Ministry of Finance proposes comprehensive amendments to the Personal Income Tax Law

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The Personal Income Tax Law Project will study the adjustment of tax rates in the Full Tax Schedule corresponding to the revised contents on income from real estate transfer. Photo: H.Anh

Amending 31/35 articles of the current law

According to the drafting agency, through the assessment of the implementation results over the past time, it shows that the personal income tax policy has demonstrated and promoted its role as an important tool in implementing the policy of regulating and redistributing income, gradually narrowing the income gap between individuals in society, towards social justice according to the policies and guidelines of the Party and the State.

However, in the process of development and integration in recent years and due to the rapid fluctuations of the world economy and politics in general and the Vietnamese economy in particular, the current Personal Income Tax Law has also arisen with some limitations and inadequacies that need to be studied for review and amendment to suit the reality, meet the requirements of personal income tax reform, and ensure transparency.

After reviewing, the draft Law is expected to amend and supplement 31 articles out of 35 articles of the current Law on Personal Income Tax (accounting for 88.5%).

Including regulations on scope of regulation; taxpayers; taxable income; tax-exempt income; tax reduction; taxable income from real estate transfer of resident individuals; family deductions for taxpayers and dependents; tax basis and method for determining the amount of tax payable for certain income items; Personal income tax rate schedule for income from salaries, wages...

With the expected content of comprehensive and fundamental amendments and supplements, the Ministry of Finance submitted to the Government for permission to propose the development of a draft Law on Personal Income Tax to replace the Personal Income Tax Law No. 04/2007/QH12 dated November 21, 2007, Law No. 26/2012/QH13 dated November 22, 2012 of the National Assembly amending and supplementing a number of articles of the Personal Income Tax Law, Law No. 71/2014/QH13 dated November 26, 2014 of the National Assembly amending and supplementing a number of articles of tax laws.

Amending seven key policy groups

The objective of this Law amendment is to expand the tax base; review, amend and supplement regulations on taxpayers and taxable income; study and adjust the threshold and personal income tax rates for some types of income to ensure consistency with the nature of each type of income and the regulatory objectives of personal income tax.

According to the Ministry of Finance, the draft Law on Personal Income Tax (replacement) will focus on amending seven key policy groups including: regulations related to personal income taxpayers; regulations related to personal income tax and tax calculation methods for each type of taxable income; regulations related to tax-exempt and tax-reduced income; regulations on personal income tax for business individuals; regulations on family deductions, deductions for charitable and humanitarian contributions and other specific deductions.

The draft Law adjusts the progressive tax schedule applicable to resident individuals with income from salaries, wages and tax rates in the full tax schedule corresponding to the revised contents on income from capital transfer and income from real estate transfer.

At the same time, review and amend regulations on tax calculation period, tax deduction, time of determining taxable income; remove regulations on the application of international treaties to unify implementation according to the provisions of the Law on International Treaties, remove related contents on tax management to unify implementation according to the provisions of the law on tax management.

According to the planned plan, the Government will propose to develop a draft Law on Personal Income Tax (replacement), submit it to the Standing Committee of the National Assembly for the Standing Committee of the National Assembly to report to the National Assembly for approval of the proposal to add the draft Law on Personal Income Tax (replacement) to the Law and Ordinance Development Program for 2025 at the 9th session of the 15th National Assembly (May 2025).

The Government shall submit to the National Assembly for comments on the draft Law on Personal Income Tax (replacement) at the 10th session of the 15th National Assembly (October 2025) and submit to the National Assembly for approval the draft Law on Personal Income Tax (replacement) at the 11th session of the 15th National Assembly (May 2026).