New provisions of the 2025 Law on Personal Income Tax and their impacts on socio-economic life

The 2025 Law on Personal Income Tax No. 109/2025/QH15, promulgated on December 10, 2025 and effective from July 1, 2026, introduces several significant changes compared with the previous law. These include higher family circumstance deductions for taxpayers and dependents, a reduction in progressive tax brackets from seven to five, a higher tax-free revenue threshold for household and individual businesses, and new provisions governing income from digital platforms, digital assets, and carbon credits. This study analyzes and compares these major changes and evaluates their expected socio-economic impacts. The reforms are intended to reduce taxpayers’ financial burden, support household welfare, encourage production and business activities, improve tax equity, and enhance the adaptability of the tax system to emerging forms of economic activity.