Official Letter No. 2231/CST-TN dated 31 July 2026, issued by the Department of Tax, Fee and Charge Policy Management and Supervision (Ministry of Finance), introduces certain new provisions of Decree No. 253/2026/ND-CP and Circular No. 87/2026/TT-BTC guiding the implementation of the Law on Personal Income Tax (“PIT”) No. 109/2025/QH15 (both issued on 30 June 2026).
Some notable points are as follows:
1. New deductions for medical and education/training expenses:
- Taxpayers are entitled to an additional deduction (on top of the existing family circumstance deduction) of up to VND 23 million/year for medical examination and treatment expenses incurred at domestic medical facilities within the scope of the health insurance-covered list, and up to VND 24 million/year for domestic education and training expenses, applicable to themselves and their dependents.
- Conditions: valid invoices/documents are required (medical expenses additionally require a statement of medical examination/treatment costs); the expenses must not have been paid from other sources (insurance, state budget, sponsorship, etc.).
2. Deduction levels and thresholds relating to dependents:
- The income threshold used to determine a dependent for family circumstance deduction purposes is raised from VND 1 million to VND 3 million/month (per Circular No. 87/2026/TT-BTC).
- The deadline for dependent registration is before 31 December of the tax year, and remains stable for subsequent years if unchanged.
3. Withholding and provisional tax thresholds:
- The income threshold triggering 10% provisional withholding for individuals without a labor contract, or with a labor contract of less than 3 months, is raised from VND 2 million to VND 5 million per payment.
- The threshold for casual/ad-hoc income not requiring tax finalization is raised from VND 10 million to VND 15 million (average per month).
- The deductible cap for supplementary pension insurance, voluntary pension insurance, and life insurance premiums when determining taxable income is raised from VND 1 million to VND 3 million/month/person.
4. Conversion of taxable income: Income received in foreign currency is converted into VND at the buying rate of the commercial bank where the individual or the income-paying party maintains its transaction account, at the time the income arises; where no account is maintained in Vietnam, the central VND/USD exchange rate, or the cross rate of VND with other foreign currencies published on the State Bank of Vietnam’s electronic portal at the time the income arises, applies.
5. Effective date:
- Decree No. 253/2026/ND-CP and Circular No. 87/2026/TT-BTC take effect from 1 July 2026;
- The regulation on mid-shift/lunch meal allowances also applies from 1 July 2026.
- Provisions relating to business income and salary/wage income of resident individuals apply from the 2026 tax period.
Source document:
- 📄 Download Official Letter No. 2231/CST-TN dated July 31 from the Government at: here
