Personal Income Tax
There are currently four categories of taxpayers in Vietnam: Vietnamese citizens residing in Vietnam, Vietnamese citizens working or on business trips outside of Vietnam, individuals who do not have Vietnamese citizenship but reside in Vietnam indefinitely, and foreigners working in Vietnam including those who do not live in Vietnam but have income which is sourced in Vietnam. Foreigners are deemed to be resident for tax purposes if they reside in Vietnam for an aggregate of 183 days or more within 12 consecutive months since their arrival in Vietnam, although this may be substantially changed by tax treaties. Resident foreigners are subject to progressive tax rates; those who are not resident are liable to a single 25% tax on income earned in Vietnam if they spend between 30 days and 182 days in Vietnam. Only foreigners who spend fewer than 30 days in Vietnam are exempt from income tax.
Taxable Income
Incomes which are subject to personal income tax include the following:
Regular income in the form of: salaries, wages, allowances and bonuses; income derived from scientific or technical services, technology transfer, licensing of rights to use inventions or trademarks, IT services, consultancy or training services or agency services; income from royalties; broking commissions; and other income not included in salaries or wages derived from business production or provision of services which is not subject to corporate income tax.
Irregular income derived from technology transfer and lottery winnings.
Non-Taxable Income
Non-taxable income includes:
- Traveling allowances;
- Allowances for toxicity and danger;
- Allowances for positions, allowances for responsibility with respect to officials and State employees;
- Regional allowances, incentive allowances and special allowances for work in offshore islands and border areas which have extremely harsh living conditions;
- Allowances for seniority with respect to the armed forces, customs, and cipher;
- Special allowances for certain industries and trades as stipulated by law;
- Allowances for officials who carried out revolutionary activities prior to 1945;
- Other allowances from the State Budget;
- Allowances for business trips;
- Fixed meal allowances for certain special industries and trades in accordance with regimes stipulated by the State;
- Social benefits for those entitled to social security and other benefits from the State Budget;
- Insurance compensation payments in respect of personal and property insurance policies;
- Retrenchment payments in accordance with regimes stipulated by the State;
- Allowances for relocation of production establishments, including one-off allowances for transferring to another region;
- Monetary prizes for technical innovations and inventions, international awards, and national awards organized by the State of Vietnam;
- Monetary prizes accompanying titles bestowed by the State, such as professor, people's teacher, workers' hero, and hero of the people's armed forces and other titles bestowed by the State; awards or other benefits from the State Budget;
- Money paid into social insurance or health insurance from salaries and wages of workers;
- Profits of the owner of a private business which is subject to corporate income tax.
Temporary Exemption
Interest income received from bank deposits and bank savings, profits from purchases of term bonds, ordinary bonds and Government bonds, income from investment in securities, and the difference on purchase and sale of securities are temporarily exempted from income tax.
Progressive Rates
Regular Income
For Vietnamese citizens and other individuals residing in Vietnam:
|
Level
|
Average monthly per capita income (unit: 1,000 VND)
|
Rate (%)
|
|
1
|
to 5,000
|
0
|
|
2
|
over 5,000 up to 15,000
|
10
|
|
3
|
over 15,000 up to 25,000
|
20
|
|
4
|
over 25,000 up to 40,000
|
30
|
|
5
|
over 40,000
|
40
|
For foreign residents in Vietnam and Vietnamese citizens working or on business trips overseas:
|
Level
|
Average monthly per capita income (unit: 1,000 VND)
|
Rate (%)
|
|
1
|
to 8,000
|
0
|
|
2
|
over 8,000 up to 20,000
|
10
|
|
3
|
over 20,000 up to 50,000
|
20
|
|
4
|
over 50,000 up to 80,000
|
30
|
|
5
|
over 80,000
|
40
|
For foreigners who are not residents of Vietnam, the flat tax rate is 25% of the total taxable income.
In the case of fee income from technology transfer, the rate is a flat 5% on the full amount of each transaction.
Ten (10) per cent will be imposed on income from lottery winnings and promotional prizes.
