Personal Income Tax: tax years & finalisations

   Individuals in Vietnam are subject to Personal Income Tax (PIT) based on their tax residence status. Employment income is generally subject to various progressive tax rates, while other income is subject to flat tax rates.

   Individuals must adhere to one calendar year as their standard tax year. The employer must deduct Personal Income Tax from the employee’s salary and pay it monthly or quarterly.

   Other taxes are often required to be deducted at source (i.e. dividends) or self-declared on an event basis.

   Individuals will need to determine whether they need to carry out annual tax finalization to ensure that their tax finalization issues have been resolved before the PIT finalization deadline when necessary.

   If an individual only has income from a single employer during the year or other income in limited circumstances, they can authorize their employer to settle on their behalf in advance the last day of the 3rd month from the end of the tax year (March 31).

   In case an individual needs a tax refund, tax deduction for the following years or has tax obligations to the tax authority, they must complete tax finalization no later than the last day of the 4th month from the end of the tax year(30 April).

   Individuals who have simple tax problems and those who do not owe any taxes to the authorities, no settlement is required. However, this may affect future years if tax matters become complicated, so all taxpayers are encouraged to finalize their taxes annually.

   Individuals who have simple tax problems and those who do not owe any taxes to the authorities, no settlement is required. However, this may affect future years if tax matters become complicated, so all taxpayers are encouraged to finalize their taxes annually.

Note:

  • A personal deduction of VND 11,000,000 is provided each month, reducing monthly taxable income accordingly.
  • Additional dependent deduction is allowed, at VND 4,400,000 per dependent per month, if they meet the requirements and are registered, further reducing monthly taxable income.

Vietnam Personal Income Tax rates

   Vietnam personal income tax rates are calculated based on your type of residence. Residents are taxed according to the amount incurred in most areas; they can gain personal income. In contrast, Non-Resident income tax is based on a flat percentage only but excludes certain types of income generation.

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

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

0 – 5,000,000

Up to 208

5%

5,000,001 – 10,000,000

Over 208 to 415

10%

10,000,001 – 18,000,000

Over 415 to 747

15%

18,000,001 – 32,000,000

Over 747 to 1,328

20%

32,000,001 – 52,000,000

Over 1,328 to 2,158

25%

52,000,001 – 80,000,000

Over 2,158 to 3,318

30%

 Over 80,000,000

Over  3,318

35%
  • Applies to Non-resident taxpayers:  are subject to PIT at a flat rate of 20% on their Vietnam-sourced income.

 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.

Read more

* Details of Personal Income Tax of foreigners in Vietnam

 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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