Draft Law on Personal Income Tax: Raising the tax threshold to 20 million VND

(Illustration photo: Vietnam+)

In the document sent to the Ministry of Justice for appraisal of the draft Law on Personal Income Tax (amended), the Ministry of Finance added new deductions, taxable income thresholds as well as business income of resident individuals...

Accordingly, the Ministry of Finance has proposed to amend and complete regulations on tax calculation methods for business income of resident individuals.

According to the provisions of Article 10 of the current Law on Personal Income Tax, business individuals pay personal income tax at a rate on revenue for each field and industry of production and business.

Revenue is the total amount of sales, processing fees, commissions, and service fees arising during the tax period from production and trading activities of goods and services. In case the business individual cannot determine the revenue, the competent tax authority will determine the revenue according to the provisions of the law on tax administration.

To implement the policy of abolishing the lump-sum tax form from January 1, 2026, the draft Law supplements the method of calculating tax on business income of resident individuals with annual revenue above the level prescribed by the Government, determined by multiplying taxable income by the tax rate of 17%.

Of which, taxable income is determined by revenue from goods and services sold minus expenses related to production and business activities during the tax period.

According to the Ministry of Finance, this regulation is equivalent to the regulation on corporate income tax for small and medium-sized enterprises currently stipulated in the Corporate Income Tax Law No. 67/2025/QH15, which applies a tax rate of 17% to enterprises with total annual revenue from over 3 billion VND to no more than 50 billion VND.

For business individuals with annual revenue below the level prescribed by the Government, the method of calculating tax based on the revenue rate as in the current Personal Income Tax Law will still be maintained.

The Ministry of Finance has added regulations on income thresholds to determine taxable income for some income sources. Accordingly, the current Personal Income Tax Law stipulates that individuals with income from winning prizes, copyrights, commercial transfers, inheritances, and gifts will have to pay 10% tax on income exceeding VND10 million.

However, after receiving comments, the Ministry of Finance proposed to raise this taxable income threshold to 20 million VND to synchronize with the adjustment of family deductions and taxable revenue threshold for individual businesses.

The draft also adds other taxable income groups, including: transfer of national domain names “.vn”, emission reduction certificates, carbon credits, auctioned car license plates, digital assets and some other types of assets as prescribed by the Government.

The applicable tax rate is 5% on income exceeding 20 million VND for each occurrence. For digital assets regularly traded on transparent exchanges, a tax rate of 0.1% will be applied on the price and each transfer./.

According to VNA

Source: https://baothanhhoa.vn/du-thao-luat-thue-thu-nhap-ca-nhan-nang-nguong-tinh-thue-len-20-trieu-dong-260783.htm