Do you have to pay tax in Vietnam? Here is some useful information on the Vietnamese tax system.
If you are planning a long stay in Vietnam, you will definitely have queries about the Vietnamese taxation system. Please note that residents of Vietnam are subject to the existing tax regime. If you are physically present in Vietnam for 183 or more for a period of twelve consecutive months as from your first entry, you will be considered a resident. Therefore, you will have to pay taxes. You will not be considered a resident if you are in the country for less than 183 days.
Income tax in Vietnam is deducted at the source of income. It is generally paid on a monthly or quarterly base. You are required to make a tax declaration at the end of the financial year or before the 28th of February of each year. This determines the rate which will be applicable to your total annual income. Note that tax rates correspond to the expatriate's global income. You may also be entitled to tax benefits. Check with the Tax Department of the Vietnamese Ministry of Finance.
The taxation rates applicable to expats living in Vietnam are progressive. These vary between 5 and 35 %. Here is some information on the income tax rate:
Amount per year (VND) Rate
Less than 60 000 000 5 %
60 000 000 - 120 000 000 10%
120 000 000 - 216 000 000 15%
216 000 000 - 384 000 000 20%
384 000 000 - 624 000 000 25 %
624 000 000 - 960 000 000 30%
Over 960 000 000 35 %
You may benefit from certain deductions depending on your family situation, for instance if you have dependent children. However, there is no special taxation regime for expatriates.
Local and foreign companies operating in Vietnam are subject to corporate tax at a fixed rate of 25%. Moreover, the Vietnamese government offers discounts ranging between 10 and 20% foreign companies in order to encourage more investment in the country.
The value-added tax (VAT) is currently levied at a rate of 10 %. Agricultural, medical, and water are taxed at a reduced rate of 5%.