PIT Law Amendment Effective July 2026 | 5 Things Companies Should Do Now

In December 2025, Vietnam’s National Assembly passed the amended Personal Income Tax (PIT) Law (Law No. 109/2025/QH15).

This amendment is being implemented in two phases.

This article focuses not on the overview of the amendment, but on the practical steps companies should take right now to prepare.

▶ For the full overview: Vietnam National Assembly Passes PIT Law Amendment — Effective July 1, 2026

Key Changes at a Glance

Increased Deductions (Effective January 2026 — Already in Effect)

Item	Previous (Until Dec 2025)	New (From Jan 2026)
Personal deduction (monthly)	11,000,000 VND	15,500,000 VND
Dependent deduction (monthly, per person)	4,400,000 VND	6,200,000 VND

Deductions have been raised by approximately 40%, and are already applicable from the 2026 tax period (January payroll onward).
Note: The 2025 tax finalization (conducted in early 2026) still uses the old deduction amounts.

New Progressive Tax Brackets (Effective July 2026)

Taxable Income (Monthly)	Current Rate (7 Brackets)	New Rate (5 Brackets)
Up to 5,000,000 VND	5%	5% (Up to 10,000,000 VND)
5,000,001–10,000,000 VND	10%
10,000,001–18,000,000 VND	15%	10% (10,000,001–30,000,000 VND)
18,000,001–32,000,000 VND	20%
32,000,001–52,000,000 VND	25%	20% (30,000,001–60,000,000 VND)
52,000,001–80,000,000 VND	30%
Over 80,000,000 VND	35%	30% (60,000,001–100,000,000 VND) 35% (Over 100,000,000 VND)

The simplified bracket structure results in effective tax reductions, particularly for middle-income earners.

5 Things Companies Should Do Right Now

① Prepare Tax Table Updates in Your Payroll System (For July)

Deduction updates should already be in place since January, but the tax bracket change in July still requires preparation.

If you manage payroll in Excel, make sure to allow enough time for formula updates and testing.

② Verify That New Deductions Are Already Applied (Since January)

The increased personal and dependent deductions have been in effect since January 2026.
Confirm the following.

If not yet applied, retroactive corrections back to January are required. Act promptly.

③ Review and Update Dependent Deduction Registrations

The change in deduction amounts is a good opportunity to review current registrations.

Dependent deductions are not applied without proper registration. Missing registrations directly reduce employees’ take-home pay.

④ Review Gross-Up Contracts for Expatriate Employees

Many Japanese companies use gross-up arrangements (company bears the tax) for expatriate employees in Vietnam.

With deductions changing from January and tax rates from July, the company’s PIT burden changes in two stages.

Gross-up calculations are complex. We strongly recommend running simulations now rather than waiting until right before the effective date.

⑤ Prepare Employee Communication Materials

Since take-home pay changes in two phases — deductions from January and tax rates from July — prepare the following to handle inquiries smoothly.

Vietnamese employees tend to be sensitive to changes in take-home pay. Proactive communication prevents unnecessary confusion.

Common Oversights by Japanese Companies

Conclusion

This PIT amendment is being implemented in two phases: increased deductions from January 2026, and simplified tax brackets from July 2026.
While positive for most companies and employees, the different effective dates require careful attention.

From updating payroll tax tables and recalculating gross-up amounts to organizing dependent deduction filings, start preparing now for the July tax rate change.

▶ Related articles:
Vietnam National Assembly Passes PIT Law Amendment — Effective July 1, 2026
Vietnam Personal Income Tax (PIT): Structure and Calculation Steps
Vietnam Payroll Basics: The Complete Guide