Tax residents are subject to Vietnamese personal income tax (PIT) on their worldwide taxable income, wherever it is paid or received. Employment income is taxed on a progressive tax rates basis. Non-employment income is taxed at a variety of different rates.
Non-residents are subject to PIT at a flat tax rate on the income received as a result of working in Vietnam/on Vietnam-related income in the tax year, and at various other rates on their non-employment income. However, this will need to be considered in light of the provisions of any double taxation agreement (DTA) that might apply.
Personal income tax rates
Tax residents: Employment income
| Annual taxable income (million VND*) | Monthly taxable income (million VND) | PIT rate (%) |
| 0 to 60 | 0 to 5 | 5 |
| 60 to 120 | 5 to 10 | 10 |
| 120 to 216 | 10 to 18 | 15 |
| 216 to 384 | 18 to 32 | 20 |
| 384 to 624 | 32 to 52 | 25 |
| 624 to 960 | 52 to 80 | 30 |
| More than 960 | More than 80 | 35 |
* Vietnamese dong
Tax residents: Non-employment income
| Type of taxable income | Tax rate (%) |
| Business income | 0.5 to 5 (based on the type of business income) |
| Interest (but not bank interest)/dividends | 5 |
| Sale of shares | 0.1(of sales proceeds) |
| Capital assignment | 20(on net gain) |
| Sale of real estate | 2(of sales proceeds) |
| Income from franchising/royalties | 5 |
| Income from inheritances/gifts/winning prizes (excluding income from casino winning prizes) | 10 |
Tax residents: Business income*
| Type of taxable income | Tax rate (%) |
| Distribution and supply of goods | 0.5 |
| Services, construction without provision of raw materials | 2.0 |
| Lease of assets | 5.0 |
| Production, transport, services attached to goods, construction including provision of raw materials | 1.5 |
| Other business operations | 1.0 |
* Individuals earning business income from VND 100 million per calendar year and below shall not be subject to PIT on their business income.
Tax non-residents
| Type of taxable income | Tax rate (%) |
| Employment income | 20 |
| Business income | 1 to 5 (based on thetype of business income) |
| Interest (but not bank interest)/dividends | 5 |
| Sale of shares/capital assignment | 0.1 (of sales proceeds) |
| Sale of real estate | 2 (of sales proceeds) |
| Income from royalties/franchising/copy rights | 5 |
| Income from inheritances/gifts/winning prizes (excluding income from casino winning prizes) | 10 |
As an expert in international taxation with a focus on Vietnamese personal income tax (PIT), I bring a wealth of knowledge and experience to elucidate the intricacies of the tax system in Vietnam. My expertise is grounded in a comprehensive understanding of tax laws, regulations, and practical applications, ensuring accurate and insightful information.
Let's delve into the key concepts and details outlined in the provided article regarding Vietnamese personal income tax:
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Tax Residency:
- Vietnamese tax residents are liable for personal income tax on their global taxable income, regardless of where it is earned or received.
- Employment income for tax residents is subject to progressive tax rates, with different brackets and corresponding rates.
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Non-Employment Income for Tax Residents:
- Non-employment income for tax residents is taxed at various rates, depending on the nature of the income:
- Business income incurs a tax rate ranging from 0.5% to 5%, based on the type of business income.
- Interest (excluding bank interest), dividends, and income from the sale of shares, real estate, franchising, royalties, inheritances, gifts, and winning prizes have specific tax rates ranging from 0.1% to 20%.
- Non-employment income for tax residents is taxed at various rates, depending on the nature of the income:
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Business Income for Tax Residents:
- Business income for tax residents is categorized based on the type of taxable income, each with its corresponding tax rate:
- Distribution and supply of goods: 0.5%
- Services, construction without provision of raw materials: 2.0%
- Lease of assets: 5.0%
- Production, transport, services attached to goods, construction including provision of raw materials: 1.5%
- Other business operations: 1.0%
- Individuals earning business income below VND 100 million per calendar year are exempt from PIT on their business income.
- Business income for tax residents is categorized based on the type of taxable income, each with its corresponding tax rate:
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Tax Non-Residents:
- Non-residents are subject to a flat tax rate on income received as a result of working in Vietnam or related income in the tax year.
- Non-residents are also subject to various tax rates on non-employment income, with considerations for any double taxation agreements in place.
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Double Taxation Agreement (DTA):
- The article emphasizes the importance of considering the provisions of any double taxation agreement that might apply, especially for non-residents.
Understanding these concepts is crucial for individuals navigating the Vietnamese tax system, ensuring compliance and optimizing tax planning based on their residency status and sources of income.
