Vietnam Tax Calculator for Foreigners

Vietnam’s tax system treats people differently based on whether they’re considered tax residents or non-tax residents. Vietnam’s tax residency rules are outlined in the Law on Personal Income Tax (PIT), specifically in Article 4, which defines the criteria for determining tax residency.

Tax Residents: You’re a tax resident if you stay in Vietnam for 183 days or more in a calendar year or within 12 consecutive months from the first day of arrival, or if you have a permanent residence in the country (e.g., you have a temporary residence card in Vietnam or if you/your company have leased a house or houses in Vietnam with an aggregate term of 183 days or more in an assessable tax period). Vietnam taxes your worldwide income, meaning everything you earn inside and outside the country.

Non-Tax Residents: If you stay in Vietnam for less than 183 days and don’t have a permanent residence, you’re a non-resident. In this case, you only pay tax on the money you earn in Vietnam.

Vietnam employs a progressive tax system (in respect of wages and remuneration) for tax residents and a flat tax rate for non-residents. Understanding these rates is essential for accurate tax calculation.

Tax Rates for Tax Residents

Tax residents are subject to the following progressive tax rates based on their monthly assessable income (in respect of wages and remunerations):

Monthly Assessable Income (VND)	Tax Rate
0 – 5,000,000	5%
Over 5,000,000 to 10,000,000	10%
Over 10,000,000 to 18,000,000	15%
Over 18,000,000 to 32,000,000	20%
Over 32,000,000 to 52,000,000	25%
Over 52,000,000 to 80,000,000	30%
Over 80,000,000	35%

Example: If your monthly assessable income is 30,000,000 VND, your PIT is calculated as follows:

• 1st tax bracket: 5,000,000 VND at 5% = 250,000 VND
• 2nd tax bracket: (10,000,000 VND – 5,000,000 VND) at 10% = 500,000 VND
• 3rd tax bracket: (18,000,000 VND – 10,000,000 VND) at 15% = 1,200,000 VND
• 4th tax bracket: (30,000,000 VND – 18,000,000 VND) at 20% = 2,400,000 VND

Total PIT = 4,350,000 VND

Tax Rate for Non-Tax Residents

Non-tax residents are subject to a flat PIT rate of 20% on income earned within Vietnam, regardless of the amount and place of payment. This simplifies tax calculations but does not allow for deductions or allowances.

If you have other business and irregular incomes in Vietnam, these incomes are taxed at flat rates, ranging from 1% to 10%.

1. Personal Deduction

The personal deduction is a fixed amount of 11,000,000 VND per month that is automatically subtracted from your gross income. It is intended to cover basic living expenses for individuals earning taxable income in Vietnam.

Who Qualifies? Any individual classified as a tax resident is eligible. This applies whether you’re a local or a foreigner who meets the residency criteria (staying in Vietnam for 183 days or more in a year or having a permanent residence).

How Does It Work? Subtract 11,000,000 VND from your gross income for each month. If you’re calculating for a year, multiply it by 12 (11,000,000 x 12 = 132,000,000 VND annually).

2. Dependent Deduction

The dependent deduction is an additional allowance of 4,400,000 VND per month for each qualified dependent you support.

Who Qualifies as a Dependent? A dependent can include:

• Spouse (if disabled or earning below a specified threshold)
• Children (under 18, or full-time students under a certain age)
• Elderly parents or other relatives in need of financial support

How Does It Work? For each dependent, 4,400,000 VND is deducted from your monthly taxable income.

3. Additional Deductions and Non-Taxable Incomes

Other deductions can include contributions to mandatory social insurance schemes, charitable donations, etc.

• Insurance Premiums: Contributions are deductible, up to the limit based on the basis salary.
• Charitable Donations: Donations made to government-approved charitable organizations are deductible.
• Non-Taxable Incomes: Certain allowances and income, such as meal allowances or travel expenses, are not taxed.

Follow these steps to determine your PIT liability in Vietnam:

1. Determine Your Tax Residency Status: Tax Resident or Non-Tax Resident.
2. Calculate Taxable Income: Include both monetary and non-monetary benefits in your taxable income.
3. Apply Deductions and Allowances (For Tax Residents Only): Subtract personal and dependent deductions, insurance premiums, etc.
4. Determine Assessable Income: Subtract total deductions from taxable income.
5. Apply the Relevant Tax Rates: Use progressive rates for tax residents, or 20% for non-residents.
6. Calculate PIT Owed: Sum the tax amounts or simply multiply by 20% for non-residents.

Tax filing for foreign employees is generally handled by employers. If you’re working for a Vietnam-based entity, they are required to withhold, file tax returns, and pay taxes on your behalf.

How to File: Use the General Department of Taxation (GDT) online portal or file directly with a local tax office.

Documents Needed: Tax Identification Number (TIN), income statements, and proof of deductions.

Double Taxation Agreements (DTAs)

Vietnam has established DTAs with many countries to prevent double taxation of income.

Social and Health Insurance Contributions

Foreign employees must contribute to Vietnam’s compulsory social and health insurance systems.

Penalties for Non-Compliance

Non-compliance with tax obligations can lead to penalties, including fines and legal action, as outlined in Decree No. 125/2020/ND-CP.