Income Tax in Vietnam

Information on Vietnamese income taxes: general taxation on income, how it is calculated, when to pay tax, what exemptions there are and more...

Who Has to Pay Taxes?

Currently, more than 60 countries, including Canada and the United Kingdom, have double-taxation treaties with Vietnam. Citizens of the United States and other countries that do not have double-taxation treaties with Vietnam can be taxed on income originating from Vietnamese sources by both their home country and Vietnam if they stay in the country for at least 183 days within a 12-month period or one calendar year.

Vietnam taxes individuals on their worldwide income using a graduated tax scale. Resident foreigners must declare all of their income, regardless of whether the income originates from a Vietnamese source or from overseas. However, resident foreigners are entitled to a deduction against Vietnamese personal income tax on any overseas tax that has been paid, as long as proof of payment can be produced. The allowable claim cannot exceed the amount of tax imposed on that income under the Vietnamese tax laws.

Foreigners who spend less than 183 days in Vietnam in a consecutive 12-month period will be subject to a flat tax rate of 20 percent on any income that originates from a Vietnamese source. Any income originating from sources in other countries is not subject to taxation. Foreigners spending more than 183 days in Vietnam in a consecutive 12-month period will be subject to paying tax based on a progressive tariff that varies from 10 to 35 percent based on their worldwide income. The amount of the tariff may vary from province to province.

“Permanent” tax residents of Vietnam must also pay taxes. To be considered a permanent tax resident, a foreigner must either have an official Vietnamese registration card and a permanent or temporary residence card, or be unregistered but have spent 183 days or longer in a leased residence. Leased residences include hotels, workplaces and offices. If any of these conditions are met, then the individual is determined to be a tax resident of Vietnam.

There is no joint taxation in Vietnam. Married couples are assessed separately.

 

Disclaimer

Any statements concerning taxation are based upon our understanding of current taxation laws and practices in Vietnam, which are subject to change. While every effort has been made to offer information that is current, correct and clearly expressed the publisher is not responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. Readers are encouraged to seek professional advice concerning specific matters before making any decision.