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Vietnam’s income tax (PIT) system is evolving alongside its growing economy, creating the need for residents and non-residents to understand their obligations better. This 2025 guide offers a concise overview for individuals, HR professionals, and employers to stay compliant and plan effectively.
Tax Residency in Vietnam
Understanding your tax residency status is crucial in determining whether you are taxed on worldwide or Vietnamese-sourced income.
You are considered a Vietnam tax resident if you meet any of the following:
- Spend 183 days or more in Vietnam in a calendar year or within 12 consecutive months.
- Hold a temporary or permanent residence card.
- Lease housing for 183 days or more in Vietnam during the assessment period.
If none of these conditions apply and you can prove tax residency in another country, you may qualify as a non-resident, subject only to tax on Vietnamese-sourced income.
Taxable Income Overview
- Tax Residents: Taxed on worldwide income, regardless of where it’s paid or received.
- Non-Tax Residents: Taxed only on Vietnamese-sourced income.
Even if income is paid offshore, if the work is performed in Vietnam, it is typically taxable unless exempted under a Double Tax Agreement (DTA).
Personal Income Tax Rates (2025)
| Monthly Taxable Income (VND) | Tax Resident Rate | Non-Resident Rate |
|---|---|---|
| 0 – 5,000,000 | 5% | 20% |
| 5,000,001 – 10,000,000 | 10% | |
| 10,000,001 – 18,000,000 | 15% | |
| 18,000,001 – 32,000,000 | 20% | |
| 32,000,001 – 52,000,000 | 25% | |
| 52,000,001 – 80,000,000 | 30% | |
| 80,000,001 and above | 35% |
Standard Deductions:
- VND 11 million/month personal deduction
- VND 4.4 million/month per dependent (registered)
Tax on Other Income
| Income Type | Resident | Non-Resident |
|---|---|---|
| Business income | 0.5–5% | 1–5% |
| Interest (non-bank) | 5% | 5% |
| Dividends | 5% | 5% |
| Public share sales | 0.1% | 0.1% |
| Capital gains (private share transfers) | 20% | 0.1% |
| Real estate sales | 2% | 2% |
| Royalties, copyright, franchise income | 5% | 5% |
| Prizes, gifts, inheritances (non-family) | 10% | 10% |
Social, Health, and Unemployment Insurance Contributions
| Insurance Type | Employee Share | Employer Share | Monthly Cap |
|---|---|---|---|
| Social Insurance | 8% | 17.5% | VND 36,000,000 |
| Health Insurance | 1.5% | 3% | VND 36,000,000 |
| Unemployment Insurance | 1% | 1% | VND 93,600,000 (Zone 1) |
- Foreign employees are exempt from unemployment insurance.
- Employee contributions are PIT deductible.
Tax Finalisation and Deadlines
- Standard tax year: Calendar year
- Finalisation deadlines:
- Employer on behalf of employee: March 31, 2026
- Self-declared by individual: April 30, 2026
When Finalisation is Required:
- Multiple income sources
- Tax refund claim
- Tax shortfall detected
Employers must withhold PIT monthly or quarterly, and individuals must finalise tax if not already done through an employer.
Service Contracts and Withholding Tax
For short-term contractors and digital nomads working under service contracts:
- PIT is withheld at 10% on monthly payments above VND 2 million.
- This is a prepayment, credited during annual finalisation.
Non-Taxable Income and Benefits
Certain benefits are excluded from PIT, including:
- One annual round-trip airfare for expats or overseas Vietnamese
- School fees (excluding tertiary) for children
- Mid-shift meal allowance (up to VND 730,000/month)
- Uniforms (up to VND 5 million/year if paid in cash)
- Relocation costs, funeral and wedding allowances
- Bank interest, pensions, life insurance payouts
- Inheritances and gifts from direct family members
- Casino winnings
Double Taxation Agreements (DTAs)
Vietnam has DTAs with over 70 countries. These allow:
- Exemption or reduction of Vietnamese taxes
- Foreign tax credits for taxes paid abroad
Important: You must file a DTA application 15 days before tax payment or within 3 years after the due date.
Whether you’re a local employee, an expatriate, or an employer, understanding Vietnam’s PIT framework in 2025 is vital. From progressive tax brackets to deductible benefits and residency rules, strategic planning ensures compliance and financial efficiency.
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