Vietnam’s personal income tax rules for foreigners have changed in 2026, including new tax brackets and higher personal and dependent allowances. This guide explains what foreign employees and expatriates need to know about tax residency, PIT rates, deductions, exemptions and filing requirements.
What is Personal Income Tax in Vietnam?
Personal income tax is what an individual needs to pay to theVietnamese Department of Taxation based on the amount of income earned. Sources of income subject to PIT include salary and wages, capital investments, capital transfers, franchising income, inheritance and other taxable income.
Who Is Considered a Taxpayer in Vietnam?
Vietnamese tax residents are taxed on worldwide income, while non-residents are taxed only on Vietnam-sourced income. You are considered a tax resident, and therefore subject to Vietnamese PIT on worldwide income, if you meet any of following conditions:
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Stay in Vietnam 183 days or more in any 12-month period.
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Stay in Vietnam 183 days or more in a calendar year.
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Hold a Vietnam temporary or permanent residence card.
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Lease property in Vietnam for 183 days or more in a tax year.
If none of the above conditions apply, you are generally considered a non-resident for PIT purposes. Non-residents such as some short-term foreign workers, pay a flat 20% PIT on Vietnam-sourced employment income. Note that Vietnam has over 80 double-taxation treaties with other countries, which may reduce or eliminate double tax on cross-border income for treaty residents.
| Residents | Non-Residents |
| • ≥183 days in Vietnam in a 12-month period or calendar year. • Holding a permanent/temporary residence card. • Leasing accommodation ≥183 days. • Liability: Worldwide income is taxable in Vietnam. |
• Stay <183 days, no long-term residence. • Liability: Only Vietnam-sourced income is taxable. |
How to Calculate Personal Income Tax for Foreigners in Vietnam
For tax residents, the monthly taxable income (salary, bonuses, allowances, etc.) is taxed at progressive rates. Non-residents are generally taxed at a flat 20% rate.
Step 1 – Determine Your Applicable PIT Rate
For tax residents (2025 tax year): The progressive tax schedule has 7 brackets, with rates ranging from 5% to 35%.
For tax residents (starting from 1 January 2026): The schedule is streamlined to 5 brackets, maintaining the top rate of 35% but raising the threshold for the top bracket. The new brackets are:
| Taxable income per month | Rate |
|---|---|
| Up to 10 million VND | 5% |
| Over 10 – 30 million VND | 10% |
| Over 30 – 60 million VND | 20% |
| Over 60 – 100 million VND | 30% |
| Over 100 million VND | 35% |
For non‑residents: A flat 20% of gross Vietnam‑sourced income, with no further deductions.
Step 2 – Apply Available Deductions
Taxpayers can claim a personal allowance that reduces taxable income. This is VND 11 million per month in 2025 and increases to VND 15.5 million per month from 1 January 2026.
In addition, you may claim a deduction for each qualified dependent (4.4 million VND/month in 2025, rising to 6.2 million VND/month from 2026).
Mandatory contributions to Vietnam’s social insurance (SI) and health insurance (HI) are also fully deductible. For foreign employees, SI is 8% of salary (employer pays 17.5%) and HI is 1.5% (employer pays 3%). Unemployment insurance (UI) is not required for foreigners.
Important: SI and HI contributions are capped at 20 times the base salary. The current base salary is 2,340,000 VND, so contributions apply only to salary up to 46,800,000 VND.
Step 3 – Calculate Monthly PIT
For tax residents: subtract personal allowance, dependent allowances, and insurance contributions from your gross monthly salary, then apply the progressive tax rates to the remaining taxable income.
For non‑residents: simply calculate 20% of each month’s Vietnam‑sourced income.
What are other types of taxable income in Vietnam ?
Income other than salary and wages may also be subject to PIT at fixed rates. Key examples include:
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Business or professional income Income from activities such as consulting or contract work is taxed at 0.5%–5% of turnover, depending on the activity. Small household businesses earning under VND 100 million per year may be exempt.
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Non-bank interest and dividends: 5% of the income.
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Capital gains from asset transfers: Generally taxed at 20% of the gain, such as from the sale of a private company stake.
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Public share sales: 0.1% of the sales value.
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Real estate sales: 2% of the sales price (regardless of profit).
