Knowledge base

The Bac Ninh Provincial Tax Authority answered a question about which progressive tax schedule to apply when a company pays December 2025 salary in January 2026 and files a PIT declaration for January 2026. Under the Personal Income Tax Law No. 109/2025/QH15, provisions relating to employment income for resident individuals apply from the 2026 tax year. The monthly PIT period is determined by the date of payment, not the date the income accrued. Therefore, December 2025 salary paid in January 2026 falls within the January 2026 (i.e., 2026 tax year) period. Conclusion: December 2025 salary paid in January 2026 is subject to the NEW 5-bracket progressive schedule under Law No. 109/2025/QH15, not the old 7-bracket schedule.

The Can Tho City Tax Department confirmed that animal feed is VAT-exempt under Article 5, Clause 3 of the VAT Law No. 48/2024/QH15. Household businesses using the declaration method that distribute animal feed are not subject to VAT. However, household businesses must still file VAT declarations as required. Additionally, those with annual revenue exceeding VND 300 million must file and pay personal income tax in accordance with the law.

The Dong Nai Tax Department advised: a household business that has been applying the flat-rate method (tax rate x revenue) since July 2025, with 2025 revenue above VND 3 billion but estimated 2026 revenue below VND 3 billion, must still apply the income-based PIT method (taxable income = revenue minus expenses) in 2026 - it cannot revert to the flat-rate method. Under Decree 68/2026/ND-CP: household businesses with revenue of VND 500 million or above must use the income-based method. Only if a household business self-determines 2026 revenue below VND 500 million may it use the flat-rate method. If actual 2026 year-end revenue reaches VND 3 billion or above, it must switch to the income-based calculation method.

The Ministry of Finance provided guidance on PIT and CIT treatment for meal allowances and overtime pay where employees are remunerated under a product-based (lump-sum output) pay scheme. From 01/7/2025, meal allowances that do not exceed the limit prescribed by labor law are not counted as taxable PIT income. Reasonable, documented meal allowance payments are deductible for CIT purposes. For overtime pay, the incremental portion of income paid above the normal working day rate is PIT-exempt. Product-based overtime pay is deductible for CIT if supported by full documentation (labor contracts, task assignment decisions, timesheets, payslips, payment vouchers). This guidance is based on Circular 40/2021/TT-BTC and applicable tax regulations effective from 2025.

The Ministry of Finance advises that a household business that purchases round logs (pine, eucalyptus, etc.) and saws them into planks or pieces for sale to processing companies is engaged in manufacturing activity, not merely basic primary processing. Therefore the higher manufacturing tax rate applies. Under Articles 4 and 6 of Circular 84/2021/TT-BTC and Decree 359/2025/ND-CP, the applicable rate is 4.5% (3% VAT + 1.5% PIT) rather than the distribution rate of 1.5% (1% VAT + 0.5% PIT). The classification depends on the actual nature of the processing: simple trimming or de-barking may qualify as basic primary processing, but sawing into commercial-dimension planks or pieces constitutes manufacturing.

The Hanoi Tax Department provided guidance on the personal income tax (PIT) exemption under Clause 3 of Article 71 of Law No. 93/2025/QH15 for income earned from participating in science, technology, and innovation (STI) task evaluation and acceptance councils. Under Clause 1 of Article 5 of Circular 03/2023/TT-BTC, costs for advisory council, evaluation council, and acceptance council activities in STI tasks are classified as **task management costs** (not task implementation costs). However, Law No. 93/2025/QH15 exempts from PIT income earned from wages and salaries **when performing STI tasks**. The Tax Department advises taxpayers to self-assess whether council participation activities qualify as "performing an STI task" in order to apply the correct tax treatment. If further clarification is needed, taxpayers may consult the Hanoi Tax Department's website or contact the tax authority directly.

The Ministry of Finance provided guidance on VAT and PIT rates for the Tieng Vong Pho household business (Da Nang) operating multiple activities: bamboo lantern manufacturing (code 3290), lantern-making and coffee-brewing instruction (codes 8559, 8552), lantern and coffee retail (codes 4773, 5630), and craft experience services. Per guidance from the Da Nang Tax Department (issued June 25, 2014, effective July 1, 2014), based on Decree 65/2013/NĐ-CP and the PIT Law: Craft experience and coffee-brewing experience services are classified as distribution/goods supply services - 10% VAT, 1% PIT. Lantern and coffee bag sales - 10% VAT, 0.5% PIT. Art teaching and artistic education - 0% VAT (exempt), 1.5% PIT. The household business applies presumptive or percentage-of-revenue tax calculation methods.

Responding to a business household leasing real estate across multiple provinces with estimated annual revenue above VND 3 billion, the Ministry of Finance (Tax Sub-Department Region 1, Ninh Binh) cited Decree 68/2026/ND-CP (issued March 5, 2026) and Personal Income Tax Law No. 109/2025/QH15 to outline the general declaration and tax calculation principles. Business households and individual traders with annual revenue above VND 500 million are subject to VAT and must use the direct method: VAT payable equals taxable revenue multiplied by the percentage rate for the relevant business line under VAT Law No. 48/2024/QH15. For personal income tax, individuals leasing real estate (excluding accommodation-service business) pay tax on the portion of revenue exceeding VND 500 million multiplied by the applicable tax rate. If an individual leases multiple properties within the same province or across different provinces, they must file one consolidated tax return and choose a single tax authority (in the locality of one of the leased properties) to submit it, unless the corporate lessee has already declared and paid tax on their behalf. The VND 500 million annual deduction can be applied flexibly: the taxpayer selects one or more lease contracts to apply it against first, and if the deduction is not fully used, continues applying it to other contracts until the full VND 500 million is used, capped at VND 500 million total per year across all contracts. Important caveat: the official reply addresses only the general VAT and PIT declaration principles under Decree 68/2026/ND-CP. It does NOT directly answer the taxpayer's specific question about how to determine depreciation costs for fixed assets acquired in 2020 when the original supporting documents are no longer available, nor does it address invoice-issuance requirements that the taxpayer also asked about. The business household should contact its managing tax authority directly for specific guidance on valuing undocumented assets and on invoicing obligations.

