In Vietnam, overtime pay exempt from personal income tax starting July 1

The revised law, which takes effect on July 1, also introduces several tax relief measures.

Taxpayers can claim family-related deductions for medical and education expenses, with maximum amounts proposed by the Ministry of Finance at VND24 million (US$912) per year for education and VND23 million ($875) per year for healthcare.

Combined with existing deductions of VND15.5 million ($590) per month for the taxpayer and VND6.2 million ($235) per month for each dependent, workers could save up to VND47 million ($1,790) annually in extra deductions.

According to the Ministry of Finance, a worker with one dependent will only start paying personal income tax if their monthly salary exceeds VND28.6 million ($1,090).

The revised law also expands the list of tax-exempt income to 20 categories.

Tax exemptions continue to apply to income from the transfer, inheritance or gifting of real estate between spouses, parents and children, adoptive parents and adopted children, grandparents and grandchildren, and siblings.

Income from the transfer of a person's only home, residential land and related property in Vietnam also remains exempt.

Other tax-exempt income includes land-use rights allocated by the state; income earned by households and individuals directly engaged in agriculture, forestry, fisheries and salt production from unprocessed products; interest from government bonds, local bonds, bank deposits, and life insurance contracts; remittances from abroad; and income from scientific research, technology and innovation activities.

The law also exempts royalties generated from scientific and technological research when research results are commercialized in line with prevailing regulations.

Additional tax exemptions apply to income earned by individual investors and experts participating in innovative start-up projects, founders of start-up projects, individual investors with venture capital contributions, foreign experts working in ODA-funded or NGO projects, Vietnamese employees of United Nations agencies in Vietnam, and individuals serving in United Nations peacekeeping missions.

In addition, income received by owners of private enterprises or one-member limited liability companies after corporate income tax has been paid will be exempt from personal income tax.