DRAFT PERSONAL INCOME TAX LAW (REPLACEMENT)

On July 17, 2025, the National Assembly released the draft Personal Income Tax Law (replacement) with several new provisions as follows:

1.1 Proposed additions to taxable income include:

• Income from the transfer of Vietnam national internet domain names
• Income from the transfer of emission reduction certificates, carbon credits, and green bonds
• Income from the transfer of auctioned car license plates (along with the vehicles bearing those plates)
• Income from the transfer of digital assets (virtual assets, encrypted assets)
• Income from the rights to use, own, or transfer other assets as stipulated by the Government

1.2 Proposal to reduce the personal income tax bracket structure from 7 levels to 5, with two proposed options:

1.3 The Personal Income Tax Law also addresses the delegation of authority to the Government to regulate the level of family circumstance deductions. Currently, a proposed adjustment aims to increase the deduction levels specified in Article 1 of Resolution 954/2020/UBTVQH14, in a way that benefits taxpayers. Specifically:

The proposed draft Resolution, if approved, will take effect from the date of signing and be applicable starting from the 2026 tax year.

1.4 Personal income tax rate on income from real estate transfer

According to opinions from the meeting on the draft amended Personal Income Tax (PIT) Law, the Ministry of Finance stated that it will maintain the current method of collecting PIT on real estate transfers at a rate of 2% of the transaction value. The 20% tax rate on taxable income from real estate transfers and the PIT calculation based on the holding period of the property, as proposed in the draft Law, have not yet been applied.

The implementation of this new tax calculation method requires an appropriate roadmap to ensure consistency with the development of other related policies and suitability for Vietnam

According to Notification No. 397/TB-VPCP dated August 5, 2025, regarding the conclusions of the Deputy Prime Minister at the meeting on the draft Law replacing the Personal Income Tax Law

• Support and incorporate feedback from businesses and relevant ministries; aim to submit the draft Law before August 15, 2025.
• Focus on thoroughly assessing the policy impacts, especially concerning real estate, securities, and family circumstance deductions (the majority of opinions at the meeting agreed with Option 2)