Details of personal income tax of foreigners in Vietnam

Individuals in Vietnam are subject to Personal Income Tax (PIT) in Vietnam, based on their tax residency status. But how is tax calculated and is all income calculated at a flat tax rate?

   In this content, GTax will provide you with detailed information related to how to calculate personal income tax rates for foreigners in Vietnam for you to compare:

Who must pay Personal Income Tax (PIT) in Vietnam?

1. Vietnamese resident

A resident is an individual who meets one of the following criteria:

  • Reside in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the date of arrival.
  • Have permanent residence in Vietnam (including the place of household registration recorded on the permanent/temporary residence card or rent a house in Vietnam with a rental term of 183 days or more in the tax year for foreigners) and cannot prove tax residency in another country.

2. Non-Vietnamese resident

You are considered a non-resident taxpayer when you have an active tangible income service in Vietnam, but you do not meet the definition of being a resident above. 

How is Vietnam’s Personal Income Tax (PIT) rate calculated?

   Vietnam personal income tax rates are calculated based on your type of residence. Personal income tax is the portion of your income through business, wages, salaries, inheritance, interest or dividends that will be given to the government.

The following is the Personal Income Tax rate table in Vietnam:

  • Applies to resident taxpayers:
Monthly Taxable Income (VND) Annual Taxable Income (VND) Tax Resident PIT Rates

0 – 5,000,000

Up to 60,0000,000

5%

5,000,001 – 10,000,000

60,000,001 – 120,000,000

10%

10,000,001 – 18,000,000

120,000,001 – 216,000,000

15%

18,000,001 – 32,000,000

216,000,001-384,000,000

20%

32,000,001 – 52,000,000

384,000,001-624,000,000

25%

52,000,001 – 80,000,000

624,000,001-960,000,000

30%

 Over 80,000,000

Over  960,000,000

35%
  • Applies to Non-resident taxpayers: 
Type of Taxable income Tax rate (%)

Employment income

20%

Income from inheritances/gifts/winning prizes (excluding income from casino winning prizes)

10%

Income from royalties/franchising/copy rights

5%

Interest (but not bank interest)/dividends

5%

Business income

1 to 5%

(based on the type of business income)

Sale of real estate

2 %

(of sales proceeds)

Sale of shares/capital assignment

0.1%

(of sales proceeds)
  • Tax residents: Business income
Type of Taxable income Tax rate (%)

Lease of assets

5%

Services, construction without provision of raw materials

2%

Production, transport, services attached to goods, construction including provision of raw materials

1,5%

Distribution and supply of goods

0,5%

Other business operations

1%

  Note: Individuals with business income of 100 million VND/calendar year or less are not subject to personal income tax on business income.

  • Tax residents: Non-employment income
Type of Taxable income Tax rate (%)

Capital assignment

20%

(on net gain)

Income from inheritance/gifts/prize winnings (excluding income from casino prizes)

10%

Income from franchising/royalties

5%

Interest (but not bank interest)/dividends

5%

Business income

0.5 to 5 %

(based on the type of business income)

Sale of real estate

2 %

(of sales proceeds)

Sale of shares

0.1 

(of sales proceeds)

 Note: Currently, Vietnam’s Tax Authority is not interested in the personal income tax policy of the country hosting foreign investors. They deduct a portion of the rate stated in their laws and investors deal with the double taxation processes themselves.

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How to pay income tax for foreigners in Vietnam

   Individuals and organizations subject to personal income tax must register with tax authorities to obtain a tax identification number .   

   You are to be held accountable to declare your income tax at the end of a tax year before the deadline assigned for each tax payment. If you are an individual, you can proceed to sort out your taxes yourself. In cases of Foreign-Investment Enterprises , there will be a need to conduct a personal income tax calculation for each of your employees by the enterprise.

  After this, you will gather the combined tax in PIT Finalization files, which will contain an annual income summary and the personal income tax letter. Then, they can pay either in cash or via bank transfer to the State Treasury.

How can we help you?

   Many foreigners face the complexity and inconsistency of tax policy in Vietnam. Especially related to personal income tax policy.

   This may be due to not filing on time, preparing personal income tax finalization documents in an amateurish manner, or misunderstanding tax rate policy.

   GTax understands the basic needs of each business as well as the complexities related to tax policy. With a team of skilled experts and extensive industry experience in each department, GTax will help you solve any obstacles you may encounter, thereby providing the best service experience.

Compiled by GTax

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