Personal income tax finalization in Vietnam: what employers file for 2026

Personal income tax finalization in Vietnam is the annual true-up of employment income tax: the year's tax is recalculated on the full year's income and compared with what was withheld each month. An employer that pays salaries files its own finalization return, covering the tax it withheld, and finalizes on behalf of employees who have authorised it (Article 51(1) and (2) of Decree 253/2026/ND-CP). For the 2026 tax year the employer files form 05/QTT-TNCN with its schedules by 31 March 2027 (Article 10(5)(a) of Decree 252/2026/ND-CP).

The 2026 round of PIT finalization in Vietnam is a transition year. The new Law on Personal Income Tax No. 109/2025/QH15 took effect on 1 July 2026, but its rules on employment income of residents apply to the whole 2026 tax period (Article 29(2)). Payroll for January to June was withheld under the old rules, so the finalization filed in early 2027 has to recompute the entire year under the new schedule. This guide to PIT finalization in Vietnam is for HR, payroll and finance teams of foreign-invested companies; the residency, rates and benefits of expatriates are covered in our guide on personal income tax for foreigners in Vietnam.

What changes in personal income tax finalization in Vietnam for 2026?#

Almost every text behind the process has been replaced. On the substance, Law 109 replaces the 2007 Law on Personal Income Tax (Article 29(3) of Law 109), Decree 253 replaces Decree 65/2013/ND-CP (Article 69(2) of Decree 253), and Circular 87/2026/TT-BTC replaces Circular 111/2013/TT-BTC (Article 6(2) of Circular 87). On procedure, Law 108/2025/QH15 on Tax Administration replaces Law 38/2019/QH14 from 1 July 2026 (Article 52), Decree 252 replaces Decree 126/2020/ND-CP (Article 74(3)(a)), and Circular 89/2026/TT-BTC repeals Circular 80/2021/TT-BTC (Article 99(3)(h)). Checklists that still cite Decree 126 or Circular 80 are out of date for the 2026 year.

Item	2026 tax year	Basis
Tax schedule for employment income	Five bands, 5% to 35%, applied to all 12 months	Article 9 and Article 29(2) of Law 109
Personal allowance	VND 15.5 million a month (VND 186 million a year); VND 6.2 million a month per dependant	Article 10(1) of Law 109
New deductions	Domestic medical costs within the health-insurance list, up to VND 23 million a year; domestic education and training, up to VND 24 million a year	Article 11(2) of Law 109; Article 49(2) of Decree 253
Overtime and night-work pay within legal limits	Exempt; on the new wording, no longer limited to the premium over normal hourly pay	Article 4(8) of Law 109; Article 26 of Decree 253
Severance and job-loss allowances	Not taxable, including amounts above the statutory level if set in internal rules, the contract or a collective agreement	Article 8(3)(h) of Decree 253
Meal allowance	Paid in cash: only the excess over VND 1.2 million per person per month is taxable; meals the employer provides in kind, buys or covers with vouchers are not taxed. From 1 July 2026	Article 8(2)(g) and Article 69(1)(b) of Decree 253
Additional tax of VND 50,000 or less	Exempt, with its own line [41] on form 05/QTT-TNCN	Article 32(2)(a) of Decree 252

What happens to January to June? Where 2026 employment income was declared and taxed under the old rules between 1 January 2026 and 30 June 2026, the monthly or quarterly returns are not refiled; the employer makes the adjustment in the 2026 finalization return (Article 70(2) of Decree 253). The second-quarter return, filed after 1 July 2026, falls outside that wording; on our reading its difference is also settled at finalization, because a quarterly return only reports the tax actually withheld. Secondary sources report that Resolution 110/2025/UBTVQH15 already raised the allowances to VND 15.5 million and VND 6.2 million from January 2026 (we have not checked that resolution against an official text), so for most payrolls the first-half difference comes from the old seven-band schedule. Two traps: the VND 1.2 million meal threshold starts only on 1 July 2026 (Article 69(1)(b)), while the overtime and severance exemptions are rules on employment income and, on our reading, apply to the whole of 2026 (Article 69(1)(a)). The open questions on the overtime exemption are discussed in our guide to overtime rules in Vietnam.

