📌 Three income groups The important aspects of personal income tax that need to be correctly distinguished include:
- Income from business: It involves providing goods and services for profit; is registered with the business and pays taxes as required; and proactively organizes, manages, and bears the risks in its business operations.
- Income from renting real estate: Income from individuals owning/leasing real estate and subletting it for rental income (excluding accommodation businesses); excluding income from the transfer of real estate.
- Income from salaries and wages: Working for organizations or individuals and receiving salaries, wages, service fees, remuneration, royalties, etc., without business registration; not organizing activities independently, and not bearing the risks in business operations.
- Important legal updates: Remuneration from providing services by individuals not registered as a business identified as income from salaries and wages with progressive tax rates up to 35%Decree 253/2026/ND-CP).
On November 30, 2026, the Government issued... Decree 253/2026/ND-CP guide Law on Personal Income Tax No. 109/2025/QH15The decree clearly defines the income groups subject to personal income tax, including three notable groups: income from business activities, income from real estate rentals, and income from salaries and wages. These three groups differ in the nature of the income, the basis for determination, and the tax calculation mechanism — misidentifying the group means incorrect declaration and the risk of tax arrears.
Income from business
Income from business activities includes all income earned by individuals. production and business activities In accordance with the law, Decree 253/2026/ND-CP officially introduces... e-commerce business, business on digital platforms This income bracket includes online sales, livestreaming, KOLs/KOCs, and other digital business models.
Includes the following items
- Production and trading of goods and services.
- Independent practice requires a license/certification and It has a business registration.
- Agents (insurance, lottery, multi-level marketing, etc.).
- Brokerage services are provided in accordance with the law.
- Business cooperation with organizations and enterprises.
- E-commerce business, business on digital platforms.
Identifying features
- It involves business activities, providing goods and services for the purpose of making a profit.
- Having a business registration/tax registration as required (except in some specific cases).
- Proactively organize, manage, and assume risks in business operations.
Individuals residing in Vietnam have annual income. from 1 billion VND or less Not required to pay personal income tax (the threshold has been raised from 500 million VND according to...) Decree 141/2026/ND-CP(Applicable from the tax year 2026). Above this threshold, personal income tax is calculated using one of two methods: as a percentage of revenue or based on taxable income (if applicable).
If calculated according to percentage of revenue methodPersonal income tax is calculated using the following formula:
Personal Income Tax = Amount of revenue exceeding the threshold × Tax rate by industry
| Occupational groups | Tax |
| Distribution and supply of goods | 0.5 % |
| Production, transportation, services related to goods, and construction with material procurement included. | 1.5 % |
| Services and construction without material procurement (except for property leasing; insurance agents, lottery, multi-level marketing: 5%) | 2% |
| Digital information content products and services: entertainment, video games, digital movies, digital photos, digital music, digital advertising. | 5% |
| Other business activities | 1% |
According to Clause 3, Article 7 of the Personal Income Tax Law No. 109/2025/QH15 and the Appendix listing industries and occupations issued with Decree 253/2026/NĐ-CP
If calculated according to taxable income method (excluding real estate rentals):
Personal Income Tax = (Revenue – Operating Expenses) × Tax Rate Based on Scale
| Scale | Tax |
| Revenue ranging from 1 billion to 3 billion VND. |
15 % |
| Revenue ranging from 3 billion to 50 billion VND. |
17 % |
| Revenue exceeding 50 billion VND |
20 % |
Theo Điều 11 Nghị định 320/2025/NĐ-CP
The method of tax calculation, management methods, and specific tax rates applied are in accordance with current regulations for household and individual businesses in each case; the amount of tax payable also depends on the corresponding value-added tax obligations.
Income from renting real estate
Renting out real estate falls under the category of business income but has separate tax calculation mechanism, as stipulated directly in Clause 4, Article 7 Personal Income Tax Law No. 109/2025/QH15.
Includes the following items
- House for rent, apartment for rent.
- Rental of premises, offices, warehouses, and other real estate.
- Excluding accommodation business activities. (hotels, homestays, etc.).
Identifying features
- Individuals who own or lease real estate and rent it out to generate income.
- This does not include income from salaries or wages.
- Not income from the sale of real estate.
Personal income tax on real estate rental activities is calculated using the following formula:
Personal Income Tax = Amount of revenue exceeding the threshold × 5% tax rate
In cases where an individual has multiple rental contracts, they can choose which contracts to deduct from the VND 1 billion threshold when calculating taxes; if the deduction is not sufficient, they can continue deducting from other contracts until the threshold is reached. If the lessee pays in advance for several years, the revenue can be allocated annually or calculated in full at the time of receiving the payment.
