How Much Income Will Be Tax-Exempt Under Vietnam’s New Family Deduction Policy in 2026?

On October 17, the Standing Committee of the National Assembly of Vietnam (UBTVQH) officially approved a resolution to adjust the personal income tax (PIT) family deduction, marking a long-awaited update to ensure that the tax policy better reflects the real cost of living faced by workers.

A Necessary Adjustment After Six Years

Starting from the 2026 tax year, the new deduction levels will be:

• Taxpayer’s personal deduction: 15.5 million VND/month (≈ 186 million VND/year)

• Dependent deduction: 6.2 million VND/month per dependent

These replace the current levels of 11 million and 4.4 million VND/month (under Resolution 954/2020/UBTVQH14).
The increase—about 40 % higher—is considered timely amid rising living costs and urban inflation pressures.

How to Estimate If You’ll Pay PIT in 2026

Taxable Income = Total Income – (Mandatory Social Insurance + Personal Deduction + Dependent Deduction)

Assuming the taxpayer earns salary income only and contributes 10.5 % to compulsory insurance, the following estimates apply under the new deductions:

Thus, individuals earning below these thresholds will not be subject to PIT from 2026 onward.

Why This Policy Matters

1. Reflects Real-Life Costs:
   After six years without adjustment, this update aligns the tax system with current living standards, especially in major cities.

2. Supports the Middle-Income Group:
   These workers face mounting expenses. The revision allows them to retain more disposable income, encouraging consumption and domestic growth.

3. Promotes Fairness:
   Families with dependents face higher financial burdens. The higher dependent deduction (6.2 million VND/month) embodies a fairer and more compassionate approach to taxation.

Key Notes on Dependent Registration

Under Circular 111/2013/TT-BTC, dependents must be registered and assigned a tax code.
Each dependent can only be claimed once per tax year by a single taxpayer.
Common dependents include:

• Children under 18, or full-time students without significant income

• Parents, grandparents, siblings, or other relatives who earn ≤ 1 million VND/month and are directly supported by the taxpayer

Conclusion: A More “Breathable” Tax Policy

From 2026, individuals earning under 17 million VND/month (without dependents) will be fully exempt from personal income tax.
This change represents not merely a technical adjustment but a human-centered reform—one that lightens the burden on workers while enhancing equity in the tax system.

📌 The 2026 reform ushers in a new era for Vietnam’s PIT policy—fairer, more flexible, and closer to everyday life.