Who is a Non-Resident
You are a non-resident for Vietnamese tax purposes if you:
- Do not meet the 183-day rule – Present in Vietnam for fewer than 183 days in a calendar year or 12-month period
- Do not have regular residence – No permanent residence or rental of 183+ days
Quick Test
| Question | Yes | No |
|---|---|---|
| In Vietnam 183+ days this year? | → Resident | Continue |
| Have 183+ day rental or permanent residence? | → Resident | → Non-Resident |
The 20% Flat Rate
Non-residents pay a flat 20% tax on Vietnam-source income.
Key Characteristics
| Aspect | Treatment |
|---|---|
| Tax Rate | 20% flat (no brackets) |
| Taxable Income | Vietnam-source only |
| Deductions | None available |
| Worldwide Income | Not taxed in Vietnam |
Comparison: Resident vs Non-Resident
Example: 50,000,000 VND monthly salary
| Status | Calculation | Tax |
|---|---|---|
| Non-Resident | 50M × 20% | 10,000,000 |
| Resident | Progressive after 11M deduction | ~5,850,000 |
| Difference | 4,150,000/month |
Annual difference: ~50,000,000 VND
What Income is Taxable
Vietnam-Source Income (Taxable)
For non-residents, only Vietnam-source income is taxable:
| Income Type | Taxable? | Notes |
|---|---|---|
| Salary from Vietnam employer | ✅ Yes | Work performed in Vietnam |
| Vietnam rental income | ✅ Yes | Property located in Vietnam |
| Vietnam dividends | ✅ Yes | From Vietnamese companies |
| Vietnam interest | ✅ Yes | From Vietnamese banks |
| Vietnam business income | ✅ Yes | Business activities in Vietnam |
Foreign-Source Income (Not Taxable)
| Income Type | Taxable? | Notes |
|---|---|---|
| Overseas salary | ❌ No | Work performed outside Vietnam |
| Foreign dividends | ❌ No | From foreign companies |
| Foreign rental | ❌ No | Property outside Vietnam |
| Overseas investments | ❌ No | Generally not taxed |
No Deductions Available
What You Cannot Claim
Unlike tax residents, non-residents cannot claim:
- ❌ Personal deduction (11M VND/month)
- ❌ Dependant deductions
- ❌ Charitable contribution deductions
- ❌ Insurance premium deductions
- ❌ Housing allowance deductions
Impact on Tax
Example:
- Salary: 30,000,000 VND
- Non-resident tax: 30M × 20% = 6,000,000 VND
- Resident tax (after 11M deduction): ~2,200,000 VND
- Extra cost of non-resident status: 3,800,000 VND/month
Becoming a Resident
Mid-Year Status Change
If you become a resident mid-year:
- Recalculation required
- All income from year start recalculated as resident income
- Previous non-resident withholding credited
- Deductions become available
Potential Benefits
For many foreigners, becoming a resident reduces tax:
| Monthly Income | Non-Resident Tax | Resident Tax (after deduction) | Savings |
|---|---|---|---|
| 20,000,000 | 4,000,000 | 700,000 | 3,300,000 |
| 40,000,000 | 8,000,000 | 3,700,000 | 4,300,000 |
| 60,000,000 | 12,000,000 | 8,150,000 | 3,850,000 |
| 80,000,000 | 16,000,000 | 14,050,000 | 1,950,000 |
| 100,000,000 | 20,000,000 | 21,050,000 | -1,050,000 |
Note: For income above ~80M/month, non-resident status may actually be advantageous.
Transition Steps
When transitioning from non-resident to resident:
- Track your total days in Vietnam
- Notify employer when you expect to cross 183 days
- Update withholding method
- File year-end finalization
- Claim deductions for the full year
Planning Strategies
For Short-Term Visitors (< 183 days)
- Accept non-resident status
- Maximize foreign-source income
- Consider DTA benefits
- Track days carefully
For Long-Term Workers (183+ days)
- Plan for resident status
- Register dependants early
- Track all deductions
- File annual finalization
Need Help?
Our team can:
- Determine your residency status
- Calculate optimal tax position
- Assist with status transition
- File your returns
ZALO: +84703027485
This article is based on Circular 111/2013/TT-BTC. For official regulations, please refer to vbpl.vn.