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Royalties, franchises, copyrights: 5% of the income.
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Prizes, gifts, inheritances: Generally taxed at 10%, although certain gifts and inheritances between close relatives may be exempt.
Tax residents report these incomes in their annual PIT return at the above rates. Non-residents are generally subject to the same rates on Vietnam-sourced non-salary income, such as dividends from a Vietnamese company.
What Income Is Tax-Free or Exempt in Vietnam?
Vietnamese law exempts many income items from PIT altogether. Key examples include:
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Family transfers: Inheritances and gifts between close relatives, such as spouses, parents, children and adopted children, may be exempt from PIT. Certain real estate transfers between direct family members may also qualify for exemption.
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Pensions: Payments from the Vietnam Social Insurance Fund (e.g. retirement pensions) are exempt from PIT.
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Personal remittances: Money received from relatives overseas may be exempt from PIT.
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Scholarships and aid: Approved scholarships, foreign government aid or NGO humanitarian contributions are tax-free.
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Night/overtime bonuses: Higher-than-normal pay for night shifts or overtime is not subject to PIT.
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Insurance or compensation: Payouts from personal insurance (life, health, etc.) and certain insurance compensations are not taxable.
Money received from relatives overseas may be exempt from PIT.
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Relocation allowance: A one-time payment to help an expat move to Vietnam is tax-exempt.
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Home-leave airfare: One round-trip ticket per year (to the employee’s home country) paid by the employer is non-taxable.
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Education support: Employer-paid tuition for an expat’s child (kindergarten through high school in Vietnam) is exempt.
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Lunch allowance: Employer-provided (catered) midday meals are exempt up to VND 730,000 per month.
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Uniform allowance: Cash or in-kind support for work uniforms (up to VND 5,000,000) is exempt.
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Training expenses: Fees paid by the employer for a job-related training course are exempt.
These exemptions (from various tax circulars) mean expat benefits like airfare, school fees, training, meals, etc. can often be provided tax-free if done properly.
Deduction for Charitable Donations
Donations to approved Vietnamese charities, humanitarian causes, or educational funds are deductible up to the level of your total taxable income. Keep official receipts and ensure the organization is on the government‑approved list. Unused donation deductions cannot be carried forward to a future tax year.
What Are the PIT Finalisation Deadlines in Vietnam?
Vietnam follows the calendar year for PIT, from 1 January to 31 December. Employers withhold PIT monthly and remit it by the 20th of the next month.
At year‑end, tax finalization must be completed:
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By 31 March: Employers consolidate employees’ annual PIT and submit finalization returns for employees who authorize them.
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By 30 April (or the next working day): Individuals with multiple jobs, or who file on their own, must finalize directly. For 2025 income, the deadline was 4 May 2026.
Missing deadlines leads to fines up to 25 million VND and daily interest on unpaid tax.
Special PIT Rules for Expatriates in Vietnam
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Leaving Vietnam: Foreign workers ending their contract must settle their PIT within 45 days after their exit date. You can file yourself or authorize your employer.
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Non‑resident foreigners: If you did not meet the 183‑day residency rule and have no continued income source, you are not required to file an annual PIT finalization (unless you are seeking a refund).
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Double‑tax relief: Vietnamese tax residents receive a credit for foreign taxes paid on the same income, up to the amount of Vietnamese PIT otherwise payable on that income. Always check the relevant DTA for specific rules.
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Tax codes & e‑filing: Foreign individuals receive a tax code when they register. As Vietnam moves towards using Personal Identification Numbers, foreigners who are not issued a PIN can continue using their existing tax code. The eTax Mobile app also supports online PIT filing, pre-populated forms and tax status checks.
Conclusion
Your PIT obligations in Vietnam depend on where you are tax resident, where your income comes from and what type of income you earn. If you are a tax resident, you are generally taxed on worldwide income at progressive rates, while non-residents are taxed on Vietnam-sourced employment income at a flat rate. Knowing which deductions and exemptions apply, and when you need to file, can make a real difference to how much tax you pay and how smoothly you stay compliant.
If you are unsure about your tax status, eligible deductions or filing requirements, we can help. At Ascentium, we support you with PIT calculations, tax finalisation, double-tax relief and ongoing compliance, helping you manage your obligations in Vietnam with fewer complications.
