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Overview of Personal Income Tax for Foreigners Working in Vietnam

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Overview of Personal Income Tax for Foreigners Working in Vietnam

Foreigners working in Vietnam are subject to personal income tax. Foreign taxpayers can be divided into tax residents and non-tax residents based on their length of stay in Vietnam and other factors.

  1. Tax Resident

    Foreigners meeting one of the following conditions will be deemed as tax residents of Vietnam.

    (1)
    residing in Vietnam for an aggregate of 183 days or more within a calendar year or a period of 12 consecutive months from the first date of arrival;
    (2)
    having a permanent residence in Vietnam as recorded by a permanent/temporary residence card; or
    (3)
    having a rented house in Vietnam with a lease term of 183 days or more in a tax year and unable to prove tax residence in another country.

    Tax residents are subject to Vietnamese personal income tax on their worldwide taxable income, irrespective of where the income is paid. Employment income is taxed on a progressive tax rates basis ranging from 5% to 35%. Other income is taxed at a variety of different rates.

    Progressive Tax Rates for Employment Income of Tax Residents of Vietnam

    Annual Taxable Income

    (million VND)

    Monthly Taxable Income

    (million VND)

    Tax Rate

    Up to 60

    Up to 5

    5%

    Over 60 to 120

    Over 5 to 10

    10%

    Over 120 to -216

    Over 10 to 18

    15%

    Over 216 to 384

    Over 18 to 32

    20%

    Over 384 to 624

    Over 32 to 52

    25%

    Over 624 to 960

    Over 52 to 80

    30%

    Over 960

    Over 80

    35%


    In respect of tax residents of Vietnam who have overseas income, personal income tax paid in a foreign country on the foreign income is creditable.

  2. Non-tax Resident

    Foreigners who do not meet any of the above conditions for tax residents will be deemed as non-tax residents of Vietnam. Non-tax residents only have to pay personal income tax on their Vietnam-sourced income. A flat tax rate of 20% is applicable to Vietnam-sourced employment income.

    Vietnam has double taxation avoidance treaties signed with a number of countries or jurisdictions. In this regard, if a non-tax resident has already paid tax in one country or jurisdiction which has double taxation avoidance treaty with Vietnam, they may not have to pay tax in Vietnam or vice versa.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:

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