• Taxpayers

Vietnamese and foreign individuals with income earned in Vietnam shall be subject to PIT.

For tax residents, all income is taxable regardless of the location it was derived from or the payment and receipt of the taxable incomes. For non-tax residents, taxable income is the income earned within Vietnam’s territory only, regardless of the location of payment and receipt         .

  • Taxresidents and non-tax residents

Tax residents are persons who meet one of the following conditions:

  • Being present in Vietnam for 183 days or longer in a calendar year, or for 12 consecutive months from the day on which they arrived in Vietnam;
  • Having a regular residence in Vietnam according to the legislation on residence. For foreigners, the regular residence is the permanent residence as written in their permanent residence card, or the temporary
  • residence when applying for the temporary residence card issued by the competent State authorities of Vietnam; or
  • Renting a house in Vietnam under a contract that lasts 183 days or longer in the tax year or renting houses for a total of 183 days in the tax year when renting multiple houses.

Non-tax residents are all other persons not meeting one of the above conditions.

  • Employmentincome 

Whilst there is no definition of employment income, it is clearly understood that it is the income paid to employees from the employers. The scope of employment income is broad and includes all cash and benefits in-kind. However some of following forms of employment income are not subject to PIT: Article 3.2.g Decree 65/2013.

  • Non-employmentincomes

In addition to the forms of employment income which are subject to PIT, other incomes not directly derived from employment but are still subject to PIT include:Business income; Investment income; Income from capital transfer; Income from real estate transfer; Income from inheritance; Income from gifts; Income from winning prizes; Loyalties; and Incomes from franchising.

  • PIT rates
  • Appliedto tax residents

For employment income, the tax rates are imposed according to a progressive tax table as prescribed by Article 14 of Decree 65/2013.

For business income, the tax rates vary depending on an individual’s field of work. Revenue means the amounts earned from the sale of goods, processing of goods, commission, payments for services during the tax period from manufacturing or the sale of goods/services:

Business                                                                                                      tax rate (%)

Distribution, supply of goods

Services and construction; exclusive of building materials

Asset leases; insurance brokerage, lottery brokerage; multi-level marketing brokerage

Manufacturing; transport and services associated with goods; construction inclusive of building materials

Other business activities

0,5
2
5
1.5
1

 

For other incomes, the tax rates imposed are as follows:

Types of income                                                                  Tax rates (%)

 

Incomes from capital investment Incomes from capital transfer Incomes from securities transfer Incomes from real estate transfer Incomes from royalties

Incomes from franchising Incomes from wining prizes

Incomes from inheritance and gifts

5
20
0.1 on selling price
2 on selling price
5
5
10
10

 

Applied to non-tax residents, the PIT rates are as follows:

Types of income                                                        Tax rates (%)

 

Incomes from business activities

 

 

Incomes from employment Incomes from capital investment Incomes from capital transfer Incomes from real estate transfer

Incomes from royalties or franchising

Incomes from wining prizes, inheritance or gifts

1 – 5 subject to types of business incomes
20
5
0.1on selling price
2 on selling price
5
10

 

  • Taxrelief

Tax residents with business or employment income are entitled to tax deductions from their total taxable income before calculating the payable tax amount. Such tax reliefs include:

  • Personal relief: VND09 million/month or VND108million/month;
  • Dependent relief: VND3.6million/person/month. The tax payer is required to register the dependent(s) with the local tax authorities to receive this tax relief;
  • Contributions to mandatory social insurance, health insurance and unemployment insurance;
  • Contributions to voluntary pension (capped at VND1milliion/month or VND12million/year); and
  • Contributions to certain approved charities.