Income tax in Vietnam is calculated on a straight percentage basis. Many foreign companies offer to subsidize employees’ taxes—so that regardless of their tax bracket many expats pay a flat rate of 10% income tax in Vietnam. Some expat work packages include accounting services to help calculate taxes owed in employees’ home countries, and all companies are required to withhold income tax for their employees.
Vietnam does not have tax agreements with other countries to avoid double taxation—however, most Western countries have a ceiling beneath which taxes do not have to be paid on earned income. For example, American citizens do not have to pay taxes on up to $92,900 of foreign earnings, and can exclude or deduct certain foreign housing amounts.
You will owe income tax on all income earned in Vietnam, though many non-corporate jobs pay employees under the table. Many expat English teachers are paid in cash and their income is not reported to the government.
The income tax rate for non-resident foreigners is a flat 25%.
For those with resident status in Vietnam, income is taxed at flat rates (with no deductions) as follows:
|Yearly income (in Vietnam Dong)||Tax Percentage|
|0 to 60,000,000||5%|
|60,000,000 to 120,000,000||10%|
|120,000,000 to 216,000,000||15%|
|216,000,000 to 384,000,000||20%|
|384,000,000 to 624,000,000||25%|
|624,000,000 to 960,000,000||30%|
|960,000,000 and above||35%|
Income tax is paid annually, and must be filed in March. Your company or organization will withhold taxes from your salary, and is responsible for filing your taxes and paying the government.