Which employers must file personal income tax finalization in Vietnam?#

Every organisation that pays salaries or wages finalizes annually (Article 51(1) of Decree 253), and Circular 89 adds that it does so whether or not any tax was actually withheld (Article 22(1)(a.2.1)). A small subsidiary whose staff are all below the threshold still files. The only exception is an organisation that paid no salary or wages at all in the year (Article 11(7) of Decree 252), for example one that was suspended for the whole year with no payroll.

Form 05/QTT-TNCN has two parts. Part I reports the employer's withholding duty for everyone it paid: headcount, income subject to tax, exempt income and tax withheld, for residents and non-residents alike. Part II covers only employees who authorised the employer: annual tax due, tax withheld, exemptions, tax still payable and tax overpaid. When an employee finalizes personally, the tax information system helps compile all salary sources and amounts withheld (last paragraph of Article 51(1)), so errors in the employer's data tend to show up on the employee's own return.

Who can authorise the employer to handle personal income tax finalization in Vietnam?#

An employee may authorise the employer, even without working the full 12 months, in only two situations (Article 51(2) of Decree 253):

1. One source of employment income, under a labour contract of 3 months or more with one organisation, and actually working there at the time of finalization. Transfers from an old to a new organisation through a merger, consolidation, division, separation or conversion, or between organisations in the same group, count as one source (point a).
2. The same, plus other income averaging no more than VND 15 million a month over the year on which the payer withheld 10% (point b). That extra income is left out of the finalization.

Even an eligible employee must finalize personally to claim tax relief for natural disaster, epidemic, fire, accident or serious illness, or to deduct the items in Article 49: charitable and education-fund donations and the two new deductions for medical and education costs (Article 51(3)). This is the biggest practical change: staff who want school fees or medical bills (their own or a dependant's) taken into account cannot hand the job to the employer.

Employees the employer should not accept authorisation from:

• Those who left before the employer files.
• Those who joined mid-year from another employer (two sources), unless transferred under point (a).
• Those on contracts under 3 months or without a labour contract.
• Those with side income averaging over VND 15 million a month, or not withheld at 10%.
• Those also paid directly by a foreign entity, who declare that income quarterly themselves (Article 22(1)(c.1.2) of Circular 89); on our reading this is a second source.

The authorisation for PIT finalization is given on form 08/UQ-QTT-TNCN before the employer finalizes (Article 22(1)(b) of Circular 89; Appendix I, item 7.1). The form number is unchanged from Circular 80; the copy of Circular 89 we reviewed does not reproduce the form itself. Authorisation for PIT finalization is the employee's choice ("may authorise" in Article 51(2)), so do not tick it for the whole payroll.

PIT finalization deadline in Vietnam and special cases#

The finalization period for personal income tax is the calendar year (Article 9(2)(dd)(2) of Decree 252). Article 10(5) of Decree 252 sets the deadlines:

Who files	Deadline for 2026	Basis
Employer, including on behalf of authorising staff	31 March 2027	point (a)
Employer that is dissolved, terminates operations, is divided, separated, merged or consolidated	45th day after the decision	point (b)
Employee finalizing personally	Last day of the 4th month after year-end (30 April 2027, see below)	point (c)
Resident foreigner whose contract ends	Before leaving Vietnam, and no later than 45 days after the contract ends	point (d)

Tax still payable is due by the same PIT finalization deadline in Vietnam as the return (Article 14(1)(a) of Law 108). A deadline falling on a day off moves to the next working day (Article 3(7) of Decree 252); 30 April 2027 is a public holiday, so the individual deadline moves to the first working day after the holiday, depending on the 2027 holiday calendar. An extension of up to 60 days is available only for force majeure, meaning material damage from natural disaster, catastrophe, epidemic, fire, sudden accident or other cases set by the Government (Article 4(21) and Article 12(4)(a) of Law 108); missing paperwork is not one of them.

On our reading, the 45-day deadline in point (b) also covers the personal income tax finalization of a company being dissolved or reorganised, as Article 10(5) does not distinguish between taxes. Where employees are transferred, the new organisation finalizes for them including income paid by the old one and collects the old employer's withholding certificates (Article 22(1)(a.2.2) of Circular 89); box [04] on form 05/QTT-TNCN flags this case and line [39] shows the tax the old employer withheld. The wider process is described on our company dissolution in Vietnam service page.

