam-sourced income.

The new rules also raise key deductions. The monthly personal deduction rises to 15.5 million VND and the dependent deduction to 6.2 million VND, both effective Jan. 1, 2026. The household-business revenue exemption also climbs to 500 million VND a year.

Who gets pulled into the filing rules

Tax residents, including expats and long-stay remote workers, must declare worldwide income if they spend 183 days or more in Vietnam in a calendar year or a 12-month period. That can include foreign earnings, even when the money is paid into accounts outside Vietnam.

Non-residents are taxed only on Vietnam-sourced income. Digital nomads who stay under the 183-day line and meet the other conditions for foreign clients and foreign payment accounts may owe no Vietnam PIT on that income, though crossing the threshold changes the calculation fast. nomad news

What to sort out before the rules kick in

Expats should keep proof of tax residence outside Vietnam, such as home-country tax certificates, to avoid being treated as residents by mistake. Employers will need to update payroll systems for the higher deductions and new brackets before the 2026 tax period starts.

The law also adds exemptions for night-shift and overtime pay, unused annual leave salaries and some foreign-assignment and technical-work income. Read our full Vietnam guide for the complete picture.