The personal income tax in Vietnam for expats comes with specific rates and procedures that can be complex. Your tax obligations depend on your residency status, with both residents and non-residents taxed based on the duration of their stay. This article simplifies the rules and highlights key tax responsibilities, helping foreigners in Vietnam understand their obligations.
What is Personal Income Tax (PIT)?
Personal income tax (PIT) in Vietnam is a widely applied tax, governed by various legal documents. However, these documents often lack a detailed definition of personal income tax.
According to the 2019 Law on Tax Administration, PIT is an amount that must be paid to the state budget by individuals, organizations, households, or business households, as stipulated by tax laws.
Additionally, personal income tax applies to business households and individuals generating over VND 100 million in annual turnover from production or business activities.
Subjects of Personal Income Tax
According to Article 2 of the Law on Personal Income Tax (2007), personal income taxpayers include:
- Residents: Individuals who meet one of the following conditions:
- Present in Vietnam for 183 days or more in a calendar year, or 12 consecutive months starting from their first day in Vietnam.
- Have a habitual residence in Vietnam, either a registered permanent address or a rented residence under a term contract.
- Non-residents: Individuals who do not meet any of the above conditions and earn taxable income within Vietnam’s territory.
Personal Income Tax Rates in Vietnam
Personal Income Tax Deductions
According to Resolution 954/2020/UBTVQH14 dated June 2, 2020, regarding family circumstance-based deductions, the following changes apply:
- Individual Deduction: Increased from VND 9 million per month to VND 11 million per month.
- Family Deduction: Increased from VND 3.6 million per month to VND 4.4 million per month.
These increases will reduce taxable income for Personal Income Tax (PIT) purposes. The new deductions apply to monthly PIT treatments starting from July 1, 2020, and for PIT finalization in 2020.
Tax-Free Incomes
As per Article 4 of the Law on Personal Income Tax, there are various sources of tax-free income in Vietnam, including:
- Income from real estate transfers between spouses, blood relatives, and adopted families is tax-exempt. Income earned from inherited real estate is also tax-free.
- Remittances sent by foreign relatives working or studying abroad are considered tax-free income.
- Pensions paid by the social insurance fund are exempt from tax.
Income Tax Exemptions for Expats in Vietnam
Vietnam offers several income tax exemptions to make it easier for taxpayers, especially expats and foreign workers, to navigate their financial obligations. These exemptions cover various income sources, including foreign remittances and specific employment-related benefits.
- Exemptions on Foreign Remittances: Income from foreign remittances, such as educational support or retirement pensions sent from family members abroad, is exempt from tax.
- Overtime Tax Exemption: Income earned from night shifts or overtime work is exempt from tax, provided the overtime pay exceeds the regular shift salary.
- Tax Benefits for Expats: To attract foreign workers and investors, the government has implemented several tax benefits:
- Round-trip airfare paid by employers for expatriate employees is exempt from tax.
- Relocation expenses for expatriates moving to Vietnam for work are tax-free.
- School fees for the children of expatriate employees (excluding tertiary education) are exempt from tax.
- Meal allowances provided by the employer during work hours (with a cap on cash allowances).
- Training fees paid by employers for employees’ training sessions are tax-exempt.
- Uniforms provided by the employer (with a cap if paid in cash).
- Wedding and funeral allowances are also exempt from income tax.
Deadline for PIT Finalizations in Vietnam
The deadline for paying Personal Income Tax (PIT) is generally determined after the conclusion of the tax year, which typically aligns with the calendar year. According to Article 44, Clause 2 of the 2019 Law on Tax Administration, the following deadlines apply for annual tax filings:
- Annual tax settlement documents are due by the last day of the third month after the calendar or fiscal year ends.
- Annual tax declaration documents should be submitted by the last day of the first month of the calendar or fiscal year.
- Direct individual tax settlement documents are due by the last day of the fourth month following the end of the calendar year.
- Estimated tax declaration documents for business households or individuals using the estimated method must be submitted by December 15th of the preceding year or within 10 days of starting business operations for new businesses.
For PIT tax settlements in 2025, the deadlines are as follows:
- The latest deadline is March 31, 2026, for organizations and individuals with income from salaries and wages.
- The latest deadline is April 30, 2026, for individuals directly settling taxes on income from salaries and wages with the tax authorities.
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The Nest Asia is a one-stop resource offering comprehensive information, practical relocation advice, cultural insights, valuable connections, and trusted services to help expatriates living in Vietnam navigate the transition, overcome challenges, and build a fulfilling life abroad. Starting your journey in a new country can often feel overwhelming. The Nest Asia is your trusted partner – we’re here to simplify that process and ultimately make Vietnam feel like home for you and your loved ones.
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Disclaimer: The Nest Asia is not an authorized provider of official government or non-government services. The information provided is intended for general guidance only. While we strive to offer accurate and timely information, we make no representations or warranties regarding its completeness or accuracy.
