Vietnam’s economic landscape is evolving rapidly, and with it comes a tax system that businesses, expatriates, and local employees must navigate effectively. Understanding Personal Income Tax (PIT) in Vietnam is crucial for ensuring compliance, optimizing financial planning, and making informed career or business decisions. Whether you are an expat considering work in Vietnam, a local entrepreneur, or a corporate employer managing payroll, this guide provides everything you need to know about Vietnam’s PIT system.
Who is Subject to Personal Income Tax in Vietnam?
Vietnam’s PIT framework applies differently to residents and non-residents, with taxation rules based on income source and residency status.
Tax Residency in Vietnam
An individual is considered a tax resident if they:
- Stay in Vietnam for 183 days or more within a calendar year or over a consecutive 12-month period.
- Have a permanent residence or long-term lease agreement of 183 days or more in Vietnam.
- Do not prove tax residency in another country.
Tax residents are liable for PIT on their worldwide income at progressive tax rates ranging from 5% to 35%.
Non-residents, on the other hand, are taxed at a flat 20% rate on income sourced in Vietnam, regardless of where the payment is received.
Vietnam’s Personal Income Tax Rates (2025 Update)
For Tax Residents (Employment Income)
Monthly Taxable Income (VND) | Tax Rate (%) |
0 – 5,000,000 | 5% |
5,000,001 – 10,000,000 | 10% |
10,000,001 – 18,000,000 | 15% |
18,000,001 – 32,000,000 | 20% |
32,000,001 – 52,000,000 | 25% |
52,000,001 – 80,000,000 | 30% |
Over 80,000,000 | 35% |
For Non-Residents (Employment Income)
- Flat tax rate: 20% on Vietnam-sourced income.
PIT Rates on Other Income
Type of Income | Tax Residents | Non-Residents |
Business income | 0.5% - 5% | 1% - 5% |
Interest (excluding bank deposits) | 5% | 5% |
Dividends | 5% | 5% |
Sale of shares | 0.1% (of sales proceeds) | 0.1% |
Capital transfer | 20% (of net gain) | 0.1% (of sales proceeds) |
Real estate sale | 2% (of sales proceeds) | 2% |
Income from royalties, franchising, or copyrights | 5% | 5% |
Inheritances, gifts, and prize winnings | 10% | 10% |
Exemptions & Deductions: How to Reduce Your PIT Liability
Vietnam’s tax laws offer several exemptions and deductions to ensure fairness and encourage economic activity.
Tax-Exempt Income
Certain income types are not subject to PIT, including:
- Proceeds from selling real estate between direct family members (spouse, parents, children).
- Bank interest and pensions from the social insurance fund.
- Foreign remittances from relatives working or studying abroad.
- Compensation from insurance policies and charitable donations.
- Overtime wages exceeding standard rates as defined by labor laws.
Deductions for Individuals and Dependents
Vietnam provides tax deductions to reduce taxable income, allowing individuals to optimize their tax payments:
- Personal deduction: VND 11 million per month (approx. USD 475).
- Dependent deduction: VND 4.4 million per dependent per month (USD 192).
Qualified dependents include:
- Children under 18 or disabled children unable to work.
- Parents or spouses with low income (under VND 1 million/month).
- Other dependents who meet specific eligibility criteria.
Social Insurance & PIT Contributions
Vietnam’s mandatory social insurance system impacts taxable income. Employers and employees contribute a percentage of salaries toward social security programs, including retirement, healthcare, and unemployment insurance.
Insurance Type | Employer Contribution | Employee Contribution | Maximum Salary Cap (VND) |
Social Insurance | 17.5% | 8% | 46,800,000 |
Health Insurance | 3% | 1.5% | 46,800,000 |
Unemployment Insurance | 1% | 1% | 99,200,000 |
Note: Foreign employees are exempt from unemployment insurance.
Tax Filing & Payment Deadlines
Vietnam’s tax year follows the calendar year. PIT must be finalized and paid according to the following deadlines:
Taxpayer Type | Filing Deadline |
Employers filing PIT on behalf of employees | March 31 |
Individuals filing their own tax | April 30 |
Foreigners leaving Vietnam permanently | Within 45 days of departure |
Taxes can be paid via bank transfer or directly to the State Treasury. Employers generally handle tax deductions at source, but individuals with multiple income sources must conduct their own finalization.
Double Taxation Agreements (DTAs) & Relief
Vietnam has double taxation agreements (DTAs) with numerous countries, preventing individuals from paying tax on the same income in two jurisdictions.
To claim DTA benefits, individuals must:
- Submit a tax relief application to the authorities at least 15 days before tax payment is due.
- Provide documentation proving tax residency in another country.
- Apply within three years of the tax payment deadline if filing retroactively.
Key Takeaways: Managing Personal Income Tax in Vietnam
- Know Your Residency Status: Residents pay progressive rates (5%-35%) on worldwide income, while non-residents pay 20% flat on Vietnam-sourced earnings.
- Claim Deductions & Exemptions: Take advantage of family deductions, tax-free benefits, and social insurance to reduce taxable income.
- File & Pay on Time: March 31 and April 30 are key deadlines—avoid penalties for late filing.
- Check Double Taxation Agreements: Expats should confirm DTA applicability to prevent overpayment.
Final Thoughts
Vietnam’s PIT system can be complex, but with proper planning and awareness, individuals and businesses can optimize tax obligations while staying compliant. As the country’s economy continues to grow, staying updated on tax regulations is crucial for financial success.
If you are an expatriate, business owner, or professional in Vietnam, understanding PIT laws can help you plan better and maximize tax efficiency.