THE DEPARTMENT OF TAXATION GUIDES THE FINALIZATION OF PERSONAL INCOME TAX ON INCOME FROM SALARIES AND WAGES IN 2025

On 04/03/2026, the Department of Taxation issued Official Letter No. 1296/CT-NVT guiding the finalization of personal income tax (PIT) for income from salaries and wages. Some noteworthy contents are as follows:

A. Family circumstance deductions and tax rates for incomes from salaries and wages

1. Family circumstance deduction

– For the 2025 settlement period, the family circumstance deduction is determined according to the provisions of Resolution No. 954/2020/UBTVQH14 dated June 2, 2020 of the Standing Committee of the National Assembly, specifically as follows:

+ The deduction level for taxpayers is 11 million VND/month (132 million VND/year);

+ The deduction for each dependent is 4.4 million VND/month.

2. Partial progressive tariff

– For the 2025 settlement period, according to the Law on Personal Income Tax No. 04/2007/QH12, incomes from salaries and wages of resident individuals are entitled to a partially progressive tax schedule consisting of 07 tax levels.

+ Tax level 1: Taxable income of up to 60 million VND/year (5 million VND/month): tax rate of 5%;

+ Tax level 2: Taxable income of over 60 to 120 million VND/year (over 5 to 10 million VND/month): tax rate of 10%;

+ Tax level 3: Taxable income of over 120 to 216 million VND/year (over 10 to 18 million VND/month): tax rate of 15%;

+ Tax level 4: Taxable income of over 216 to 384 million VND/year (over 18 to 32 million VND/month): tax rate of 20%;

+ Tax level 5: Taxable income of over 384 to 624 million VND/year (over 32 to 52 million VND/month): tax rate of 25%;

+ Tax level 6: Taxable income of over 624 to 960 million VND/year (over 52 to 80 million VND/month): tax rate of 30%;

+ Tax level 7: Taxable income of over 960 million VND/year (over 80 million VND/month): tax rate of 35%.

B. Guidance on PIT declaration and finalization

1. In case PIT finalization must be made as prescribed

1.1. For organizations and individuals paying incomes from salaries and wages:

– Organizations and individuals paying incomes from salaries and wages are responsible for declaring PIT finalization regardless of whether tax deduction is incurred or not, and PIT finalization on behalf of authorized individuals.

– In case the income-paying organization or individual dissolves, goes bankrupt, terminates its operation, terminates its contract or reorganizes the enterprise, it must declare PIT finalization by the time of dissolution, bankruptcy, termination of operation, termination of contract or reorganization of the enterprise.

1.2. For individuals earning incomes from salaries and wages:

– Resident individuals who earn income from salaries or wages from two or more places but do not meet the conditions for being authorized to make finalization as prescribedmust directly declare PIT finalization with the tax authority if there is an additional tax amount to be paid or an overpaid tax amount to be refunded or cleared in the next tax declaration period.

– If an individual is present in Vietnam for less than 183 days in the first calendar year, but in 12 consecutive months from the first date of presence in Vietnam is 183 days or more, the first settlement year is 12 consecutive months from the first day of presence in Vietnam.

– Individuals who are foreigners who have terminated their working contracts in Vietnam shall declare tax finalization with tax authorities before exiting the country. In case the individual has not yet carried out tax finalization procedures with the tax authority, he or she shall authorize the income-paying organization or other organization or individual to make tax finalization in accordance with regulations on tax finalization for individuals. In case the income-paying organization or other organization or individual is authorized to make finalization, it must be responsible for the additional PIT amount to be paid or refunded the overpaid tax amount of the individual.

– Resident individuals earning incomes from salaries and wages paid from abroad and resident individuals earning incomes from salaries and wages paid from international organizations, embassies and consulates that have not yet deducted tax in the year must make direct settlement with tax authorities. if there is an additional tax amount to be paid or an overpaid tax amount is requested to be refunded or cleared in the next tax declaration period.

– Resident individuals who earn incomes from salaries or wages and are also eligible for tax reduction due to natural disasters, fires, accidents or critical illnesses that affect their ability to pay tax shall not authorize income-paying organizations and individuals to make tax finalization on their behalf but must directly declare the tax finalization with the tax authority as prescribed.

Individuals who install and use the eTax Mobile application can look up income information and tax obligations that have been declared by the income-paying organization in the year; On that basis, the system supports determining whether individuals are subject to PIT finalization or not.

2. In case PIT finalization is not required as prescribed

2.1. For income-paying organizations and individuals

Organizations and individuals that pay incomes from salaries and wages that are not subject to PIT finalization include: organizations and individuals that do not incur income payment in the year; income-paying organizations and individuals temporarily suspend their operations and business for the whole calendar year. In case of transformation of the type of enterprise (excluding equitized state-owned enterprises) in which the transformed enterprise inherits all tax obligations of the transformed enterprise, it is not required to declare PIT finalization by the time of issuance of the decision on enterprise transformation. enterprises shall declare settlement at the end of the year.

2.2. For individuals earning incomes from salaries and wages

Individuals earning incomes from salaries and wages in the following cases are not required to make personal income tax finalization:

+ Individuals with an additional personal income tax amount payable after the finalization of each year of VND 50,000 or less. Individuals eligible for tax exemption in this case shall determine the exempted tax amount by themselves, are not required to submit personal income tax finalization dossiers and are not required to submit tax exemption dossiers;

+ Individuals whose payable personal income tax amount is smaller than the temporarily paid tax amount without requesting tax refund or clearing in the next tax declaration period;

+ Individuals earning income from salaries and wages who sign labor contracts for 03 months or more at a unit, and at the same time have current income in other places with an average monthly income of not more than VND 10 million in a year and have been deducted PIT at the rate of 10% and authorize PIT finalization to the income-paying organization at the place of signing the contract co-workers;

+ Individuals who are purchased by the employer for life insurance (except for voluntary pension insurance) and other non-compulsory insurance with accumulated premiums for which the employer or the insurer has deducted PIT at the rate of 10% of the insurance premium amount corresponding to the portion purchased or contributed by the employer to the employee the employee does not have to finalize PIT for this income.

3. Deadline for submission of PIT finalization dossiers

3.1. For organizations and individuals paying incomes from salaries and wages

The deadline for submission of tax declaration dossiers for tax finalization is the last day of the 3rd month from the end of the calendar year. In case the deadline for submission of tax finalization dossiers coincides with a holiday as prescribed, the deadline for submission of tax finalization dossiers shall be counted as the next working day of such holiday in accordance with the provisions of the Civil Code.

3.2. For individuals earning incomes from salaries and wages

The deadline for submitting tax finalization dossiers is the last day of the 4th month from the end of the calendar year. In case the deadline for submission of tax finalization dossiers coincides with a holiday as prescribed, the deadline for submission of tax finalization dossiers shall be counted as the next working day of such holiday in accordance with the provisions of the Civil Code.

Note: For individuals who are subject to direct finalization and have additional payable tax amounts, it is necessary to pay attention to submit dossiers and fully pay payable tax amounts within the prescribed time limit to avoid incurring late payment interest as prescribed by law. Proactively implementing on time will help individuals limit the risk of violations and ensure a smooth settlement process.

In addition, the above Official Letter 1296 also provides detailed instructions on PIT finalization declaration procedures, deduction of dependents, instructions for declaration and submission of PIT finalization dossiers online, electronic application tools to support individuals to make tax finalization, links to look up situations, etc frequently asked questions related to PIT finalization, instructions for automatic PIT refund for individuals who directly make tax finalization.