Revised Title: Amended Personal Income Tax Law: Does It Lack Support Mechanisms for Freelancers?

Proposed Deduction of Reasonable Expenses in Tax Calculation

The Ministry of Finance has noted that new business models have generated additional income streams for individuals, beyond those already taxed. In response, the draft Personal Income Tax (PIT) Law proposes expanding the list of taxable income sources. Notably, the taxation of e-commerce workers has sparked significant debate.

Nguyen Nhat Thanh Duong, an Affiliate Marketing specialist in Hanoi, highlights the informal nature of this work, lacking traditional employment contracts. He argues that affiliates face a progressive tax rate of up to 35%, akin to salaried workers, without access to social insurance benefits. Additionally, tax authorities lack mechanisms to deduct legitimate business expenses.

“I propose categorizing digital economy workers (affiliates, freelancers, content creators) separately from salaried employees. Instead of progressive taxation, apply a flat tax of 3-10% after allowing expense deductions,” Duong suggests.

Nguyen Quang Thu from Ho Chi Minh City emphasizes the need to monitor cross-border digital transactions. While taxing YouTubers, affiliates, and international traders is fair, he warns against blanket assumptions of tax evasion. Thu advocates for clear, realistic tax policies.

“PIT is levied on revenue, not profit. Online sellers and traders incur significant costs (advertising, transaction fees), yet deductions aren’t permitted. Taxing revenue without allowing for losses is unfair and impractical. The PIT policy also lacks support for freelancers. A voluntary, simplified tax scheme would encourage compliance,” Thu proposes.

Thu further notes the ambiguity surrounding international financial investments (Forex, crypto, global stocks). While not yet legalized, there are indications of potential taxation, creating confusion and risk for taxpayers.

The Ministry of Finance acknowledged these concerns, pledging to refine PIT regulations for individual income sources.

Concerns Over Crypto Asset Taxation

The draft PIT Law introduces a 0.1% tax on digital asset transfers (virtual and crypto assets). Binance, a leading crypto exchange, suggests classifying such income as capital gains, aligning with international practices. They cite the Digital Technology Industry Law, which recognizes digital assets as legal property.

“Most countries (Australia, Singapore, UK) treat crypto investment profits as capital gains. Adopting global standards would ensure consistency and a competitive tax environment for crypto investors,” Binance recommends.

The Ministry of Finance confirmed that the proposed rate mirrors securities taxation. Previously, the lack of legal framework hindered crypto taxation. However, the Digital Technology Industry Law, effective 2026, provides the necessary legal basis.

The Tax Policy Department (Ministry of Finance) stated that taxable activities involving digital assets include VAT, PIT, and corporate income tax. The initial 0.1% PIT rate per transaction balances administrative feasibility with practical implementation.