Taxable Income

Information about taxable income, tax rates and tax deductions and exemptions in Vietnam...

Taxable income includes income derived from the following sources:

  • Employment
  • Business
  • Capital investments
  • Capital transfers
  • Real property transfers
  • Winnings or prizes
  • Royalties
  • Franchises
  • Inheritance and gifts not between direct family members
  • Other sources, not specified above

Tax Rates

Income that is earned by resident foreigners in Vietnam is taxed at progressive rates, ranging from 5 to 35 percent.

Annual Taxable Income (VND) Tax Rate
Up to 60 million 5 percent
60 – 120 million 10 percent
120 – 216 million 15 percent
216 – 384 million 20 percent
384 – 624 million 25 percent
624 – 960 million 30 percent
Over 960 million 35 percent

Deductions and Exemptions

Certain deductions are allowed for family dependants. The deduction for foreign taxpayers is VND 9 million per month and an additional VND 3.6 million per month can be deducted for each dependent. The foreigner must register and obtain a tax code at the district tax office where they live in order for each of their dependants to qualify for this deduction.

An employee may claim a deduction of up to VND 1 million per month if they contribute to a voluntary pension scheme.

Foreigners working in Vietnam and Vietnamese people working overseas may deduct the following expenses from their taxes:

  • Overseas school fees for children attending pre-school to secondary school level education
  • One round trip airfare back home for the employee
  • A one-time only relocation payment

Note: Other deductions and exemptions may also be available to resident expatriates in Vietnam.

Property Tax

There are no property taxes in Vietnam. However, rental of land use rights by foreign investors is a form of property tax. The amount owed is based on the value of the specific land area per square metre of a property and is assessed at a progressive tax rate that ranges from 0.03 percent to 0.15 percent. This tax applies to any foreign-owned house, condominium or apartment.

Non-taxable Income

Certain forms of income are not subject to taxes. These include the following:

  • Interest earned in a Vietnamese bank or from a life insurance policy
  • Compensation paid under a life insurance  policy or other insurance policy
  • Retirement pensions
  • Inheritances and gifts between direct family members
  • Income from the transfer of property between direct family members

Foreign tax residents of Vietnam who have income from overseas and have paid personal income tax on that income do not have to pay Vietnamese income tax for that same income.

Capital Gains Taxes

Capital gains are computed in compliance with the Vietnamese tax code by deducting the cost and incidental expenses of an investment from the gross sales proceeds. This is the “cost basis” of the investment. The resulting capital gain is subject to a flat tax of 25 percent. If the cost basis of the investment cannot be determined by supporting documentation, then the taxable gains will be taxed at a special rate of two percent of the gross sales proceeds.

Inheritance Taxes

Inheritances of greater than VND 10 million that are not from direct family members are subject to a 10 percent inheritance tax.

Filing Taxes

To file taxes in Vietnam a tax code is required, which can be obtained at the district tax office. Employees submit the tax registration file, or income tax return, to their employer, who submits this to the local tax office. People who have other forms of taxable income must submit their tax registration file to the district tax office where they reside. Personal income taxes are expected to be filed quarterly.

Note: The tax year in Vietnam is the same as the calendar year, although the first taxable year is based on 12 consecutive months after arrival in Vietnam.

Further Information

 

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.