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.
- Tax Resident
Foreigners meeting one of the following conditions will be deemed as tax residents of Vietnam.
(1)
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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;
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(2)
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having a permanent residence in Vietnam as recorded by a permanent/temporary residence card; or
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(3)
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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.
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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
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Annual Taxable Income
(million VND)
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Monthly Taxable Income
(million VND)
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Tax Rate
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Up to 60
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Up to 5
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5%
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Over 60 to 120
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Over 5 to 10
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10%
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Over 120 to -216
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Over 10 to 18
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15%
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Over 216 to 384
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Over 18 to 32
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20%
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Over 384 to 624
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Over 32 to 52
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25%
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Over 624 to 960
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Over 52 to 80
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30%
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Over 960
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Over 80
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35%
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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.
- 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.
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