RESOLUTION NO. 110/2025/UBTVQH15 ADJUSTMENT OF PERSONAL INCOME TAX EXEMPTIONS

The period from 2020 to 2025 witnessed significant economic volatility arising from post-pandemic effects and global inflationary pressures. Escalating living costs rendered the existing personal income tax framework increasingly inadequate and misaligned with contemporary socio-economic conditions. In response, the Standing Committee of the National Assembly issued Resolution No. 110/2025/UBTVQH15 on 17 October 2025, effective from 1 January 2026 and applicable to the 2026 tax year, thereby adjusting the exemptions under the personal income tax regime. This marks the most substantial reform of personal income tax since Resolution No. 954/2020/UBTVQH14.

The Resolution introduces a significant increase in exemptions, specifically:

• For Personal exemption: 15,5 million VND/month (186 million VND/year), representing an increase of approximately 41% compared to the previous deduction of 11 million VND/month (132 million VND/year) under Resolution No. 954/2020/UBTVQH14;
• For Dependant exemption: 6,2 million VND/dependant/month, an increase of approximately 41% from the previous level of 4,4 million VND/dependant/month.

The differences between the former regulations and the new provisions are demonstrated in the table below:

Based on the comparative table above, it is evident that, in Case 1 (a monthly salary of 20 million VND with one dependent, falling within the lower–middle income group), the taxpayer was previously required to pay a small amount of personal income tax; however, under the new regulations, the taxpayer is no longer subject to personal income tax.

In Case 2 (a monthly salary of VND 40 million with two dependents, representing the middle-income group), the amount of tax payable is reduced by nearly 44%. This group typically faces the highest living-cost pressures in major urban centres, and the reduction therefore yields a significant financial relief.

In summary, Resolution No. 110/2025/UBTVQH15 is not merely a technical adjustment to fiscal thresholds but constitutes a substantive measure to enhance social welfare amid ongoing economic fluctuations. The application of the revised exemptions from the 2026 tax year will ease the financial burden on wage earners, promote fairness, and foster greater confidence among workers contributing to the next phase of economic development.