Bank Transfers That Are Not Subject to Personal Income Tax (PIT) from 2026

Effective 1 July 2026, the Personal Income Tax Law 2025 officially comes into force, introducing several significant changes regarding the scope of taxable income. As a result, many individuals are wondering whether every amount of money transferred into their bank accounts must be declared and subjected to Personal Income Tax (PIT).

In reality, the tax authority does not determine tax liability based on whether money is transferred through a bank account. Instead, it determines tax obligations based on the nature and source of the income. Therefore, many amounts received via bank transfer are not subject to PIT, provided that the recipient can sufficiently demonstrate the origin and purpose of the transaction.

This article explains the most common types of bank transfers that are not subject to Personal Income Tax, along with important recommendations to minimize tax risks during inspections or audits conducted by the tax authorities.

Personal Income Tax Is Determined by the Nature of Income, Not by the Method of Payment

Recently, numerous discussions on social media have led many people to believe that every amount transferred into a personal bank account may automatically be subject to Personal Income Tax.

In reality, this understanding is inaccurate.

Under Vietnamese tax law, tax liability only arises when the money received constitutes taxable income as defined under the Personal Income Tax Law.

Whether the payment is made in cash or via bank transfer is merely a payment method and is not the basis for determining tax liability.

From 2026 onwards, the Personal Income Tax Law 2025 expands the list of taxable income to include several new categories, such as:

• Transfers of digital assets;

• Transfers of gold bullion;

• Transfers of ".vn" domain names;

• Carbon credit transfers;

• And several other newly regulated income sources.

However, this does not mean that every bank transfer must be declared for tax purposes.

The key is that taxpayers correctly identify the nature of each transaction and retain sufficient supporting documentation whenever necessary.

09 Common Types of Bank Transfers That Are Not Subject to Personal Income Tax

The following are common types of bank transfers that generally do not give rise to Personal Income Tax obligations, provided the applicable legal conditions are satisfied.

1. Loans Between Family Members or Friends

Money transferred between relatives or friends for lending or borrowing purposes is, by nature, a civil transaction rather than income derived from business or investment activities.

Therefore, these funds are not subject to Personal Income Tax.

Nevertheless, recipients should retain supporting documents such as:

• Loan agreements;

• Written confirmations;

• Bank transfer descriptions stating purposes such as "loan," "temporary borrowing," or "financial assistance."

Such documentation can significantly facilitate explanations should the tax authority request clarification in the future.

2. Temporary Funds Used to Repay Bank Loans

In practice, many individuals temporarily receive funds from relatives or friends to repay an existing bank loan before refinancing with a new loan.

These transfers merely facilitate personal financial arrangements and do not generate taxable income.

Since no economic benefit is created, recipients are not required to declare or pay PIT.

However, individuals should retain loan documents and relevant banking records to demonstrate the transaction's purpose if requested.

3. Overseas Remittances from Family Members

Remittances are funds sent to Vietnam by relatives living or working abroad through licensed banks or legally authorized money transfer services.

Under current policy, overseas remittances are not subject to Personal Income Tax, as Vietnam encourages foreign currency inflows.

Individuals should nevertheless ensure that:

• Funds are transferred through legal channels;

• Supporting documentation, including bank statements and transfer records, is retained.

These documents help demonstrate the lawful origin of the funds if necessary.

4. Collection or Payment on Behalf of Others

This situation commonly applies to:

• Delivery drivers;

• Collection agents;

• Sales representatives;

• Individuals authorized to collect payments for companies or organizations.

The money collected does not belong to the recipient but merely passes through them before being transferred to the rightful owner.

Consequently, these amounts are not considered taxable income.

However, individuals should possess evidence such as:

• Authorization agreements;

• Payment records;

• Relevant supporting documents.

Without sufficient documentation, tax authorities may request clarification regarding the source of funds.

5. Transferring Money on Behalf of Another Person Without Charging a Fee

Many individuals receive money simply to transfer it to a third party on behalf of relatives or friends, without charging any service fee.

