Personal Income Tax (PIT) Finalization in Vietnam
February 2025
I. Basis of Taxation under Vietnamese Law
Key Criteria for PIT
- Tax residency status: both tax residents and tax non-residents are subject to tax
- Income: worldwide income or Vietnam-sourced income depending on the tax residency status
- Tax rate: progressive tax rates or flat tax rates depending on residency status, employment relationship and type of income
- Self-assessment: mechanism applied for tax declaration and payment
II. Taxpayers in Vietnam
Tax Residency Categories
- Tax Resident: Having income both within and outside Vietnam (worldwide income)
- Tax Non-resident: Having Vietnam-sourced income (including those not present in Vietnam)
Residency Determination
- Present in Vietnam for 183 days or more in a tax year
- Having permanent residence in Vietnam
- For less than 183 days: Residency depends on proof of tax residency in another country
III. PIT Calculation Methods
For Tax Non-residents
PIT = Assessable income × 20%
(flat rate)
Vietnam-sourced Income Determination:
If physically present in Vietnam:
Vietnam sourced income = Worldwide income × [Days in VN/365] + Vietnam source income
If not present in Vietnam:
Vietnam sourced income = Worldwide income × [VN working days/Total working days] + Vietnam source income
For Tax Residents
PIT = (Assessable income – Allowable deductions) × Progressive tax rate
Progressive Tax Rates
| Income (VND) | Rate | Calculation |
|---|---|---|
| Up to 5M | 5% | Income × 5% |
| 5M - 10M | 10% | Income × 10% - 250K |
| 10M - 18M | 15% | Income × 15% - 750K |
| 18M - 32M | 20% | Income × 20% - 1.65M |
| 32M - 52M | 25% | Income × 25% - 3.25M |
| 52M - 80M | 30% | Income × 30% - 5.85M |
| Over 80M | 35% | Income × 35% - 9.85M |
Note: M = Million, K = Thousand
IV. Allowable Deductions
Standard Deductions
- Personal Relief: VND 11,000,000/person/month
- Dependent Relief: VND 4,400,000/qualified dependent/month
- Compulsory Insurance Contributions
Compulsory Insurance Rates
| Insurance Type | Rate | Cap (VND) |
|---|---|---|
| Social Insurance | 8% | 46.8M |
| Health Insurance | 1.5% | 46.8M |
VI. Frequently Asked Questions
Common Questions
Q: What if I've been assigned overseas mid-year?
A: Special provisions apply for overseas assignments. Contact us for specific guidance.
Q: What are the risks of late filing?
A: Late filing may result in penalties and interest charges. Ensure timely submission to avoid additional costs.
Need Assistance?
Contact our tax experts for professional guidance on your PIT finalization
Email: contact@taxfinalizevn.com
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