If an individual has a permanent residence as mentioned above, but stays in Vietnam for less than 183 days in a tax year and can prove that he or she is a tax resident of another country, he or she is treated as a Vietnam tax nonresident in that tax year. The document required to prove tax residency of a foreign country is the original tax residency certificate issued by the foreign tax authority. If a foreign country that signed a double tax treaty with Vietnam does not issue the tax residency certificate for its tax resident, the expatriate employee may use the passport with the day in and day out of Vietnam to prove the resident days in Vietnam.
An individual who does not meet the conditions to be a tax resident of Vietnam is considered a Vietnam tax nonresident.
Tax year. The Vietnamese tax year is the calendar year. However, if an individual stays in Vietnam for less than 183 days in the calendar year of arrival but more than 182 days in the first 12 consecutive months, the first tax year is the 12-month period from the date of arrival. Subsequently, the tax year is calendar year.
For tax resident individuals who are citizens of countries having double tax treaties with Vietnam, their tax obligation is calculated from the month in which they arrive in Vietnam. An expatriate employee is only required to file the tax return to report the taxable income in Vietnam until the terminated date of assignment. This is determined based on the letter of confirmation from the employer for the last working day in Vietnam.
Income subject to tax. Residents are taxed on their worldwide income, while nonresidents are taxed on their Vietnam-source income.
Under the PIT Law, the following 10 types of income are subject to tax:
• Income from business
• Income from employment
• Income from capital investment
• Income from capital transfers
• Income from transfers of real property
• Income from royalties
• Income from franchising
• Income from winnings or prizes
• Income from the receipt of inheritances
• Income from the receipt of gifts
The taxation of various types of income is described below.
Income from employment. Employment income includes all cash remuneration and benefits in kind (for example, salaries, wages, bonuses, allowances, premiums, directors’ fees and remuneration, housing benefits [with a tax concession; see next paragraph], income tax and benefits paid by the employer, and other payments for employment services rendered). Progressive tax rates ranging from 5% to 35% apply to both Vietnamese and expatriate residents (see Tax rates), while a flat rate of 20% applies to nonresidents. Income received in foreign currency is converted to Vietnamese dong when calculating taxable income.
• Tax rates applied on revenue vary depending on the business sectors (see Tax rates).
An individual engaged in business who hires 10 employees or more is required to set up a corporation in accordance with the Enterprise Law, prepare documentation and invoices in accordance with the Vietnamese accounting regulations, and pay corporate income tax.
Income from capital investment. Income from capital investment includes the following:
• Interest on loans granted to organizations, enterprises, business households in accordance with loan agreements, except for interest paid by banks and credit institutions
• Dividends
• Profits from other forms of capital contributions, including capital contributions in the form of commodities, reputation, land-use rights and inventions, except for income after payment of corporate income tax of private companies and singlemember limited liability companies under the ownership of individuals
• Interest on bonds, treasury bills and other valuable instruments, except for bonds issued by the Vietnamese government
Income from capital investment paid to tax resident and tax nonresident individuals is taxed at a rate of 5%.
Income from capital transfers. Income from capital transfers includes the following:
• Gains derived by individuals from the transfer of capital contributions in limited liability companies, partnerships and shareholding companies. The assessable income from transferring contributed capital equals the transfer price minus the purchase price of the transferred capital and reasonable expenses related to the generation of the income from the transfer of capital. A 20% tax rate is applied to the gains of tax resident individuals and 0.1% tax is applied to the sales proceeds of tax nonresident individuals.
• Income from securities transfers, including income from transferring shares, stock options, bonds, treasury bills, fund certificates and other securities according to the regulations of the Law on Securities, and income from transferring shares of persons in joint stock companies according to the Law on Enterprises. A 0.1% tax is applied to the sales proceeds of tax resident and tax nonresident individuals.
Income from the transfer of real property. Income from the transfer of real property includes the following:
• Income received from the transfer of land-use rights, residential houses and other assets attached to land
• Transfer of ownership or rights to the use of residential houses, lease rights to land or water surfaces and other rights to real property
Assessable income from real property transfers is the price agreed in the transfer contract at the time of transfer. A tax rate of 2% is applied to the transfer price.
Income from royalties. Income from royalties is income derived from the assignment or transfer of the right to use intellectual
• Income from winning prizes in casinos
Tax reduction. Foreign experts working for official development assistance projects or with respect to programs or plans of nongovernmental organizations in Vietnam are exempt from tax if they meet certain conditions. They must submit an application for exemption as required by law.
Taxation of employer-provided shares. Shares provided to employees are taxable as employment income and taxed at the time of transfer or sale. The taxable income equals the value of the shares recorded in the employer’s accounting books. Income from the transfer of the awarded shares is also subject to capital gains tax (see Income from capital transfers).
Tax deductions. The deductions described below are available to tax residents who have employment income.
