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Vietnam Personal Income Tax

Vietnam personal income tax rates are progressive to 35%. Nonresidents are taxed at a flat tax rate of 20%. Nonemployment income is taxed at rates from 0.1% to 25%.

PIT rates

Taxable Income per year (VND)       Tax rate

  • VND 0 - 60,000,000                          5%
  • VND 60,000,000 - 120,000,000          10%
  • VND 120,000,000 - 216,000,000        15%
  • VND 216,000,000 - 384,000,000        20%
  • VND 384,000,000 - 624,000,000        25%
  • VND 624,000,000 - 960,000,000        30%
  • Above VND 960,000,000                   35%

 

Residents - Other tax rates on resident individuals

  • Income from capital investment, copyright and franchise activities         5%
  • Income from transfer of capital                                                          20%
  • Income from transfer of real estate                                                    25%

 

Non-residents - Other tax rates on non-resident individuals

  • Income from business and production of goods                                         1%
  • Income from business and production of services                                      5%
  • Manufacturing, construction, transport and other activities                         2%
  • Salary and wages                                                                                  20%
  • Income from capital investment                                                               5%
  • Transfer of capital                                                                                  0.1%
  • Transfer of real estate                                                                            2%
  • Copyright and franchise activities                                                             5%
  • Lottery wins, inheritance and gifts which are securities, capital or assets     10%

All residents and non-residents are subject to Personal Income Tax in Vietnam.

A resident is liable to pay tax on income sourced in Vietnam as well as on the portion of income from foreign sources (except for non-taxable income, including income from real estate transferred between a husband, wife and blood-relations, scholarships, and overseas remittances).

  • Deductions are available for family considerations for residents, comprising children
  • under 18, unemployed spouses and elderly and unemployed parents.
  • Individuals are responsible for self-declaration and payment of tax.
  • Tax Basis – Vietnamese residents are taxed on their worldwide income; nonresidents are taxed only on Vietnamese-source income.

Residence – An individual is resident if he/she: (1) spends 183 days or more in the aggregate in a 12-month period in Vietnam starting from the date the individual arrives in Vietnam; (2) maintains a residence in Vietnam; or (3) has leased a residence for 90 days or more in a tax year.

Tax Filing status – Individuals must file separate tax returns; joint tax filing is not permitted.

Taxable income – Employment income, including most employment benefits, is taxable. As from 1 January 2009, dividends (except for government bonds), interest (except for bank deposits and life insurance), capital gains from securities trading, private business income and other income from franchising, inheritance, the transfer of land use rights, and gifts/winnings or prizes are taxable in Vietnam. Profits derived from the carrying on of a trade or profession generally are taxed in the same way as profits derived by companies.

Taxation of Capital gains – Gains from a capital assignment and/or securities trading are subject to 0.1% tax on the gross sale or 20% of net profit.

Tax Deductions and allowances – Subject to certain restrictions, deductions are granted for compulsory social security and health insurance. Severance allowances and redundancy compensation are not taxable. As from 1 January 2009, all benefits in cash or in kind paid by the employer are fully taxable. A new personal income tax law provides more deductions, including a personal deduction (VND 4 million per month) and a dependent deduction (VND 1.6 million/dependent per month). Charitable donations may be deducted in full from taxable income.

Other taxes on individuals:

  • Capital duty – No
  • Stamp duty – Rates of 0.5%-15% apply on the transfer of property.
  • Capital acquisitions tax – No
  • Real property tax – The municipal authorities levy a tax on real estate.
  • Inheritance/estate tax – Inheritances and gifts are subject to income tax at special rates.
  • Net wealth/net worth tax – No

Social security contributions in Vietnam – Vietnamese employees are required to make SI, HI and UI contributions at rates of 5%, 1.5% and 1% of the employee's salary, respectively. Expatriates are only subject to the HI.

Tax Filing and payment of tax – Tax on employment income is withheld by the employer and remitted to the tax authorities. An individual must file a tax return and make a final tax payment by 30 March in the year following the assessment year.

Vietnam Tax year – Vietnam tax year is the calendar year

Penalties – Taxpayers are subject to an extra 0.05% for late payment, 10% on underreported amounts and more stringent penalties for tax evasion.

Source: Gov.vn

 

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