VCI Legal – 10 July 2026 

1. From legislative reform to immediate implementation

On 30 June 2026, the Government issued Decree No. 253/2026/ND-CP (“Decree 253”), providing detailed regulations and implementation measures for the Law on Personal Income Tax No. 109/2025/QH15 (“PIT Law”), as amended by Law No. 09/2026/QH16. Decree 253 took effect on 1 July 2026, one day after its issuance, and replaced Decree No. 65/2013/ND-CP and certain PIT provisions of Decrees No. 91/2014/ND-CP and 12/2015/ND-CP. The Ministry of Finance issued Circular No. 87/2026/TT-BTC on the same date to provide further implementing guidance. 

The legislative process was compressed. The National Assembly passed the PIT Law on 10 December 2025, with an effective date of 1 July 2026. The Ministry of Finance published the draft implementing decree for consultation in late March 2026. The underlying law was then amended on 24 April 2026, followed by the Prime Minister’s implementation plan in May 2026. The final decree was therefore required to reflect both the original law and intervening legislative amendments within a relatively short drafting period. 

Decree 253 is more than a restatement of tax rates and exemptions. Its commercial significance lies primarily in how income is classified, when tax must be withheld, what documentation is required to support exemptions and deductions, and which party bears the compliance obligation. 

This distinction matters because public reporting has disproportionately focused on the exemption for the sale of an individual’s only house or residential land. That exemption is not a new creation of Decree 253. Its essential conditions, including sole ownership, a minimum 183-day holding period and transfer of the entire property, already existed under Clause 2, Article 4 of Decree No. 65/2013/ND-CP. Decree 253 retains the exemption, while adding or clarifying several boundaries discussed below. 

2. The final text rejects the draft’s proposed division between listed and unlisted shares

One of the most consequential differences between the consultation draft and the final decree concerns transfers of shares in joint-stock companies. 

The draft proposed that transfers of shares in non-public or unlisted joint-stock companies should be taxed as capital transfers at 20% of the gain, rather than at 0.1% of gross transfer proceeds. The final decree does not adopt that proposal. Under Clause 2, Article 10 and Clause 1, Article 54 of Decree 253, shares in joint-stock companies remain securities for PIT purposes, whether the company is public, non-public, listed or unlisted. The applicable PIT therefore remains 0.1% of the transfer price for each transfer. 

The final position avoids creating two different PIT regimes for economically similar share instruments based principally on the listing or public-company status of the issuer. It also avoids the valuation, historical-cost and expense-verification disputes that would inevitably have arisen under a gains-based regime. 

However, the retained gross-proceeds method is not necessarily favorable in every case. A shareholder may still incur PIT even where the shares are sold at a loss because the tax is imposed on the transfer price rather than the economic gain. 

Transfers of capital in limited liability companies, partnerships and other non-joint-stock entities remain subject to a different regime. Under Clause 1, Article 53, PIT is generally imposed at 20% of the taxable gain. If the acquisition cost and relevant expenses cannot be established, tax is calculated at 2% of the transfer price. The distinction between a “share transfer” and a “capital transfer” therefore remains material when structuring an acquisition involving an individual seller. 

Decree 253 also introduces a more substance-oriented rule for certain real-estate-related transactions. Under Clause 5, Article 10, the sale of an entire private enterprise or a single-member limited liability company owned by an individual, where the capital transfer is “associated with real estate”, is treated as income from a real estate transfer. 

The phrase “associated with real estate” is not defined. It is therefore unclear whether the rule is limited to entities whose principal value derives from real estate, or whether the holding of material real estate may be sufficient. Until further guidance or administrative practice develops, transactions involving individual owners of property-holding private enterprises or single-member limited liability companies will require particular attention to tax characterization. 

3. The main implementation burden falls on employers and income-paying entities

A substantial part of Decree 253 concerns employment income, benefits, withholding and annual finalization. Some of these changes originate in the PIT Law; Decree 253 determines how they operate in practice. 

Under Point c, Clause 2, Article 8, remuneration paid for services supplied by an individual who has not registered a business or registered for business tax is treated as employment income, regardless of whether that individual holds a professional license or practicing certificate. The legal form used by the parties is therefore not decisive. Organizations engaging freelancers, consultants or other individual service providers must determine whether the payment belongs under the employment-income withholding regime or the business-income regime by reference to the individual’s actual registration status. 

For resident individuals without a labor contract, or with a labor contract of less than three months, Clause 2, Article 50 raises the mandatory 10% withholding threshold from VND2 million to VND5 million per payment. The rule also expressly covers payments made after the termination of an employment contract. Payments below VND5 million may be subject to 10% withholding at the individual’s request. 

Clause 1(b), Article 51 also materially changes the annual-finalization position. Additional employment income received from another source need not be included in the individual’s annual finalization where it has already been subject to 10% withholding and averages no more than VND15 million per month during the year. This is broader than the consultation draft, which referred to a substantially lower annual amount. 