Such activities:

• Are not business operations;

• Do not generate income;

• Therefore do not create PIT obligations.

However, if an individual regularly provides money transfer services and charges a fee, the service fee received may constitute taxable income derived from service activities.

6. Proceeds from Property Sales After Tax Obligations Have Been Fulfilled

Real estate transactions often involve substantial sums transferred into personal bank accounts, leading many individuals to worry that the payment itself may be taxed again.

In reality, Personal Income Tax arising from property transfers is calculated and paid during the legal transfer procedure.

Once all applicable taxes have been fully paid and the transaction has been legally completed, the payment subsequently transferred into the seller's bank account will not be subject to Personal Income Tax for a second time.

Individuals should nevertheless retain documents including:

• Property transfer agreements;

• Tax payment receipts;

• Payment records;

• Related legal documentation.

These documents serve as essential evidence regarding the origin of the funds.

7. Salary Already Taxed and Subsequently Transferred to Family Members

After receiving salary and fulfilling Personal Income Tax obligations (where applicable), many individuals transfer part of their income to:

• Their spouse;

• Parents;

• Children;

• Other family members.

These transfers do not constitute new taxable income for the recipient but merely represent transfers of personal assets between individuals.

Therefore, recipients are not required to declare or pay Personal Income Tax.

To minimize future tax risks, the sender should retain:

• Payroll statements;

• Bank statements;

• PIT withholding certificates.

These documents demonstrate that the transferred funds originated from lawful income on which applicable tax obligations have already been fulfilled.

8. Overseas Employment Income That Has Already Been Taxed Abroad

Vietnamese citizens working overseas who transfer their salaries back to Vietnam are not automatically required to pay Vietnamese Personal Income Tax again.

In many situations, where the individual has already fulfilled tax obligations in the country where the income was earned and satisfies Vietnamese regulations together with any applicable Double Taxation Agreements (DTAs), the transferred funds will not be taxed twice.

Individuals should retain supporting documents such as:

• Employment contracts;

• Foreign tax payment certificates;

• Foreign tax withholding statements;

• Bank transfer records;

• Documentation proving the source of income.

Maintaining complete documentation makes future explanations to tax authorities significantly easier.

9. Interest Earned from Small Private Loans

It is common for individuals to lend money to relatives, friends, or acquaintances.

Where such loans:

• Are interest-free; or

• Generate only occasional and insignificant interest;

• Do not constitute regular commercial lending activities,

they are generally not regarded as taxable business activities.

However, a distinction should be made between occasional civil lending and regular lending conducted for profit.

If an individual continuously lends money on a commercial scale or regularly earns interest as a business activity, tax authorities may determine that tax obligations arise under applicable regulations.

Therefore, tax liability depends primarily on the nature and frequency of the activity, rather than simply whether money has been transferred into a bank account.

What Documents Should Individuals Retain to Prove the Source of Funds?

For transfers that are not taxable, proactively maintaining supporting documentation will facilitate explanations if requested by tax authorities.

Recommended documents include:

• Loan agreements or borrowing confirmations;

• Property transfer agreements;

• Tax payment receipts for transactions where taxes have already been settled;

• Bank statements showing transaction history;

• Employment contracts;

• Payroll records;

• Tax withholding certificates;

• Documents proving overseas remittances or foreign-source income;

• Authorization agreements;

• Collection/payment-on-behalf records;

• Other relevant supporting documentation.

Maintaining complete documentation not only reduces tax risks during inspections but also improves transparency in personal financial management.

Conclusion

From 1 July 2026, the Personal Income Tax Law 2025 expands the scope of taxable income by introducing several new categories.

However, this does not mean that every amount transferred into a bank account becomes subject to Personal Income Tax.

The critical factor is identifying the true nature of each transaction, assessing it under applicable tax regulations, and maintaining sufficient supporting documentation to prove the source of funds whenever necessary.

For transactions involving substantial amounts or more complex circumstances, individuals are strongly advised to consult qualified tax professionals to ensure compliance with applicable regulations and avoid unnecessary tax risks during tax declaration and finalization procedures.