Non-Taxable Benefits and Income in Vietnam

In addition to the taxable income we already know, there are also types of income that are excluded from tax (non-taxable allowances). These allowances require supporting documentation or company policy depending on the type of allowance.

Through this article, GTax will provide you with details of non-taxable income as follows:

Non-Taxable Benefits & Income

Some non-taxable allowances include:

  • Round-trip airfare once a year for foreign employees return home or Vietnamese people working abroad return home;
  • Tuition fees (excluding university level) for foreigners Vietnamese workers or people working abroad;
  • Mid-shift meals (ceiling if provided in cash and the non-taxable ceiling in case of direct payment to employee is 730,000 VND/month);
    One-time resettlement costs for foreigners coming to Vietnam jobs and Vietnamese people working abroad;
  • Wedding and funeral allowances or allowances;
  • Uniforms (limited if provided in cash and non-tax limit in case paid directly to employees is 5,000,000 VND/year);
  • Benefits provided in kind on a collective basis (e.g. membership) where an individual is not identified as a beneficiary;

 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.

Additional non-taxable income includes:

  • Interest earned from bank deposits and credit Institutions;
    Payments from life and non-life insurance contracts;
  • Pension from Social Insurance Fund;
  • Transfer of property between immediate family members;
  • Inheritance and gifts from immediate family members;
  • Monthly pension from voluntary insurance plan;
  • Income from Casino winnings.
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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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