Taxes in Vietnam: A Guide for Expatriates

As a popular destination for expats, Vietnam has taxes that are relatively low globally. The country operates on a progressive income tax system.

Aside from income tax, there’s also a low Value Added Tax (VAT).

Personal Income Tax

The income tax rate is progressive from 5 to 35 per cent, depending on your revenue. This tax applies to all forms of income, including dividends (except government bonds), interests (except bank deposits and life insurance), winnings, prizes and transfer of land.

If you are deemed a resident in Vietnam, then you will be taxed on your worldwide income, meaning from both within and outside the country.

You are a resident if you have been in Vietnam for 183 days or more, maintain a residence in the country or lease a residence for 90 days or more.

The rates are as follows:

• VND 0 – 60,000,000: 5%
• VND 60,000,001 – 120,000,000: 10%
• VND 120,000,001 – 216,000,000: 15%
• VND 216,000,001 – 384,000,000: 20%
• VND 384,000,001 – 624,000,000: 25%
• VND 624,000,001 – 960,000,000: 30%
• Above VND 960,000,001: 35%

There are certain deductions available, including for children under 18, unemployed spouses, elderly parents and charitable donations.

If you are a non-resident, you will be taxed at a flat rate of 20 per cent on any Vietnamese-sourced income.

There are some specific taxes that will apply from certain sources of revenues, such as capital investments, franchises, real estate, incomes from business & production of goods or services.

Note that personal income tax is different from corporate income tax, in which companies are generally taxed a flat rate of 20 per cent, with some exceptions being taxed between 32 to 50 per cent.

Value Added Tax (VAT)

The VAT applies to goods and services which are used for production, trading and consumption as well as on imported goods. In Vietnam, the standard rate is set at 10 per cent. However, some categories fall under zero or five per cent.

The zero rate is sometimes given to exported goods and services, goods sold to duty-free shops, and aviation, marine and international transportation services.

The five per cent rate is given to particular goods and services for the Vietnamese economy. This usually includes clean water, books, medicine, medical equipment, teaching aids, scientific service, unprocessed food and agriculture products.