According to Circular 111/2013 issued by the Ministry of Finance, bonuses are not exempt from taxable income. Therefore, the 2026 Lunar New Year bonus is subject to personal income tax, calculated as part of an employee’s salary and wage income.
The 2025 Law on Personal Income Tax, adopted by the National Assembly on December 10, 2025, will apply from the 2026 tax year for income from salaries and wages of resident individuals. The taxable income is determined at the time the organization or individual pays the income. Thus, Lunar New Year bonuses paid after January 1, 2026, will be subject to the new family deduction rates.
Specifically, Resolution 110/2025 of the Standing Committee of the National Assembly sets the family deduction for taxpayers at 15.5 million VND per month (186 million VND per year), with an additional deduction of 6.2 million VND per month for each dependent.
Additionally, the progressive tax brackets have been adjusted from 7 to 5 tiers, with rates of 5%, 10%, 20%, 30%, and 35%. These adjustments to the family deduction and tax brackets allow employees to retain a higher portion of their salary and bonuses compared to previous years.
Lunar New Year bonuses are classified as taxable personal income.
Beyond bonuses, many companies host year-end and New Year parties with lucky draws and raffles. According to tax authorities, winnings are subject to personal income tax if the prize value exceeds 10 million VND per win.
The Dong Nai Tax Department clarifies that any prize value above 10 million VND, regardless of the number of wins, is taxed at a flat rate of 10%. The taxable income is determined at the time the prize is awarded, and companies are responsible for withholding the tax before disbursing the winnings to employees.
Companies also question whether gifts to employees, such as Lunar New Year gifts, are subject to income tax from salaries and wages.
The Tax Department states that, under Circular 111/2013, if gifts are considered monetary or non-monetary benefits provided by the employer, they are classified as taxable income from salaries and wages. In such cases, companies must withhold tax accordingly.
In summary, not only Lunar New Year bonuses but also winnings and gifts from employers, if they meet the specified conditions, may incur tax liabilities.
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