Supplementing deductions for medical and educational expenses when calculating taxes
The Government has just issued Decree 253/2026/ND-CP detailing a number of articles and measures to organize and guide the implementation of the 2025 Personal Income Tax Law, replacing Decree 65/2013/ND-CP.
One of the notable new points is that taxpayers who are resident individuals are entitled to deductions from taxable income before tax calculation for expenses for health, education - training of themselves and dependents when determining income from salaries and wages.
Accordingly, taxpayers are entitled to deductions for medical examination and treatment expenses at domestic medical facilities within the scope of the list paid by health insurance, with a total deduction of a maximum of 23 million VND/year.
For education and training, the maximum deduction is 24 million VND/year for tuition fees at domestic education and training institutions, including tuition fees for preschool education, general education, vocational education, higher education according to the provisions of education law and other professional skills training courses.
According to calculations by the Ministry of Finance, in case a taxpayer has one dependent and has an income of 28 million VND/month, after deducting insurance premiums, personal deductions, deductions for dependents and health and education deductions at the maximum level, personal income tax is still not yet payable.
In this case, only from an income level of about 28.63 million VND/month or more, the taxpayer will begin to incur tax obligations for the excess income, with a tax rate of 5% and a very small amount of tax payable.
According to the drafting agency, the new policy clearly shows humanity when contributing to reducing tax obligations for people.
Assessing the new regulations, Ms. Nguyen Thi Ha (35 years old, office worker in Hanoi) said that allowing deduction of medical and educational expenses before calculating personal income tax is suitable for the reality of many young families in large cities.
According to Ms. Ha, the current income level seems high, but after deducting rent, tuition fees and living expenses, many families still face great financial pressure.
My family has two young children, each month tuition alone is more than ten million VND. If additional education and medical expenses are reduced, it will provide a lot of support for young families," Ms. Ha shared.
Meanwhile, Mr. Nguyen Thanh Tung (36 years old, information technology staff in Hanoi) said that his family has two young children, so the pressure to spend is very high even though the income is not low.
Each month, my family loses about 10 million VND just for tuition, semi-boarding, English classes and arising expenses for my two children. Not to mention rent, living expenses, electricity and water, travel expenses. There are months when my child is sick and has to go to the hospital or check-ups outside of hours, the cost increases a lot," Mr. Tung said.
According to him, the maximum deduction of 24 million VND/year for education costs is still quite low.
Divided into only about 2 million VND per month, while currently many families have tuition fees for one child that are already higher than that level. I think there should be a flexible mechanism according to the number of children or according to the living area to be closer to reality," he proposed.
Sharing the same view, Dr. Nguyen Ngoc Tu, Lecturer at Hanoi University of Business and Technology, said that with the current cost level, the health expenditure reduction should be increased to about 30 million VND/year. Although health insurance has paid for most of the medical examination and treatment costs, people still have to pay for many arising expenses themselves.
Regarding education, he proposed raising the deduction level to about 50-60 million VND/year, because in addition to studying culture and foreign languages, many families also have to spend on soft skills, sports, and arts courses.
Raising the threshold for current income to be tax deductible to 5 million VND/time
Another noteworthy content is the new regulation applied to payments for salaries, wages, remuneration and other income for resident individuals who do not sign labor contracts or only sign contracts for less than 3 months, including cases where contracts have been terminated.
Accordingly, for expenses from 5 million VND/time or more, paying organizations and individuals are responsible for deducting 10% personal income tax before paying employees.
Conversely, for incomes under 5 million VND/time, the decree does not require tax deductions. In case individuals have needs, the 10% deduction can still be made at the request of the income recipient.
According to the assessment of the Ministry of Finance, the threshold of 2 million VND/time has been maintained since 2013 and is no longer suitable for changes in income as well as the price level. The increase to 5 million VND/time aims to reduce the number of cases of tax deduction for small incomes, and at the same time be more suitable for the reality of socio-economic life.
