Tax Deductions for Personal Income Tax Calculation (2026 Update)

2026 Personal Tax Income in Vietnam

Tax deductions for Personal Income Tax (PIT) calculation are amounts directly subtracted from an individual’s taxable income before determining the taxable income from salaries and wages.

Resolution No. 110/2025/UBTVQH15 and Decree No. 253/2026/ND-CP provide detailed regulations on the tax deductions applicable for PIT calculation from the 2026 tax year.

Eligible Objects for Tax Deductions

  • Eligible individuals: Employees who are resident individuals signing labor contracts with a term of 3 months or more (the group subject to PIT calculation under the progressive tax rate scale).
  • Ineligible individuals: Non-resident individuals; or resident individuals signing labor contracts under 3 months, or signing other types of contracts (such as probation, job contractor, collaborator, service, brokerage, internship, training contracts, etc.).

1. Family Relief (Family Circumstances Deductions)

According to Resolution No. 110/2025/UBTVQH15 on adjusting the family relief levels for PIT, the details from 2026 are as follows:

Personal deduction for the taxpayer

  • Deduction level: 15,500,000 VND/month (equivalent to 186,000,000 VND/year).
  • Conditions for application: Must be a resident individual signing a labor contract of 3 months or more.
  • Principles of calculation:
    • Employees do not need to perform administrative procedures to register for the personal deduction.
    • If an employee has multiple sources of income from salaries and wages, they may only choose to claim the personal deduction at one employer at any given time (calculated on a full-month basis).
    • For expatriates who are resident individuals in Vietnam: The personal deduction is calculated from January or from the month of arrival in Vietnam (for individuals present in Vietnam for the first time) until the month the labor contract terminates and they leave Vietnam (calculated on a full-month basis).
    • If, during the tax year, the individual has not claimed the personal deduction or has claimed it for less than 12 months, they are entitled to the full 12-month deduction upon final tax settlement.

Deduction for dependents

  • Deduction level: 6,200,000 VND/month for each dependent.
  • Dependents include: Children; spouse; biological parents, parents-in-law (or parents of the spouse); stepparents; legally adoptive parents; or other helpless individuals whom the taxpayer is directly nurturing (biological siblings; paternal/maternal grandparents; biological aunts, uncles; biological nieces/nephews who are children of biological siblings).
  • Conditions for application: Employees must register their dependents with the tax authority to be issued a dependent tax identification number (TIN) to qualify for the deduction.
  • Principles of calculation:
    • Each dependent can only be claimed once by one taxpayer in a tax year. If multiple taxpayers share the same dependent, they must mutually agree to register the dependent under one taxpayer.
    • The deduction is temporarily calculated during the year from the date of registration. If not claimed during the year, it can be claimed from the month the nurturing obligation arises upon final tax settlement, provided the dependent registration is completed.
    • Special note for other helpless dependents directly nurtured by the taxpayer: The deadline for registering these dependents is December 31 of the tax year. Registrations submitted after this deadline will not be eligible for deduction for that tax year.

2. Deductions for Compulsory Insurance Contributions

When participating in compulsory insurance, the amount deducted from the employee’s salary for insurance contributions is directly deducted when calculating PIT.

  • Employee contribution rate: 10.5% of the insurance-eligible salary, which includes:
    • Social Insurance (SI): 8%
    • Health Insurance (HI): 1.5%
    • Unemployment Insurance (UI): 1%
  • Example: An employee signs an indefinite-term labor contract with a company and participates in compulsory insurance with an insurance-eligible salary of 20,000,000 VND/month.
    • The monthly insurance contribution deducted from the salary is: 20,000,000 VND×10.5%=2,100,000 VND
    • This 2,100,000 VND is the exact amount deducted from the taxable income before calculating PIT.

3. Deductions for Charitable, Humanitarian, and Study Promotion Contributions

According to Article 49 of Decree No. 253/2026/ND-CP, resident individuals are entitled to deduct the following charitable and humanitarian contributions from their taxable income before tax calculation:

  • Eligible contributions:
    • Contributions to organizations or establishments caring for and nurturing children in extremely difficult circumstances, disabled individuals, or helpless elderly people.
    • Contributions to charitable funds, humanitarian funds, or study promotion funds.
    • Contributions to organizations with the function of mobilizing sponsorships, established and operating in accordance with the law.
  • Note: The receiving organizations, establishments, and funds must be permitted to establish or be recognized by competent state agencies, operating for charitable, humanitarian, or study promotion purposes, and not for profit.
  • Supporting documents: Photocopies of legal receipts issued by the organizations/funds, or non-cash payment documents through credit institutions.
  • Principle of application: Contributions arising in any year shall be deducted from the taxable income of that year and cannot be carried forward to the next tax year.

4. Deductions for Medical and Education-Training Expenses

This is a prominent new feature regulated under Decree No. 253/2026/ND-CP, allowing resident individuals to deduct actual medical and educational expenses incurred for themselves and their dependents:

Deduction for Medical Expenses:

  • Maximum deduction: Not exceeding 23,000,000 VND/year
  • Scope of application: Expenses for medical examination and treatment at domestic medical facilities within the list covered by health insurance.

Deduction for Education and Training Expenses:

  • Maximum deduction: Not exceeding 24,000,000 VND/year
  • Scope of application: Tuition fees for preschool education, general education, vocational education, higher education, and other professional skills at domestic educational and training institutions.

Conditions for Medical & Educational Deductions:

  • Must have legal invoices and receipts as prescribed by law. Specifically, medical expenses must also be accompanied by a Statement of Medical Examination and Treatment Costs issued by the medical facility.
  • Invoices and receipts must clearly display the information of either the taxpayer or the taxpayer’s dependents.
  • These expenses must not have been paid or reimbursed from other sources, including sponsorships, support, payments made on behalf of the individual by other organizations/individuals, state budget, social insurance funds, health insurance, or commercial insurance payouts.
  • If an individual has completed their final tax settlement but does not yet have the invoices or receipts to determine these medical/educational deductions, any subsequent tax adjustments will be handled in accordance with the tax administration laws.

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