Forms for personal income tax finalization in Vietnam#

Under item 7.1 of Appendix I to Circular 89, the employer files:

• Form 05/QTT-TNCN, the employer's finalization return for salaries and wages.
• Schedule 05-1/BK-QTT-TNCN, individuals taxed at progressive rates.
• Schedule 05-2/BK-QTT-TNCN, individuals taxed at flat rates (10% withholding on short contracts and non-contract payments; 20% for non-residents).
• Schedule 05-3/BK-QTT-TNCN, dependants claimed.

The numbers are the same as under Circular 80, but the templates are new. Old templates may be used only for tax periods before 1 July 2026 (Article 100(1) of Circular 89); as the 2026 year ends on 31 December 2026, on our reading the new templates apply. Lines worth noting include [41] for tax exempted because the amount still payable is VND 50,000 or less, and [42] and [43] for the new five-year exemptions for high-quality digital-technology and high-technology personnel (Article 5(2) and (3) of Law 109). Schedule 05-1 has columns for the personal identification or passport number of staff without a tax code and for foreigners authorising finalization for less than 12 months.

During the year, employers declare withheld tax quarterly on form 05/KK-TNCN (Article 22(1)(a.1) and Appendix I item 7.1 of Circular 89). Dependants must be registered with supporting papers before 31 December of the tax year (Article 48(2)(a) of Decree 253), and the employer registers tax codes for dependants no later than 31 December (Article 6(3)(dd) of Decree 252). Children in higher or vocational education, a spouse, parents and other dependants count only if their average monthly income does not exceed VND 3 million (Article 47(2)(c), (d), (dd) and (3) of Decree 253; Article 3(1) of Circular 87); children under 18 are not subject to that income test.

Illustration: a five-person payroll#

A hypothetical. "Withheld" amounts are assumed; income subject to tax excludes exempt items; insurance is the employee's share. All figures in VND million.

• Lan, chief accountant. One employer all year, income subject to tax 420, compulsory insurance 42, one dependent child registered from January. She authorises the employer. Assessable income = 420 − 42 − 186 − 74.4 = 117.6; tax at 5% = 5.88. Withheld 7.2, so 1.32 overpaid (column [23] of schedule 05-1).
• Binh, sales manager. Income subject to tax 720, insurance 60, no dependants; he also earns an average of 6 a month as a consultant elsewhere without a labour contract, withheld at 10%. He can still authorise (Article 51(2)(b)), and the side income stays out. Assessable income = 720 − 60 − 186 = 474; tax = 120 × 5% + 240 × 10% + 114 × 20% = 52.8. Withheld 50, so 2.8 still payable (column [24] of schedule 05-1).
• Cuong, engineer. Joined on 1 August 2026 after seven months with another company: two sources, so he finalizes personally. When he does, he receives the full 12-month personal allowance even though the employer applied it for five months only (Article 48(1)(b) of Decree 253).
• Dung, HR officer. Eligible, but wants to deduct 24 for her dependent child's university fees, so she must finalize personally (Article 51(3)).
• Hai, warehouse staff. Left on 15 November 2026 and receives a year-end bonus of 10 on 20 January 2027. The employer withholds 10% because Article 50(2) of Decree 253 covers payments to people whose contract has ended, and the bonus falls in 2027 because income is recognised when paid (Article 8(3) of Law 109; Article 46(3) of Decree 253). The same rule decides which year a Tet bonus falls in; see our note on the 13th month salary in Vietnam.

The employer reports two authorising employees (line [37]) and lists all five on schedule 05-1. On form 05/QTT-TNCN itself, lines [44] and [45] use a pooled formula across all authorising staff ([40] − [38] − [41] − [42] − [43]): (5.88 + 52.8) − (7.2 + 50) = 1.48, so the employer enters 1.48 in line [44], pays it by 31 March 2027 and leaves [45] blank. On our reading, Lan's 1.32 is then absorbed against Binh's 2.8 on the same return, so the employer still has to repay her internally. A shortcut derived from Article 9 of Law 109 for annual assessable income X (VND million): up to 120, 5% × X; over 120 to 360, 10% × X − 6; over 360 to 720, 20% × X − 42; over 720 to 1,200, 30% × X − 114; over 1,200, 35% × X − 174.

