Vietnam’s Personal Tax Code: Key Changes under Circular 86

Starting July 1, 2025, Vietnam will streamline tax data for the national population database by using citizen identification numbers as personal tax codes. The new measure, accompanied by other revisions under the newly introduced Circular 86/2024/TT-BTC, is expected to implement significant changes to Vietnam’s personal income tax (PIT) regime.

Vietnam’s Ministry of Finance has issued Circular 86/2024/TT-BTC (“Circular 86”), outlining updated tax registration regulations in accordance with Article 35 of the Law on Tax Management. Under this provision, personal identification numbers will replace Vietnam’s personal tax codes, commonly referred to as tax identification numbers (TINs), for all individuals nationwide.

Effective from February 6, 2025, Circular 86 supersedes Circular 105/2020/TT-BTC, dated December 3, 2020, which previously governed tax registration procedures. This article examines the key amendments and additional requirements introduced by Circular 86 that businesses must implement to ensure compliance.

Vietnam’s new personal tax code regime

A Vietnamese citizen’s personal identification (ID) number consists of 12 digits and is issued by the Ministry of Public Security. For minors, this ID number is recorded on their birth certificates.

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The ID number is used for issuing identity cards and accessing citizen information in the National Population Database, as well as in other national databases, specialized databases, national data centers, public service portals, and administrative procedure settlement systems.

According to Clause 5, Article 5 of Circular 86, the ID number will replace the tax code or TIN for the following cases:

• Individuals with income subject to personal income tax (PIT) (except for business individuals);
• Individuals classified as dependents under the PIT Law; and
• Organizations, households, and other individuals with obligations to the state budget.

Additionally, the personal identification number of a household representative, business household representative, or business individual will serve as the tax code for the respective household, business household, or business individual.

To ensure accurate taxation, tax authorities must verify that the national population database contains complete taxpayer information, specifically in three key fields: full name, date of birth (including day, month, and year), and either the citizen identification number or taxpayer identifier, which grants access to the Ministry of Public Security’s database.

Individuals can retrieve their identification numbers from their identification cards.

Other key changes

In addition to replacing tax codes with ID numbers, Circular 86 introduces several other changes to Vietnam’s tax registration regime. These include the requirement for foreign companies engaged in e-commerce and digital activities to register for a tax code, as well as new guidelines for cases where taxpayers do not operate from their registered address, among other updates.

Tax registration for business households, individual businesses, households, and individuals

With the transition from tax codes to ID numbers, Circular 86 introduces a dedicated chapter (Chapter III) outlining tax registration procedures for business households, individual businesses, households, and individuals. Chapter III includes the following procedures:

• Initial tax registration;
• Changes to tax registration information;
• Temporary suspension of business operations;
• Termination of tax code validity; and
• Restoration of tax code validity.

Application of the National Population Database, identification, and electronic authentication in tax registration procedures

Tax authorities will leverage personal data from the National Population Database, as part of the plan to connect and share information with the tax database, streamlining the tax registration process for taxpayers. This data must be stored and protected to ensure safety and confidentiality, in accordance with legal requirements.

When information is already available in the National Population Database and has been connected with the tax database, taxpayers will not be required to resubmit their details to the tax authorities.

Organizations and individuals will utilize electronic identification accounts, created through Vietnam’s Electronic Identification and Authentication System (e-ID), to complete tax registration procedures.

Handling procedures for taxpayers according to the backup process

Article 37 of Circular 86/2024/TT-BTC outlines the procedures for handling taxpayers according to the backup process. Tax authorities will process tax registration applications through this backup procedure under the following circumstances:

• When the tax registration application system, the National Business Registration Information System, or the National Population Database System experiences technical issues; or
• In other cases of force majeure.

Changes to tax registration forms

Circular 86/2024/TT-BTC introduces revisions to several tax registration forms, replacing those previously issued under Circular 105/2020/TT-BTC.

Transitional phases

To support the upgrade of the information technology application system, Circular 86 will be implemented in two phases:

• Phase 1 (Effective February 6, 2025): All provisions of the Circular, except for the tax-related function concerning ID numbers, will take effect.
• Phase 2 (Effective July 1, 2025): ID numbers will officially replace tax codes. As a result, tax codes will no longer be assigned to the business locations of individual businesses and households.

The implementation of Circular 86 will also repeal Circular No. 105/2020/TT-BTC, dated December 3, 2020, following the same two-phase approach.

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According to the General Department of Taxation, individuals who receive a citizen identification card are automatically assigned a tax code. This process prevents data duplication and ensures that each taxpayer has a unique tax code, improving the accuracy and transparency of tax management. Taxpayers who have not yet transitioned to an ID card must complete this process before ID numbers officially replace tax codes to avoid potential complications.

To facilitate a smooth transition, tax authorities have been reviewing and standardizing personal tax codes since 2023. As of January 20, 2025, the matching review rate exceeds 90 percent. If a taxpayer’s ID number aligns with the National Population Database, no further action will be required.

Implications of the new measure

The transition from tax codes to ID numbers will eliminate the issue of individuals possessing multiple tax codes, which has previously complicated tax settlements and refunds.

Currently, Vietnamese citizens must undergo separate procedures to obtain ID numbers, tax codes, and insurance codes. The new system will integrate this information into a single administrative source, streamlining compliance and reducing bureaucratic redundancies.

For state management agencies, this policy enhances data synchronization across various government databases, enabling faster data retrieval, more efficient analysis, and seamless information exchange. As a result, administrative procedures will be processed more quickly, accurately, and comprehensively. Beyond tax management, the measure also strengthens oversight in areas such as e-commerce and network security.

Moreover, using ID numbers as tax codes will benefit both individuals and businesses by reducing time and administrative costs. Businesses, in particular, will face fewer risks of administrative sanctions related to tax compliance, as they will no longer need to update or modify employee tax codes.

Conclusion

The implementation of Circular 86/2024/TT-BTC represents a major shift in Vietnam’s tax registration process, with citizen identification numbers set to replace personal tax codes starting July 1, 2025. However, foreign experts working in Vietnam will continue to use tax codes issued by the tax authorities.

Businesses and individuals must familiarize themselves with the updated procedures and regulations to ensure compliance, including changes to tax registration forms and processes.

This initiative reflects Vietnam’s commitment to modernizing its tax system and improving efficiency in tax administration.

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