Personal and dependent relief. Personal relief of VND11 million per month is automatically granted to resident individuals who derive employment income. Dependent relief of VND4,400,000 is granted for each eligible dependent. No limit is imposed on the number of dependents. However, an eligible dependent must meet certain conditions with respect to income, age and his or her relationship with the taxpayer. A registration dossier for qualified dependents is also required to be submitted to the tax authorities.
Mandatory contributions. Mandatory social, health and unemployment insurance contributions, including mandatory contributions by expatriates to overseas schemes in the home country, with the same nature as the compulsory insurance schemes in Vietnam, are deductible from employment income for PIT purposes.
Contributions to charity. Certain contributions to registered charitable, humanitarian or study promotion funds are deductible.
Contributions to voluntary retirement funds. Contributions to voluntary pension funds, which are established in accordance with the Ministry of Finance’s guidance, are deductible from taxable income. However, the deduction is capped at VND1 million per month for both employer and employee contributions.
Contribution to the disaster prevention fund. The contribution to the disaster prevention fund established in accordance with Decree 78/2021/ND-CP is deductible. This is a compulsory employee contribution to the government’s disaster prevention fund. The contribution equals one day of salary per year (based on the regional minimum salary).
Foreign tax credit. Tax paid on foreign-sourced income in other countries may be claimed as a credit against the tax liability in Vietnam. However, the amount of the credit may not exceed the amount payable in accordance with the Vietnamese tax scale that is assessed and allocated to the part of the income arising overseas. To claim the foreign tax credit, an application and required supporting documents must be filed with the tax authorities.
Tax rates
Employment income. The table below presents the progressive tax rates on employment income of resident individuals. To
calculate the tax due by using the table, multiply the taxable income by the tax rate and then subtract the bracket adjustment. The following is the table.
Business income. The following table presents the PIT rates on business income for various activities, which apply to tax residents.
The following table presents the PIT rates on business income for various activities, which apply to tax nonresidents.
Other non-employment income. The following fixed tax rates are imposed on income derived by resident individuals other than employment and business income.
transfer, transfer of real property, royalties, franchising, winnings, inheritances and gifts) must be declared within 10 days from the date on which the tax arises.
A Vietnamese company that signs a contract with the foreign contractor who assigns its expatriate employees to work in Vietnam to perform the service is required to notify the Vietnamese tax authorities of the list of these expatriates (including name, nationality, working period, job title and estimated income) within seven days before they arrive to work in Vietnam.
D. Tax treaties
Vietnam has entered into double tax treaties with the jurisdictions listed below. Exemption under double tax treaties is not automatic in Vietnam and an application must be filed before relying on the exemption.
Algeria*
Australia
Austria
Azerbaijan
Bangladesh
Belarus
Belgium
Brunei
Darussalam
Bulgaria
Cambodia
Canada
China Mainland
Croatia*
Cuba
Czech Republic
Denmark
Egypt*
Estonia
Finland
France
Germany
Hong Kong
Hungary
India
Iceland
Indonesia
India
Iran
Ireland
Israel
Italy
Japan
Kazakhstan
Korea (North)
Korea (South)
Kuwait
Laos
Latvia
Luxembourg
Macau
Malaysia
Malta
Mongolia
Morocco
Mozambique
Myanmar
Netherlands
New Zealand
North Macedonia*
Norway
Oman
Pakistan
Palestinian
Authority
Panama
* This treaty is not yet in force.
E. Entry visas
Philippines
Poland
Portugal
Qatar
Romania
San Marino
Saudi Arabia
Serbia
Seychelles
Singapore
Slovak Republic
Spain
Sri Lanka
Sweden
Switzerland
Taiwan
Thailand
Tunisia
Türkiye
Ukraine
United Arab
Emirates
United Kingdom
United States*
Uruguay
Uzbekistan
Venezuela
The sections below provide only the general standard business immigration requirements for a foreigner to work in Vietnam. Various requirements and practices are not described in this book. Professional advice should be obtained on a case-by-case basis.
All foreigners must have a passport or passport substitute papers that are valid for at least six months and a visa granted by the competent Vietnamese agencies, except for citizens of countries
that have visa exemptions included in bilateral consular agreements with Vietnam (Association of Southeast Asian Nations [ASEAN] member countries and Kyrgyzstan), Chile and Panama or unilateral agreements with Vietnam (Belarus, Denmark, Finland, France, Germany, Japan, Korea [South], Italy, Norway, the Russian Federation, Spain, Sweden and the United Kingdom). Citizens of these countries may enter Vietnam as tourists or business travelers for 14, 21, 30, 45 or 90 days per trip, respectively, depending on their nationality.
To legally enter Vietnam, foreigners must apply for a visa corresponding to the entry purpose and provide supporting documents. After the visa is granted, the foreigner is responsible for acting in accordance with the registered purpose of entry, and this purpose should not be changed during the stay in Vietnam.
A working/labor visa is required for those who work in Vietnam. A work permit or work permit exemption certificate is required to be enclosed in the visa application. The maximum duration of a labor visa is 12 months. A business visa can be obtained for a business trip or a short working period in Vietnam. The duration of a business visa is up to three months, with multiple entries. The current processing time is five to seven working days from the date of filing.
