Regulations on direct and authorized settlement of personal income tax in Vietnam in 2025

Regulations on direct and authorized settlement of personal income tax in Vietnam in 2025​ (Image from the Internet)

Note: The personal income tax settlement for 2025 covers incomes earned in 2024.

1. Regulations on direct personal income tax settlement in Vietnam in 2025

According to point d.3 clause 6 Article 8 of Decree 126/2020/ND-CP, resident individuals earning income from salaries or wages must directly declare personal income tax settlement with the tax authorities in the following situations:

- If additional tax is owed or if overpaid tax is requested to be refunded or offset against the next tax declaration period, except in the following cases:

+ Individuals with additional tax payable after settlement for each year of 50,000 VND or less;

+ Individuals whose tax payable is less than the tax already paid without requesting a refund or an offset against the next tax declaration period;

+ Individuals earning income from salaries and wages under labor contracts of three months or more from a single entity, concurrently earning sporadic income at other places averaging no more than 10 million VND per month and have had personal income tax deducted at a rate of 10%, if not required, are not obliged to finalize tax for this income;

+ Individuals whose life insurance (excluding voluntary pension insurance) and other non-compulsory insurance with accumulated premiums paid by the employer have had personal income tax deducted at a rate of 10% on the equivalent insurance premium amount purchased or contributed by the employer are not required to finalize personal income tax for this income.

- Individuals present in Vietnam for less than 183 days in the first calendar year but present for 183 days or more within 12 consecutive months from the first day of presence in Vietnam.

- Foreign individuals terminating their employment contract in Vietnam must finalize their tax with the tax authorities before leaving the country. If tax settlement procedures have not been completed, authorization must be given to the income-paying organization, or another organization or individual to finalize the tax according to regulations on individual tax settlement. If an organization or individual accepts the authorization for tax settlement, it must assume responsibility for any additional tax payable or refund of overpaid tax to the individual.

- Resident individuals with income from salaries or wages who are eligible for tax reduction due to natural disasters, fires, accidents, or serious illnesses affecting tax payment ability cannot authorize the income-paying organization or individual for tax settlement, and must directly declare settlement with the tax authorities as stipulated.

2. Regulations on authorized personal income tax settlement in Vietnam in 2025

According to point d.2 clause 6 Article 8 of Decree 126/2020/ND-CP, resident individuals with income from salaries or wages can authorize tax settlement to the income-paying organization or person. To be specific:

- Individuals earning income from salaries or wages under labor contracts of three months or more at one place and actually working there at the time of tax settlement by the income-paying organization, even if not working the full 12 months within the year. If an individual is transferred from their previous organization to a new one following point d.1 clause 6 Article 8 of Decree 126/2020/ND-CP, the individual can authorize the new organization for tax settlement.

- Individuals earning income from salaries or wages under labor contracts of three months or more at one place and actually working there at the time of tax settlement by the income-paying organization, even if not working the full 12 months within the year; concurrently, they earn sporadic income elsewhere averaging no more than 10 million VND per month, with personal income tax deducted at a rate of 10%, if not required to finalize tax on this income.

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