- Country Information
- Vietnam
In this article...
Vietnam
- What are the mandatory and optional benefits in Vietnam?
- What are the public holidays in Vietnam?
- What are the Annual Leave Entitlements in Vietnam?
- What are the Sick Leave policies in Vietnam?
- What are the Social Security contributions in Vietnam?
- What are the Standard Working Hours in Vietnam? How about Overtime?
- What are the standard Probation Periods in Vietnam?
- What are the Paid and Unpaid Leaves in Vietnam?
- What types of Employment Agreements does Horizons offer in Vietnam?
- What type of Bonuses exist in Vietnam? Are the mandatory?
- What is the minimum salary in Vietnam?
- What is the Payroll Cadence in Vietnam?
- What is the Personal Income Tax like in Vietnam?
- How are Employee Expenses reimbursed in Vietnam?
What is the Personal Income Tax like in Vietnam?
Navigating personal income tax in Vietnam is essential for both residents and expatriates. This guide provides an overview of personal income tax regulations based on information from PwC's Tax Summaries.
1. Tax Residency
Tax Residency Criteria:
- Residents: Individuals who stay in Vietnam for 183 days or more within a calendar year, or have a regular residence in Vietnam.
- Non-Residents: Individuals who do not meet the residency criteria.
Tax Implications:
- Residents are taxed on their worldwide income.
- Non-Residents are taxed only on income sourced from Vietnam.
2. Taxable Income
Income Types Subject to Tax:
- Employment Income: Salaries, wages, bonuses, and other compensation from employment.
- Business Income: Earnings from self-employment or business activities.
- Investment Income: Dividends, interest, and rental income.
- Other Income: Royalties, capital gains, and other sources of income.
3. Tax Rates
For Residents: Vietnam employs a progressive tax rate system for individual income tax. The rates are structured as follows:
- Up to 5 million VND: 5%
- 5 million VND to 10 million VND: 10%
- 10 million VND to 18 million VND: 15%
- 18 million VND to 32 million VND: 20%
- 32 million VND to 52 million VND: 25%
- 52 million VND to 80 million VND: 30%
- Over 80 million VND: 35%
For Non-Residents:
- Flat Rate: 20% on income sourced from Vietnam.
4. Deductions and Allowances
Available Deductions for Residents:
- Personal Deduction: A standard personal deduction amount.
- Dependent Deduction: Additional deductions for each dependent.
- Insurance Premiums: Deductions for mandatory social insurance and health insurance premiums.
5. Tax Filing and Payment
Filing Requirements:
- Residents must file an annual tax return if they have income beyond the standard deduction.
- Non-Residents typically do not need to file a tax return if their income is subject to withholding tax.
Payment Deadlines:
- Monthly Payments: For withholding tax on employment income.
- Annual Tax Return: Typically due by the end of March following the tax year.
6. Tax Treaties
Vietnam has double taxation agreements (DTAs) with various countries. These agreements help prevent double taxation and can offer tax relief or exemptions for residents of treaty countries.
7. Additional Resources
For detailed information and updates, refer to the PwC Tax Summaries - Vietnam website.
Understanding and complying with Vietnam’s personal income tax regulations is crucial for effective financial management and legal compliance. This guide provides a foundational understanding of the tax system, helping individuals navigate their tax obligations more effectively.
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