The Ministry of Finance issued Q&A guidance on personal income tax (PIT) obligations for a real estate deal carried out through a power-of-attorney contract. Individual A held land-use rights but had not yet received the certificate, so A granted individual B full authority to dispose of the land; after B helped A obtain the certificate, B, acting on A's behalf, signed a gift contract transferring the land to individual C, who is B's wife. Citing Official Letters 1133/TCT-TNCN, 3373/TCT-TNCN, and 3438/TCT-PC (dated August 5, 2024), the Ministry held that when a power-of-attorney contract grants the attorney-in-fact full rights of possession, use, and disposal under the Civil Code, the arrangement is treated as a real estate transfer between the grantor (A) and the attorney-in-fact (B), even without a separate written transfer contract. As a result, A must declare and pay 2% PIT on the transfer value. On the subsequent gift from B to C, gifts of real estate between spouses are exempt from PIT under Clause 4, Article 4 of the PIT Law, so C does not owe the 10% gift-receipt PIT provided the marital relationship is properly documented. If C is not B's lawful spouse, both A and C would owe PIT simultaneously. Using a power of attorney to dispose of property is a common practice in Vietnam when land certificates are pending, so this guidance is a practical reference for individuals, investors, and accountants: tax authorities examine the substance of the contract - whether it grants all three rights of possession, use, and disposal - rather than its outward label.

A company asked the tax authority how to determine the personal income tax (PIT) residency status of a foreign employee transferred by the parent company to work in Vietnam starting September 15, 2025. The employee already holds a work permit and a temporary residence card. Earlier, the employee made a short entry into Vietnam (March 14 to 18, 2024) to attend a family wedding, with no work performed and no income earned during that visit. The company wanted to know whether the employee qualifies as a tax resident for 2025, whether the employee can authorize the company to finalize PIT on their behalf, and whether the short 2024 visit affects the residency determination. Based on Circular 111/2013/TT-BTC and Decree 126/2020/ND-CP, the tax authority answered that an individual is a Vietnam tax resident if present in the country for 183 days or more within a calendar year, or for 183 days or more within any 12 consecutive months from the first day of presence. The paying company must determine residency by checking the employee's actual passport entry and exit stamps against the labor contract or assignment letter. For the scenario described, the tax authority did not issue a specific residency conclusion for this individual. Instead, it directed the company to determine the employee's residency status itself, based on the employee's actual passport entry and exit stamps compared against the labor contract or assignment letter.

An employee discovered she had unknowingly been issued two personal tax codes (MST), with no clear reason for the duplication. When her company finalized her personal income tax (PIT), her two registered dependents (NPT) turned out to be linked to the second tax code, while the finalization itself was processed under the first tax code. She was concerned this might disqualify her from the family circumstance (dependent) deduction for those two dependents. Responding, the Thai Nguyen Provincial Tax Department cited Clause 4, Article 37 of Circular No. 90/2026/TT-BTC dated 30 June 2026 issued by the Ministry of Finance on tax registration: an individual who has been issued more than one tax code must update the personal identification number information for all tax codes issued, so the tax authority can consolidate the codes under that personal ID number and unify the taxpayer's tax data accordingly. Once the tax codes are merged, invoices, documents, and tax records previously issued using any of those tax codes remain valid for tax administrative procedures and for proving fulfillment of tax obligations, without needing to be reissued under the personal ID number. In other words, once the two tax codes are consolidated under the same personal identification number, dependent information declared under the second tax code is still recognized as belonging to the same employee. The tax authority also referenced Official Letter No. 3422/CT-NVT dated 27 May 2026 from the Tax Department (with Appendix 01), which provides detailed instructions on how to check tax code status and update personal identification numbers, and advised the taxpayer to follow that guidance to ensure the dependent deduction is not affected.

A company operating in trade and IT services asked the Ministry of Finance how to handle personal income tax (PIT) on commissions and fees paid to sales collaborators. These collaborators only find and refer customers and help negotiate terms; they do not sign contracts in their own name, do not issue invoices, do not collect payment from customers, and do not run an independent business. All contracts, invoices, and revenue belong to the company. The Hanoi Tax Department responded that commissions or fees paid to collaborators who are not business individuals qualify as wage and remuneration income under Point c, Clause 2, Article 2 of Circular 111/2013/TT-BTC. This covers sales agency commissions, brokerage commissions, and other service fees, all of which are subject to PIT. Because the collaborators have no labor contract with the company, under Point i, Clause 1, Article 25 of Circular 111/2013/TT-BTC, the company must withhold PIT at a flat rate of 10% on the income before payment, whenever a single payment reaches 2,000,000 VND or more. This is an important compliance point for any business using a collaborator or affiliate-style sales model, since misclassifying these payments can lead to under-withholding, back taxes, and late-payment penalties.