The business or entity paying the income (the lessee) is responsible. tax deduction, declaration, and payment on behalf of others. For individuals when the contract stipulates it; the details of filing on their behalf, paying on their behalf, and the amount deducted from the threshold must be clearly stated in the contract.
Income from wages and salaries
Decree 253/2026/ND-CP expands the scope of income from salaries and wages. According to Article 8, this income now includes the following items: monetary or non-monetary remuneration and benefits which the individual receives:
Includes the following items
- Salaries, wages, and other payments of a similar nature.
- Remuneration for participating in research topics/projects; teaching; performing; royalties… .
- Remuneration for participation in the Board of Directors, Supervisory Board, Management Council, associations, professional organizations, etc.
- Remuneration from providing services by an individual No business registration, no tax registration. for business activities (with or without a license/professional certification).
Identifying features
- Working for an organization or individual and receiving a salary or wage.
- Receiving royalties, fees, service charges, etc., without a business registration.
- Not taking on business risks, not organizing business operations independently.
For individuals residing in Vietnam who sign employment contracts of 03 months or more, personal income tax is calculated using the following formula:
Personal Income Tax = (Taxable Income – Tax-Exempt Items – Mandatory Insurance Contributions – Family Allowances – Other Deductions) × Progressive Tax Rate
| Step | Taxable income/month |
Tax |
| 01 | Up to 10 million VND | 5% |
| 02 | Over 10 to 30 million VND |
10 % |
| 03 | Over 30 to 60 million VND | 20 % |
| 04 | Over 60 to 100 million VND |
30 % |
| 05 | Over 100 million VND |
35 % |
According to Article 9 of the Personal Income Tax Law No. 109/2025/QH15
In this case No employment contract signed, or a contract signed for less than 03 months., tax-deducting payment organization 10 % before paying with each payment from 5 million VND or more. Individuals with incidental income who have had 10% deducted do not need to re-declare this income if the average income does not exceed 15 million VND/month.
Without business registration: service fees are treated as salaries or wages.
Point c, Clause 2, Article 8 of Decree 253/2026/ND-CP
Article 8. Income from salaries and wages
...
"Remuneration received from providing services by individuals who are not registered for business or tax purposes, whether or not they possess a license or professional certificate."
This regulation directly impacts individuals practicing self-employment: consultants, designers, trainers, freelance brokers, technology freelancers, content creators who receive service fees, etc. When individuals not yet registered as a business or register for tax purposes for business activities, all remuneration received falls under the category of salaries and wages: the paying organization 10% withholding tax with each payment of 5 million VND, and at the end of the year, the individual is subject to final settlement. The progressive tariff rate is applied in stages up to 35%..
Risk of progressive personal income tax arrears.
Case Providing services without business registration.Individuals face the risk of being subject to back taxes when tax authorities conduct audits and reassess the nature of income as salary or wages for service provision activities.
At that time, the tax was recalculated according to a progressive tax rate system with the highest tax rate reaching 35%; The difference will be collected retrospectively, along with late payment penalties and administrative fines for tax violations.Given that data on money flows through banks, e-commerce platforms, and digital platforms are already connected to tax authorities, the potential for verification and detection is very high.
💡 Example: A consultant receives a total service fee. 1,5 billion VND/year from businesses.
Case A: Has a business registration.
Personal income tax from business activities providing services.
≈ 10 million VND/year
For the service sector, choose the percentage-based method on revenue: (1,5 billion - 1 billion) × 2% = 10 million VND. Issue invoices and declare according to the regulations for household and individual businesses.
Case B: No business registration
Personal income tax on salaries and wages for providing services.
≈ 286 million VND/year
Taxable income = 1,5 billion - 186 million (personal deduction) = 1,314 billion VND/year; applying the 5-tier progressive tax rate, the portion of income exceeding 100 million VND/month is subject to a 35% tax rate.
(*) The figures are rounded and for illustrative purposes only; they do not include value-added tax, insurance, and other deductions or obligations specific to each case.
Recommended actions
- Self-employed individuals: Review your tax registration status. If your activities are business-oriented (regular, self-organized, and at your own risk), consider registering as a household business or individual business and registering for taxes to apply the correct mechanism for income from business activities.
- Property landlord: Monitor total rental revenue for the year against a threshold of 1 billion VND; clearly state the agreement for filing and paying on behalf of others in the contract when the lessee is a business or organization.
- The company that pays: Properly categorize each contract with individuals — require invoices from registered household and individual businesses; deduct 10% from fees paid to individuals without business registration.
- Preparing for the 2026 financial settlement: The regulations on income from business activities and salaries/wages apply to the entire tax period of 2026; tax returns filed from January 1, 2026 to before July 1, 2026 do not need to be resubmitted but will be directly adjusted in the annual tax return.