Taxable and Exempt Personal Income in Vietnam (2025): 8 Key Groups

🔴 8 Groups of Income Subject to Declaration and Personal Income Tax (PIT)

According to Article 3 of the Law on Personal Income Tax, 8 groups of income transferred to personal accounts are subject to tax declaration and payment:

1. Income from production, business activities, and professional practice (with license or certificate):
   • Applies to business, online sales, and service provision (design, consulting, etc.).
   • **TAX EXEMPTION** if revenue from business activities is **100 million VND/year or less**.
   • If revenue is **over 100 million VND/year**, both **PIT and VAT** must be paid.
2. Income from salaries and wages:
   • Includes salary, bonuses, and allowances that are considered salary/wages.
   • **Not taxed** are allowances and subsidies that are **not in the nature of salary or wages**.
   • Applied using the **partially progressive tax schedule**.
3. Income from capital investment:
   • Includes **loan interest** (except between individuals), **share dividends**, and other income from capital investment.
   • **TAX EXEMPTION** for income from **Government bond interest**.
4. Income from capital transfer:
   • Includes transfer of contributed capital portions and transfer of securities.
5. Income from real estate transfer:
   • Includes transfer of land use rights, houses, and assets attached to land.
   • Normally subject to **2% tax on the transfer price at the time of contract notarization**.
   • Risk of **tax reassessment and penalties** if the declared contract value is lower than the actual transaction value.
6. Income from winnings:
   • Applies to lotteries, promotions, betting, games, and prize-winning contests.
7. Income from royalties:
   • Includes transfer and transfer of usage rights for intellectual property and technology transfer.
8. Income from commercial franchising.

**Note on Service Fees/Commissions:** Service fees, brokerage fees, commissions, or fees from services like cashing out/transferring money on behalf of others are **taxable income** (only the fee portion is taxed, not the principal amount).

✅ 4 Groups of Individuals Exempted from Personal Income Tax (PIT)

Individuals belonging to one of the following 4 groups will not have to pay personal income tax:

1. Individuals whose income from salaries and wages is below the taxable threshold:
   • An individual **without dependents** is not required to pay tax if their total income from salaries and wages is **less than 11 million VND/month** (after deducting compulsory insurance, personal/family deductions).
2. Individuals working under a contract of less than 3 months or without a labor contract:
   • Not subject to tax if total income is **less than 2,000,000 VND/payment**.
   • If income is over 2,000,000 VND/payment but is the sole source of income and total taxable income after deductions **does not reach the taxable threshold** (with commitment according to Form 08/CK-TNCN).
3. Individuals with income from sources exempted from PIT (pursuant to Article 4 of the PIT Law):
   • Income from real estate transfer, inheritance, or gifts of real estate between **immediate family/marital/foster relationships** (spouse, parent-child, etc.).
   • Income from the transfer of houses, residential land, and assets attached to residential land by an individual who **only owns one house or residential land**.
   • Income of households and individuals directly engaged in agricultural, forestry, salt production, aquaculture, and fishing **without processing** or only **simple preliminary processing**.
   • Income from **deposit interest** at credit institutions and interest from life insurance contracts.
   • Income from **overseas remittances (kiều hối)**.
   • The portion of salary paid higher for working **at night or overtime**.
   • Pension paid by the **Social Insurance Fund**.
   • Income from **scholarships**.
   • Income from **compensation** for life/non-life insurance contracts, labor accidents, or state compensation.
   • Income received from **charity funds** and **foreign aid** approved by the competent authority.
   • Income from salaries and wages of **Vietnamese crew members** working for foreign shipping companies or international transport companies.
   • Income from performing **science, technology, and innovation** tasks (including royalties upon commercialization).
4. Business households and individuals with annual revenue under 100 million VND:
   • Business households and individuals with revenue **from 100 million VND/year or less** are **exempted from both VAT and PIT**.
   • For group business/household business, the 100 million VND threshold is determined for **one (01) sole representative** of the group/household for the tax year.