Amended Law On Personal Income Tax 2025: Key Changes And Notable Points

At the session of the XV National Assembly, the amended Law on Personal Income Tax (PIT) 2025 was officially passed. This amendment is considered a crucial adjustment to better align with current income levels, ensure fairness in income regulation, and reduce the tax burden on low-and-middle-income earners.

Compared to the current PIT Law, the 2025 amended law focuses on adjusting tax subjects, calculation methods, progressive tax tariffs, family circumstance deductions, and adding regulations for new types of income arising in practice.

1. Raising the Taxable Threshold for Business Households and Individuals

The amended PIT Law raises the annual revenue threshold for tax exemption for business households and individuals from 200 million VND to 500 million VND. According to the new regulations, individuals with business revenue not exceeding 500 million VND/year will not incur personal income tax obligations.

This adjustment directly affects small-scale business individuals and self-employed activities. The new regulation significantly reduces the number of individuals required to declare and pay taxes, while more accurately reflecting actual income after basic living expenses.

2. Expanding Tax Calculation Methods for Business Individuals

For business individuals with annual revenue from 500 million to 3 billion VND, the amended law allows the choice of calculating tax based on taxable income at a rate of 15%, alongside the revenue-based percentage method.

This regulation enables business individuals to deduct reasonable and valid expenses when determining taxable income, thereby reflecting actual business efficiency more accurately. For industries with high input costs or low-profit margins, this new method helps prevent tax obligations that are disproportionate to the actual profit earned.

3. Adjusting the Partially Progressive Tax Tariff for Income from Salaries and Wages

One of the key amendments in the 2025 PIT Law is the adjustment of the partially progressive tax tariff from 7 brackets down to 5 brackets. This reduction aims to simplify tax calculation and adjust taxable income ranges to suit current income levels.

The following table compares the current progressive tax tariff and the tariff under the 2025 Amended Law:

Merging intermediate tax brackets and expanding income ranges at each level helps reduce regulation on low-and-middle-income earners, making the tariff simpler and easier to apply in practice.

4. Legalizing Family Circumstance Deductions

The amended law officially records family circumstance deduction levels within the legal text, set at 15.5 million VND/month for the taxpayer and 6.2 million VND/month for each dependent.

Legalizing these deduction levels enhances the stability and transparency of tax policy, providing a basis for taxpayers to proactively determine their obligations. For individuals supporting dependents, this regulation contributes to a significant reduction in taxable income, thereby reducing the actual tax payable.

5. Adding Tax on Income from Gold Transfers

The amended PIT Law adds income from gold transfers to the taxable category. Tax is calculated per transaction, applying a rate of 0.1% on the transfer price.

This regulation expands the scope of regulation to income arising from high-value assets, ensuring the principle of fairness in tax policy between labor income and investment or asset accumulation income.

The Amended Law on Personal Income Tax 2025 reflects a reform orientation towards simplicity, transparency, and suitability with actual income levels. Changes to the tax tariff, deductions, and regulatory scope are expected to reduce the tax burden for the majority of taxpayers while enhancing income regulation efficiency in the coming period.