Circular 87, issued by the Ministry of Finance, outlines new provisions for implementing the Law on Personal Income Tax.

Under the new regulations, dependents will now be eligible for family deductions if their average annual income from all sources does not exceed 3 million dong per month. This new threshold is three times higher than the previous 1 million dong limit.

The income threshold for dependents had remained at 1 million dong per month since 2013. Over the past decade, significant changes in prices, living expenses, and public income rendered this threshold outdated. The Ministry of Finance previously stated that the 3 million dong dependent income threshold now surpasses the average increase in spending and income observed over the past 12 years and projected for the future. This figure also exceeds the new urban poverty line.

Statistics indicate a clear improvement in people's living standards. Specifically, average per capita spending in 2024 reached approximately 2,98 million dong per month, an increase of about 1,6 times compared to 2014. Average per capita income reached 5,15 million dong per month, approximately two times the 2,64 million dong recorded in 2014. The poverty and near-poverty thresholds are set at 2,2 million dong per person per month for rural areas and 2,8 million dong for urban residents.

Effective 1/1/2026, the family deduction for taxpayers will be 15,5 million dong, and for dependents, 6,2 million dong. Additionally, starting 1/7, taxpayers can deduct up to 47 million dong annually for medical and educational expenses before personal income tax calculation. The remaining amount is considered taxable personal income.

Cash transaction at a bank branch. Photo: Giang Huy

Taxpayers are responsible for determining the eligibility of their dependents and accurately declaring their dependents' income. The circular also outlines the documentation required to prove dependent status for family deductions. This includes: children, spouses, parents, and other individuals without support directly cared for by the taxpayer. For dependents unable to work, additional documentation proving their incapacitation is required, in addition to relationship proof.

Furthermore, the circular also provides guidance on personal income tax for derivative securities transfers, with a tax rate of 0,1% on each transfer. For futures contracts, the taxable income is determined when buy or sell orders are matched on the stock exchange's trading system or when the contract matures.

By Phuong Dung