Tax Residency Overview
Vietnam's PIT system treats you differently based on whether you are a tax resident or non-resident. This single determination affects your tax rates, available deductions, and filing obligations.
You are a tax resident if:
- You are present in Vietnam for 183 days or more within a calendar year (Jan 1–Dec 31), OR within any 12 consecutive months from your first arrival date; OR
- You maintain a regular residence — either a registered permanent residence or a rental lease of 183+ days during the tax year.
Non-residents pay a flat 20% on Vietnam-sourced income only, with no deductions available.
Practical tip: Day counts include both arrival and departure days. Keep a travel log and your passport stamped entries — tax authorities use these during finalization.
2025 Tax Brackets (7-Bracket Progressive System)
For income earned until December 31, 2025, the seven-bracket progressive system applies to tax residents:
| Monthly Taxable Income (VND) | Annual Taxable Income (VND) | Rate |
|---|---|---|
| Up to 5,000,000 | Up to 60,000,000 | 5% |
| 5,000,001 – 10,000,000 | 60M – 120M | 10% |
| 10,000,001 – 18,000,000 | 120M – 216M | 15% |
| 18,000,001 – 32,000,000 | 216M – 384M | 20% |
| 32,000,001 – 52,000,000 | 384M – 624M | 25% |
| 52,000,001 – 80,000,000 | 624M – 960M | 30% |
| Over 80,000,000 | Over 960,000,000 | 35% |
Taxable income = Assessable income − Insurance contributions − Personal deduction − Dependant deductions
2026 Tax Brackets (New 5-Bracket System)
Vietnam's National Assembly passed a landmark PIT reform in December 2025. The new 5-bracket system applies to salary and wage income from January 1, 2026:
| Monthly Taxable Income (VND) | Annual Taxable Income (VND) | Rate |
|---|---|---|
| Up to 10,000,000 | Up to 120,000,000 | 5% |
| 10,000,001 – 30,000,000 | 120M – 360M | 10% |
| 30,000,001 – 60,000,000 | 360M – 720M | 20% |
| 60,000,001 – 100,000,000 | 720M – 1,200M | 30% |
| Over 100,000,000 | Over 1,200,000,000 | 35% |
Key changes vs 2025:
- Bracket 2 rate reduced from 15% → 10%
- Bracket 3 rate reduced from 25% → 20%
- Top bracket threshold raised from VND 80M → VND 100M/month
- Middle-income earners benefit the most from these changes
Impact example: A resident earning VND 50M/month (no dependants) sees monthly PIT drop from approximately VND 6.85M → VND 4.75M — a saving of over VND 2.1M per month.
Personal & Dependant Deductions
Deductions reduce your assessable income before tax brackets are applied. These are available only to tax residents.
| Deduction | 2025 | 2026 (from Jan 1) |
|---|---|---|
| Personal (taxpayer) | 11,000,000 VND/month | 15,500,000 VND/month |
| Each qualifying dependant | 4,400,000 VND/month | 6,200,000 VND/month |
Tax-free income thresholds (2026):
- Single, no dependants: VND 17,000,000/month (15.5M personal + no tax on first 1.5M)
- With 1 dependant: VND ~23,200,000/month
- With 2 dependants: VND ~29,400,000/month
Who qualifies as a dependant?
- Children under 18 years old
- Children 18+ who are enrolled in university with income below VND 1,000,000/month
- Spouses, parents, or other relatives who are unable to work and have income below VND 1,000,000/month
Dependants must be registered with the tax authority. Required documents include birth certificates, school enrollment letters (for children), and medical certificates (for disabled dependants).
Also deductible from assessable income:
- Your own compulsory social insurance contributions (SI, HI)
- Approved charitable donations (with receipts from registered organisations)
Non-Taxable Income & Benefits
Vietnam's PIT Law exempts many common expat benefits from tax — but documentation is essential:
| Benefit | Exemption Condition |
|---|---|
| Round-trip airfare to home country | One trip per year, employer paid |
| Relocation allowance | One-time, moving to/from Vietnam |
| School fees (K–12 only) | Paid directly by employer, not to employee |
| Housing allowance | Taxable, but capped at 15% of other assessable income |
| Meal allowance | Exempt up to VND 730,000/month; above this is taxable |
| Uniform allowance (cash) | Exempt up to VND 5,000,000/year |
| Overtime/nightshift premium | Fully exempt |
| Employer statutory insurance contributions | Not a taxable benefit to employee |
| Business travel and per diem | Exempt if within approved limits |
2026 addition: Foreign experts working on ODA-funded projects are fully PIT-exempt. Qualified digital technology, AI, and semiconductor professionals receive a 5-year PIT exemption on wages.
Non-Resident Rules
If you spend fewer than 183 days in Vietnam and do not maintain a regular residence:
- Employment income: flat 20% on all Vietnam-sourced income
- No deductions available (personal or dependant)
- No annual finalization required
- Tax withheld monthly by employer is final
Other non-resident rates:
- Dividends, interest, royalties: 5%
- Real estate sales: 2% of transaction value
- Capital gains on shares: 0.1% of gross proceeds
- Prizes and inheritances: 10%
Double Taxation Agreements
Vietnam has signed DTAs with over 80 countries, including the UK, France, Germany, Japan, South Korea, Australia, Singapore, and most ASEAN nations. DTAs can reduce or eliminate double taxation on the same income.
Important: The USA has no DTA with Vietnam. US expats must rely on the Foreign Tax Credit (Form 1116) or Foreign Earned Income Exclusion (Form 2555) to avoid double taxation, and must still file US tax returns regardless of income level.
To claim DTA benefits:
- Obtain a Certificate of Tax Residency from your home country's tax authority
- Submit to your Vietnamese employer and the local tax authority at least 15 days before the tax payment deadline
- Late claims can be filed retroactively up to 3 years from the original due date
DTA relief is never automatic — it requires proper documentation and timely notification.
Real-World Examples
Example 1: Foreign Tax Resident, VND 60,000,000 Gross, 1 Dependant (2026)
| Step | Amount (VND) |
|---|---|
| Gross salary | 60,000,000 |
| Employee SI (8% × 46,800,000 cap) | −3,744,000 |
| Employee HI (1.5% × 46,800,000 cap) | −702,000 |
| Personal deduction | −15,500,000 |
| Dependant deduction (1 child) | −6,200,000 |
| Taxable income | 33,854,000 |
| PIT: 5% × 10M | 500,000 |
| PIT: 10% × 20M | 2,000,000 |
| PIT: 20% × 3,854,000 | 770,800 |
| Total PIT | 3,270,800 |
| Net salary | 52,283,200 |
Example 2: Non-Resident, VND 60,000,000 Gross
| Step | Amount (VND) |
|---|---|
| Gross salary | 60,000,000 |
| PIT (20% flat) | −12,000,000 |
| Net salary | 48,000,000 |
Non-residents pay significantly more tax at higher income levels — another reason to track your days carefully.
Sources: PIT Law (Law No. 2025/QH15), Circular 111/2013/TT-BTC, PwC Vietnam Individual Tax Summaries, Acclime Vietnam, Vietnam Briefing. For official regulations: [vbpl.vn](https://vbpl.vn) and [gdt.gov.vn](https://gdt.gov.vn).