Decree 253 also sets the operational limits and evidentiary conditions for several deductions and tax-exempt benefits. These include: 

• deductible medical expenses incurred at Vietnamese healthcare establishments of up to VND23 million per year; 

• deductible education and training expenses incurred at Vietnamese institutions of up to VND24 million per year; 

• an aggregate deduction of up to VND3 million per month for supplementary pension insurance, voluntary pension insurance and life insurance contributions; 

• a PIT-exempt cash mid-shift or lunch allowance of up to VND1.2 million per employee per month; and 

• broader exemptions for qualifying overtime, night-work and unused-leave payments and for severance or job-loss payments supported by the employer’s formal documents. 

The medical and education deductions are not automatic allowances. Clause 3, Article 49 requires compliant invoices and supporting documents, identification of the taxpayer or dependent, and confirmation that the expense has not been paid or reimbursed from another source. A taxpayer claiming these deductions must also consider the direct-finalization requirements under Article 51. 

In our view, the practical issue is not simply whether a benefit is labelled “tax-exempt” in an employment contract or payroll code. Employers must align labor contracts, collective labour agreements, internal policies, payroll records, invoices and payment evidence. Where the exemption depends on compliance with labor law or on the employer’s formal policy, weak documentation may convert an intended tax-exempt payment into taxable employment income. 

The timing provisions make this exercise immediate. Under Article 69, Decree 253 applies to resident individuals’ business and employment income from the 2026 tax year, although the VND1.2 million meal-allowance rule applies only from 1 July 2026. Amounts declared between 1 January and 30 June 2026 under the previous rules do not require amended monthly or quarterly returns; adjustments are to be made in the 2026 annual finalization return under Clause 2, Article 70. 

4. Digital assets enter the general PIT framework

Point d, Clause 10, Article 3 of the PIT Law identifies income from transfers of digital assets as taxable “other income”. Clause 4, Article 16 of Decree 253 defines the relevant category by reference to the law on the digital technology industry and includes virtual assets, crypto assets and other digital assets. Under Clause 2, Article 62, resident individuals are subject to PIT at 0.1% of the transfer price. 

This is not the first Vietnamese tax instrument dealing with crypto-asset transfers. Circular No. 32/2026/TT-BTC had already prescribed a 0.1% PIT regime for individual transactions through crypto-asset service providers during the pilot market. Decree 253 is nevertheless broader in legal architecture: it embeds transfers of digital assets in the general PIT regime instead of addressing only transactions within the crypto-market pilot. 

The decree does not, by itself, resolve every collection issue. Cross-border platforms, peer-to-peer transfers, non-cash consideration, transfers between private wallets and the identification of the party required to withhold or declare tax will continue to depend on the tax-administration rules, the regulatory perimeter for digital-asset service providers and the factual structure of each transaction. 

The PIT Law also authorizes taxation of gold-bar transfers, subject to the Government determining the taxable threshold, commencement date and tax rate in line with the gold-market management roadmap. Decree 253 does not activate that tax. The Ministry of Finance has confirmed that PIT on gold-bar transfers is not collected from 1 July 2026 pending a separate comprehensive policy. 

5. The sole-home exemption: continuity, with a tighter boundary

Article 19 continues the PIT exemption for the transfer of an individual’s only house or residential land-use right in Vietnam, provided that the property has been held for at least 183 days and is transferred in its entirety. Joint owners are assessed individually, and the seller remains responsible for the accuracy of the sole-property declaration. 

The material clarification is that a person who also holds a house or construction work formed in the future at the time of transfer is not regarded as holding only one residential property. In addition, the exemption itself does not apply to the transfer of a house or construction work formed in the future. The holding period for a replaced or reissued certificate is calculated from the issuance date of the earlier certificate. 

Accordingly, Decree 253 does not create a general new tax benefit for all property owners. It preserves an established exemption while expressly addressing future property and certain certificate and co-ownership issues. For the market, the more significant real-estate provision may instead be the reclassification of certain transfers of entire private enterprises and single-member limited liability companies under Clause 5, Article 10. 

In conclusion, Decree 253 generally avoids some of the most disruptive positions proposed during consultation, particularly the proposed gains-based taxation of shares in non-public and unlisted joint-stock companies. At the same time, it strengthens tax classification rules in areas where the legal form of a transaction may not reflect its economic substance. 

Its immediate impact is likely to be most visible in three areas: individual-led M&A transactions involving real estate, employer withholding and benefit documentation, and the integration of digital-asset income into the ordinary PIT system. 

The decree should therefore not be read simply as a catalogue of higher deductions and additional exemptions. For businesses and transaction parties, the more important questions are who must withhold, how income is classified, when an exemption can be documented, and whether a transaction may be recharacterized under a different tax regime. 

Disclaimer: This publication is prepared for general information only and does not constitute legal or tax advice. 

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