Data checks before personal income tax finalization in Vietnam#

1. Reconcile 12 months of payroll with the four quarterly returns; differences from the old-rule quarters go into the annual return, not amended quarterly returns (Article 70(2) of Decree 253; for the second quarter, our reading as explained above).
2. Recompute the full year on the five-band schedule for every authorising employee.
3. Allocate income by payment date: December 2026 pay paid in January 2027 belongs to 2027 (Article 46(3) of Decree 253).
4. Keep evidence for exempt items: overtime and night-work logs (Article 26 of Decree 253), the internal rule on severance, the meal policy. Pay policies also support the corporate income tax deduction, see building a salary scale in Vietnam.
5. Cap voluntary pension, supplementary pension and life insurance deductions at VND 3 million a month combined (Article 46(2)(a) of Decree 253).
6. Check that each dependant is claimed by one taxpayer only (Article 10(3) of Law 109).
7. Confirm each authorising employee is still employed at filing and has been asked about side income and planned medical or education deductions.
8. Check 10% withholding on payments of VND 5 million or more to short-contract and non-contract individuals (Article 50(2) of Decree 253).

Leavers, transfers and expatriates going home#

Leavers cannot authorise their former employer. On our reading, an authorisation signed before leaving does not help, because Article 51(2) looks at whether the person is actually working there at the time of finalization. Payments made after termination of VND 5 million or more are withheld at 10% (Article 50(2)). See also how to terminate an employment contract in Vietnam.

Expatriates. A resident foreigner whose contract ends must finalize before leaving Vietnam or authorise another organisation or individual to do so (Article 50(3)(c) of Decree 253), within 45 days after the contract ends (Article 10(5)(d) of Decree 252). A first-year arrival may have a 12-month finalization period instead of the calendar year (Article 9(2)(dd)(2) of Decree 252), so that person does not fit the March cycle. Where the Vietnamese company reimburses salary costs to a foreign parent, the company is the withholding party (Article 50(3)(c)). Residency tests and the expatriate package are in our personal income tax for foreigners in Vietnam guide.

Refunds, shortfalls and late-filing fines#

An employer finalizing for authorising staff may claim a refund of overpaid tax (Article 29(2)(a) of Decree 252) using form 01/DNXLNT in Appendix III to Circular 89 (Article 56(1)(a)). An individual overpayment of VND 50,000 or less is not refunded but carried forward (Article 29(4)(a) of Decree 252). Late payment attracts interest of 0.03% a day (Article 16(2)(a) of Law 108), and a withholding organisation that pays late or short owes that interest instead of the taxpayer (Article 16(1)(h)).

Fines still follow Decree 125/2020/ND-CP, as amended, which remains in force after 1 July 2026 until replaced (Article 74(4) of Decree 252). The amounts in Article 13 are for organisations (Article 7(4)(a)); individuals pay half (Article 44(4) of Law 108).

Return filed late by	Fine for an organisation (VND)	Article 13
1 to 5 days, with a mitigating circumstance	Warning	clause 1
1 to 30 days	2 million to 5 million	clause 2
31 to 60 days	5 million to 8 million	clause 3
61 to 90 days; over 90 days with no tax payable; or not filed with no tax payable	8 million to 15 million	clause 4
Over 90 days with tax payable, tax and interest paid before an audit decision or a violation record	15 million to 25 million, capped at the tax due but not below the midpoint of clause 4	clause 5

The fine applied is normally the midpoint of the range, moved 10% down or up for one mitigating or aggravating factor, or to the minimum or maximum with two or more (Article 7(4)(d)). Not filing, or filing more than 90 days late, where tax is payable is treated as tax evasion (Article 45(4)(a) of Law 108), fined at one to three times the tax evaded (Article 44(3)(c)). Only a return filed more than 90 days late on which the tax and interest were paid in full before an audit decision or violation record is downgraded to the procedural fine (Article 45(4)(l)), which is the clause 5 band above. An individual who finalizes late but is owed a refund is not fined (Article 44(2)(a)); that exception does not cover the employer's return.