Personal income tax for foreigners working in Vietnam: resident or non-resident, tax rates, finalisation and leaving Vietnam

Foreigners who receive a salary in Vietnam must pay personal income tax (PIT). How much you pay depends first and foremost on whether you are a resident or a non-resident individual. On the same salary, the two statuses produce different amounts of tax, different withholding methods and different finalisation obligations.

2026 brings major changes. The Law on Personal Income Tax No. 109/2025/QH15 was promulgated on 10/12/2025, takes effect from 01/7/2026 and replaces the 2007 Law on Personal Income Tax. However, the provisions on residents' income from salaries and wages apply to the whole 2026 tax period. Some guiding documents on tax administration are in a transitional phase, so employees and HR departments should check again with the tax authority before completing any procedures.

Resident and non-resident individuals: the 183-day rule

You are a resident individual if you meet just one of the conditions below. If you meet none of them, you are a non-resident individual.

The scope of taxation differs. Residents are taxed on their worldwide income, including income arising abroad. Non-residents are taxed only on income arising in Vietnam, regardless of where it is paid. For example, a salary paid by an overseas parent company for work carried out in Vietnam is still income arising in Vietnam.

The criteria below are described according to currently available guidance and are the same as under the old law. The wording in Law 109/2025/QH15 may differ in detail, so check the text if your situation is close to the line.

• You are present in Vietnam for 183 days or more in a calendar year, or within 12 consecutive months from your first day of presence.
• You have a habitual residence in Vietnam: a permanent residence recorded on your permanent residence card, or a registered temporary residence confirmed by an agency under the Ministry of Public Security.
• You have a residential lease with a term of 183 days or more in the tax year.
• If you arrive mid-year, count your days of presence both ways (calendar year and 12 consecutive months) to find out which group you fall into.

Tax rates and deductions

Residents pay tax on income from salaries and wages under a 5-band progressive schedule, applicable from the 2026 tax period. Compared with the old schedule, the new one removes the 15% and 25% rates, reduces the number of bands from 7 to 5, and raises the threshold of the top band from over 80 million to over 100 million dong per month. The income levels below refer to taxable income, i.e. after deductions.

Residents are entitled to family circumstance deductions. According to currently available guidance, the deduction is 15.5 million dong/month for the taxpayer and 6.2 million dong/month for each dependant. Please confirm these amounts with the tax authority or your company's accountant. To register a spouse or children living abroad as dependants, you will usually need documents proving the relationship, such as birth certificates or a marriage certificate.

Non-residents are subject to a flat rate of 20% on income from salaries and wages arising in Vietnam. Non-residents receive no family circumstance deductions and cannot deduct compulsory insurance contributions, and the paying organisation withholds the tax when paying the salary. If your country has a double taxation agreement with Vietnam, you may be exempt from tax or pay less if you meet the agreement's conditions. Ask the tax authority directly about the procedure for applying the agreement.

• Band 1: up to 10 million dong/month, tax rate 5%.
• Band 2: over 10 to 30 million dong/month, tax rate 10%.
• Band 3: over 30 to 60 million dong/month, tax rate 20%.
• Band 4: over 60 to 100 million dong/month, tax rate 30%.
• Band 5: over 100 million dong/month, tax rate 35%.

Tax identification numbers for foreigners

Under Circular 86/2024/TT-BTC on tax registration, from 01/7/2025 Vietnamese citizens use their 12-digit personal identification number in place of a tax identification number. Foreign nationals do not have an identification number in the National Population Database, so the tax authority still issues them a 10-digit tax identification number.

The employer usually registers the tax identification number for its foreign employees. The application form, supporting documents and processing time may change when new guiding documents take effect, so check the current requirements before applying.

• Register for a tax identification number soon after you start receiving a salary, so that withholding and finalisation run smoothly.
• Prepare a copy of your valid passport. The name on your tax records must match your passport.
• When you renew your passport, tell the accountant so your tax registration details can be updated.
• Keep your tax identification number. You will need it for finalisation, registering dependants, or if you come back to work later.

Annual tax finalisation

Tax withheld each month is only provisional. At the end of the year, residents finalise their tax to recalculate the actual amount due on their full-year income. For the 2026 finalisation, carried out in early 2027, all of a resident's 2026 employment income is calculated under the 5-band schedule and the new deduction amounts.

Depending on the case, residents can authorise the paying organisation to finalise on their behalf or finalise directly with the tax authority. People with income from abroad usually have to declare that income themselves. Finalisation deadlines, declaration forms and tax refund procedures under the new legal framework should be checked again with the tax authority.

Non-residents generally do not need to finalise income from salaries and wages, as 20% has already been withheld at source. Sources interpret this differently, so if you have several sources of income in Vietnam, ask the tax authority.

• An income confirmation letter or tax withholding certificate from your company.
• Documents on income arising abroad, if any.
• Dependant registration documents and proof of relationship.
• Proof of tax paid abroad if you want to offset it under a tax treaty.

When leaving Vietnam

Under the old rules in Circular 92/2015/TT-BTC, foreign resident individuals whose employment contract in Vietnam ends must finalise their tax before leaving the country. If there is not enough time, they may authorise the paying organisation or another organisation or individual, with the authorised party undertaking responsibility for the tax due. The deadline for filing is no later than the 45th day from the date of departure.

These rules may have been amended now that the new Law on Personal Income Tax and new tax administration documents take effect from 01/7/2026. Guidance sources are also inconsistent on whether finalisation can be delegated when leaving Vietnam mid-year. Ask the tax office managing your file before your last working day.

Outstanding tax can lead to a temporary exit ban. Do not leave any tax unsettled once your flight is booked.

• Tell HR your leaving date early so your final salary and withheld tax can be settled.
• Get an income confirmation letter and tax withholding certificate before you leave.
• Decide whether you will finalise yourself or authorise someone, and who is responsible if additional tax is due.
• If you are due a refund, leave your bank account details and contact information for after you return home.
• Keep your tax records for filing in your home country or if you return to Vietnam.

What HR departments should keep in mind

The employer withholds tax every month, so getting residency status wrong from the start means the tax will be wrong for the whole year. A new arrival may be non-resident in the first months and become resident once the conditions are met, and the reverse can happen when they leave.

• Track the days of presence and residential lease terms of each foreign employee.
• Review residency status when an employee arrives, renews their contract or prepares to leave.
• Include salary paid by an overseas parent company for time worked in Vietnam.
• Check under current guidance whether benefits such as rent paid by the company count as taxable income.
• Keep up to date with new guidance from the tax authority before the 2026 finalisation season.

How Gateway can help

Gateway does not file or finalise tax on your behalf. That is done by the company's accountant, a tax agent or you yourself with the tax authority. Gateway handles the related documents and tasks, carried out by the same specialist already handling your file. Contact: [email protected], +84367387309.

• Translating birth certificates, marriage certificates and employment contracts into Vietnamese and certifying the translations for submission to government agencies.
• Checking whether foreign documents need an Apostille, consular legalisation or are exempt, and legalising them for use in Vietnam.
• Booking international flights, helping change dates subject to airline conditions, and issuing invoices to companies booking tickets for their experts.
• Advising on and registering a Vietnamese SIM in your own name using your passport, to receive verification codes for banks and apps.