Vietnam PIT for Foreigners: Worked Examples and Treaty Edges

This is the page for people who already understand the basics of Vietnamese personal income tax and want worked numbers and the edge cases that the official handbooks won't lay out cleanly.

Bracket structure (2026)

For tax residents on monthly income:

Non-residents (under 183 days): flat 20% on Vietnam-source income, zero on foreign-source.

Deductions for residents

• Personal allowance: 11,000,000 VND/month
• Dependant allowance: 4,400,000 VND/month each
• Compulsory SI/HI/UI contributions
• Approved charitable donations
• Voluntary pension contributions to licensed Vietnamese funds (capped 1m/mo)

Worked example 1: salaried teacher

Income: 50m VND/mo gross. No dependants. No SI/HI/UI (foreign worker exemption from mandatory SI/HI in some categories, but post-2018 expats earning under work permits do pay SI).

Assume employer pays SI/HI/UI; employee portion 10.5% = 5.25m.

Taxable: 50 − 5.25 − 11 = 33.75m

PIT:

• 0.25m (5% bracket)
• 0.5m (10% bracket)
• 1.2m (15% bracket)
• 2.8m (20% bracket)
• (33.75 − 32) × 25% = 0.44m

Total PIT ≈ 5.19m VND/mo (~$208) on 50m gross.

Effective rate: ~10.4%. Take-home: ~39.5m VND.

Worked example 2: freelancer, $5,000/mo from foreign clients

Income: $5,000/mo ≈ 125m VND. Resident. No SI/HI/UI (self-employed not on company payroll). One dependant child.

Taxable: 125 − 11 − 4.4 = 109.6m

PIT:

• Up to 80m: 18.15m
• (109.6 − 80) × 35% = 10.36m

Total PIT ≈ 28.5m VND/mo (~$1,140) on $5,000.

Effective rate: ~23%.

If the same person is non-resident (under 183 days): foreign-client income is foreign-source, zero Vietnamese PIT.

The 183-day decision can be worth $13,000/yr in this case. Plan accordingly.

Worked example 3: $30,000 UK pension, resident retiree

Annual: ~750m VND. Monthly: 62.5m. Single, no dependants.

Per UK–Vietnam treaty, private pension is taxable in Vietnam.

Taxable: 62.5 − 11 = 51.5m/mo

PIT/mo:

• Up to 32m: 4.75m
• (51.5 − 32) × 25% = 4.88m

Total 9.6m/mo ($385), ≈ $4,600/yr.

UK government (state) pension portion is taxable in the UK only and excluded from this calculation.

FEIE for US citizens

US citizens are taxed by the US on worldwide income regardless of residence. Vietnam has no current ratified US tax treaty. Tools:

1. Foreign Earned Income Exclusion (FEIE) — IRS Form 2555. Excludes ~$130,000 of foreign-earned income (2026 figure) if you pass Bona Fide Residence or Physical Presence test. Does not cover passive income, capital gains, dividends.
2. Foreign Tax Credit (FTC) — Form 1116. Credit US tax against Vietnamese PIT actually paid. Use this if your income exceeds FEIE or you have passive income.

Most US freelancers in Vietnam under the FEIE cap pay Vietnamese PIT and owe little/no US federal tax on earned income. They still file 1040 and FBAR for any Vietnamese account over $10k.

Treaty applications

Vietnam has DTAs with 80+ countries (UK, Australia, Canada, Germany, France, Singapore, Japan, Korea, etc.). To claim treaty relief on Vietnamese-source income paid to a foreign resident, file:

• DTA application form (provided by paying party's accountant)
• Tax-residence certificate from home country
• Proof of beneficial ownership
• 15 days before payment

Common use: foreign contractor reduces FCT from 10% to treaty rate.

Annual finalisation

Tax-resident individuals file annual PIT finalisation by 31 March of following year. Employers do this for employees with single-source income; multi-source earners (you have side income) must file personally via eTax.

What gets people in trouble

• Crypto — Vietnam doesn't have clear PIT rules on crypto gains yet. Don't assume zero.
• Foreign property rental — taxable to a Vietnamese resident.
• Selling shares abroad — capital gains taxable to a Vietnamese resident at 0.1% on sale value (securities) or 20% on gain (other capital assets).
• Not declaring foreign-bank interest — taxable for residents.

Honest take

Most expats hire an accountant for $200–500/yr to file their annual PIT. It's worth every dong. The PIT logic isn't conceptually hard, but the e-filing system is Vietnamese-only and the consequences of mis-filing are penalty interest at 0.03%/day. Pay someone.

Related

• Vietnam tax residency
• Freelancing from Vietnam
• Retiring in Vietnam
• Payroll and social insurance

Summary

Vietnam taxes foreigners' personal income on a residency-based system: residents (180+ days) pay progressive PIT on worldwide Vietnam-source income; non-residents pay flat 20% on Vietnam-source only. For expats earning $5,000–$30,000/mo, the effective rate typically ranges 10–25% depending on residency status and income type, and treaty applications can unlock lower withholding rates on foreign-source payments processed through Vietnam.

Process at a glance

1. Determine residency status — 180+ calendar days in calendar year = resident; calculate days and plan visa structure.
2. Identify income source(s) — Vietnam-source (salary, local rental, business), foreign-source (offshore freelance, pension), or mixed.
3. Apply deductions — Personal allowance (11m VND/mo), dependants, SI/HI/UI, approved charitable giving.
4. Calculate bracket — Use the 7-tier progressive table (5%–35%) for residents, or flat 20% for non-resident Vietnam-source.
5. Treaty relief (if applicable) — Non-residents claiming treaty rates must file DTA application + tax-residence cert 15 days pre-payment.
6. File annual finalisation — Residents file PIT finalisation by 31 March following year; employers handle single-source employees.

Cost breakdown

These are illustrative and exclude social-insurance contributions where mandatory (employment), voluntary pension, and investment gains. The 183-day residency decision alone can swing annual liability by $10,000+. US citizens under FEIE may owe zero US federal tax but still pay Vietnamese PIT; FTC applies if income exceeds the exclusion.

Common pitfalls

• Crossing the 180-day line — Inadvertently becoming a resident on day 181 locks you into progressive brackets retroactively; plan visa structure carefully.
• Forgetting foreign-bank interest and capital gains — Residents must declare foreign-source investment income; many expats assume it's not taxable and face penalties.
• Misclassifying treaty income — Applying treaty relief without the required tax-residence certificate results in rejection; start the DTA process 3 weeks ahead.
• eTax filing system friction — The online filing portal is Vietnamese-only (no English), and day-late submissions incur 0.03%/day penalty interest; hiring a local accountant (~$250–500/yr) is typically worth it.
• Crypto and real-estate gains ambiguity — Vietnam has no explicit PIT rules for crypto realisation; property sales trigger 0.1%–20% tax depending on asset type, but enforcement is patchy—don't assume it's free.

Official resources

• General Department of Taxation (Vietnam) — PIT, brackets, deductions
• Vietnam Immigration Department — Visa and tax-residency status
• IRS Form 2555 (Foreign Earned Income Exclusion) — US expat tax filing

Verify before acting. Rules change. Confirm with a qualified Vietnamese adviser before relying on any specific detail.