Vietnam PIT for Foreigners: Worked Examples and Treaty Edges

PIT brackets explained with real numbers, FEIE positioning for Americans, and how treaty applications actually work.

Published 2026-05-17· 9 min read· Vietnam Knowledge

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:

Monthly taxable income (VND)	Rate	Quick-calc
0–5m	5%	5% of amount
5–10m	10%	0.25m + 10% over 5m
10–18m	15%	0.75m + 15% over 10m
18–32m	20%	1.95m + 20% over 18m
32–52m	25%	4.75m + 25% over 32m
52–80m	30%	9.75m + 30% over 52m
80m+	35%	18.15m + 35% over 80m

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:

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.
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.

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.

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