A foreign individual can also apply for an e-visa to enter Vietnam for business purpose. An e-visa is valid for up to 90 days and allow holders to enter and depart from Vietnam multiple times. The immigration authority takes from three to five working days to grant the e-visa from the date of filing.
F. Work permits
A work permit is required for a foreign national to legally work in Vietnam, except for cases of work permit exemptions. This document is granted only to a foreign national who is sponsored by an entity in Vietnam.
A foreigner who enters Vietnam to work for intervals of up to 30 days and no more than 3 times per calendar year as a manager, executive director, specialist or technician is not required to obtain a work permit.
Procedure and standard timeline. The sponsoring entity in Vietnam must advertise the vacancy job(s) on the labor authority’s online portal to Vietnamese laborers for at least 15 days. If the sponsoring company is not able to find a Vietnam laborer qualifying for the vacant job, the company can submit the demand for using foreign nationals working in Vietnam to the relevant labor authority at least 15 days before recruiting or transferring the foreign nationals to work in Vietnam. Within 10 working days after receiving the demand, the local labor authority responds to the sponsoring entity in writing regarding the acceptance or refusal of the demand. This letter is a pre-approval for using foreign employees in Vietnam for a specific position and is the integral document of the work permit application/work permit reissuances and work permit exemptions dossiers.
A work permit application must be filed with the local labor authority at least 15 calendar days before the expected
commencement date for the employee. The current processing time as stated in the prevailing regulation is five business days.
The required documents in work permit application dossiers that are issued in foreign countries must be legalized in the country of issuance to be recognized in Vietnam. Depending on the diplomatic relations between Vietnam and the country of issuance, the steps required to legalize the documents may vary. Consequently, the total processing time for work permit applications may take one to three months or more.
A work permit can be granted with a maximum validity period of two years and can be extended one time for an additional two-year period. Foreign nationals who wish to remain in Vietnam for more than four years must apply for a new work permit after completing four years in Vietnam.
Qualification requirements. A foreign national who wants to work in Vietnam must meet the required qualifications for a preapproval position. The following are four main categories of work permits:
• Manager
• Executive director
• Expert
• Technician
The following are the requirements for the above work permit categories:
• For manager and executive director positions according to the definition in the Law on Enterprise, the company’s enterprise registration certificate, appointment decision/assignment letter and charter/operational regulation are required.
• At least three years of relevant professional experience and a bachelor, engineering or equivalent or higher degree are required for specialists. Alternatively, the specialist must have five years of overseas working experience and have a practitioner certificate related to the position applied for in Vietnam.
• A minimum one-year training certificate and three years of relevant experience is required for technicians. Alternatively, the technician is required to have at least five years of experience corresponding to the job position to which he or she will be appointed in Vietnam.
In addition to the above qualifications, foreign nationals will generally fall into one of two major categories: intra-company transfer and local hires. An intra-company transfer must have worked for his or her home employer for at least 12 consecutive months prior to the work permit application. The local hire must sign a local employment contract with the sponsoring entity in Vietnam. Both intra-company transfers and local hires must submit documentation proving that they meet the necessary criteria.
Work permit exemptions. There are 20 cases entitled to work permit exemptions as provided in the current Labor Code and the Decree on Work Permit. The following are typical examples of individuals who are exempt from the requirement to obtain a work permit in Vietnam:
• A foreigner who enters Vietnam to work for up to 30 days and no more than three times per calendar year
• A foreigner who is a contributing member or owner of a limited liability company whose individual capital contribution is at least VND3 million
• A foreigner who is a member of the board of directors of a joint stock company whose individual capital contribution is at least VND3 million
• A foreigner who is married to a Vietnamese citizen and residing in Vietnam
In general, for the above listed cases for work permit exemption, the sponsoring entity is not required to submit the application for a work permit exemption certificate. For the remaining cases, under the prevailing regulations, the sponsoring entity in Vietnam must process the job posting to Vietnamese laborers and submit the demand for using foreign nationals working in Vietnam to the relevant labor authority at least 15 days before recruiting the foreign nationals to work in Vietnam. At least 15 calendar days before the date the foreign national is supposed to begin work, the sponsoring entity must submit the work permit exemption application to the respective local authority for the place where the foreign national will work regularly.
The local labor authority issues a written certificate to the employer within five working days after the date on which a sufficient application is received. A written response and explanation are provided if the work permit exemption application is rejected.
G. Temporary residence card
The temporary residence card serves as a multiple-entry visa with a minimum term of one year. The maximum term of the temporary residence card is subject to the term of the work permit, the work permit exemption certificate, the validity of the business license and the applicant’s passport.
A temporary residence card is granted to a foreigner who has a valid work permit or work permit exemption certificate with duration of over one year and his or her legal spouse and children under 18 years old. Documents proving the relationships between the principal applicant and the dependents must be legalized and translated into Vietnamese for the temporary residence card application.
This card can only be granted after the applicant has entered Vietnam using the correct visa. The current processing time at the local authority is five to seven business days from the date of the filing of the application.