Expats who become tax residents in Vietnam are taxed on their worldwide income, at progressive rates, and must file an annual tax return. Vietnam’s personal income tax law was rewritten in 2025, with lower brackets and higher deductions from 2026. Knowing when your tax residency starts is one of the most important parts of planning your move.
Tax residency in Vietnam
You are generally a Vietnamese tax resident if you spend 183 days or more in Vietnam in a calendar year, or in any 12-month period starting from your arrival. You can also become resident without reaching 183 days if you have a registered permanent residence here or rent a home in Vietnam for 183 days or more in the tax year, unless you can show you are tax resident in another country.
Once you are a tax resident, you are taxed on your worldwide income. If you are not a resident, you are only taxed on income from Vietnam, and employment income is taxed at a flat 20%.
Tax rules change and this page is general information, not tax advice. Talk to a qualified tax adviser about your own situation before you move.
Income Tax Rates in Vietnam (2026)
Vietnam taxes employment and business income on a progressive scale. Under the new Personal Income Tax Law (Law 109/2025), there are five monthly brackets instead of seven:
- Up to VND 10 million: 5%
- VND 10–30 million: 10%
- VND 30–60 million: 20%
- VND 60–100 million: 30%
- Over VND 100 million: 35%
Before tax is calculated, residents can deduct VND 15.5 million a month for themselves and VND 6.2 million a month for each registered dependent, plus compulsory insurance contributions.
Only the part of your income within each bracket is taxed at that bracket’s rate, so your average rate is always lower than your top rate. Investment income, such as interest and dividends, is taxed at separate flat rates.
What Changed in 2026
The new law is the biggest change to personal income tax in Vietnam in years. The main points for expats:
- Seven brackets reduced to five, so more of your income is taxed at lower rates
- Higher personal and dependent deductions
- New flat taxes on some transactions, such as transfers of digital assets
- A higher revenue threshold before household businesses pay tax
Most of the law applies from 1 July 2026, with the changes to salary and business income applying to the 2026 tax year. If you already live in Vietnam, check how the change affects your 2026 return.
Filing Taxes in Vietnam
If you are employed by a Vietnamese company, your employer usually withholds tax from your salary every month. At the end of the year, the tax is finalised either by your employer on your behalf or by you directly, for example if you have income from more than one source or from abroad.
The tax year follows the calendar year, and individual returns are generally due by the end of April of the following year. If you leave Vietnam for good, you are usually expected to finalise your tax before you go.
You will need a personal tax code, which your employer normally registers for you.
Capital Gains and Property Taxes
Vietnam does not tax most capital gains on a profit basis. Instead, many sales are taxed on the sale price:
- Shares and securities: generally 0.1% of the sale value
- Real estate: generally 2% of the transfer price
Foreigners can own apartments in approved projects, for a limited term, but most expats rent. Annual property taxes on homes are low compared with many Western countries. Rules on foreign ownership are detailed, so get legal advice before you buy.
VAT and Everyday Taxes
Vietnam’s standard VAT rate is 10%, and it is included in most prices you see. A temporary cut to 8% applies to many goods and services until the end of 2026. Essentials such as many foods, medicines and clean water are taxed at 5%, and some services, such as healthcare and education, are exempt.
Social Insurance in Vietnam
Foreigners with a work permit and a Vietnamese employment contract of 12 months or more generally have to join the social insurance system. The employee contributes around 8% of salary to social insurance and the employer around 17%, with separate health insurance contributions on top. Some intra-company transferees are exempt.
Vietnam has social security agreements with only a few countries, so contributions made here may not count towards your pension at home. Check how this affects you before you sign your contract.
Taxes for U.S. Expats in Vietnam
The United States taxes its citizens wherever they live. The U.S. and Vietnam signed a tax treaty in 2015, but it has never entered into force, so there are no treaty protections between the two countries.
Two tools usually prevent double taxation. The Foreign Earned Income Exclusion lets you exclude part of your earned income (USD 132,900 per person for 2026) if you meet the physical presence or bona fide residence test. The Foreign Tax Credit lets you offset tax paid in Vietnam against your U.S. tax. Because Vietnam’s rates are fairly high at upper income levels, the credit is often the better option.
U.S. expats must also report foreign bank accounts (FBAR) if their combined balance exceeds USD 10,000 at any point in the year, and may need to file FATCA Form 8938. Penalties for missing these can be significant.
Taxes for UK Expats in Vietnam
The UK taxes based on residence, not citizenship. Once you leave and are no longer UK resident under the Statutory Residence Test, you generally stop paying UK tax on non-UK income.
Some UK income can still be taxed in the UK, such as rental income from UK property and certain pensions. The UK and Vietnam have a double taxation agreement, which usually lets you claim credit in one country for tax paid in the other.
Before you move, review how your ISAs and investments will be treated in Vietnam, and tell HMRC you are leaving.
Taxes for Canadian Expats in Vietnam
Canadians who sever their residential ties with Canada generally stop filing Canadian returns as residents. On departure, Canada may apply a departure tax, treating certain assets as if you had sold them.
After you leave, Canadian income such as pensions, RRSP withdrawals and dividends is usually subject to non-resident withholding tax. Canada and Vietnam have a tax treaty that can reduce withholding and helps you avoid being taxed twice.
Taxes for Business Owners and Freelancers
If you run a business or work for yourself, your tax position depends on how your income is structured. A Vietnamese company pays corporate income tax (20% as the standard rate) and you are taxed separately on the salary or dividends you take out. Income from a foreign company can be taxed differently again.
Getting the structure right before you move is where early planning makes the biggest difference.
Final Thoughts on Taxes in Vietnam
Vietnam’s tax system is manageable with good planning, and the 2026 changes lower the burden for many people. The biggest challenges are usually timing your tax residency, structuring your income and keeping your home-country obligations in order. To talk it through with an experienced adviser, email us at info@xplorevietnam.org or book a consultation to learn more about our relocation services.
Frequently Asked Questions: Taxes in Vietnam
Will I pay tax in both Vietnam and my home country?
Usually not in full. Tax treaties and foreign tax credits normally prevent double taxation, although U.S. citizens have no treaty with Vietnam in force.
When do I become a tax resident in Vietnam?
Usually after 183 days in a calendar year or in the 12 months from your arrival, or earlier if you rent a home here for 183 days or more.
Do I have to file a tax return if my employer withholds tax?
Often your employer finalises your tax for you, but you must file yourself if you have other income, such as income from abroad.
What income is taxed in Vietnam?
For residents, worldwide income, including salary, business income and investment income. For non-residents, only income from Vietnam.
How much tax does a non-resident pay?
Employment income from Vietnam is generally taxed at a flat 20% for non-residents, with no deductions.
What are the biggest tax mistakes expats make?
Not tracking their days in Vietnam, not declaring income from abroad and not finalising tax before leaving.
Do I need a Vietnamese accountant?
In most cases, yes, especially if you have income from abroad, investments or a business.
Is the 8% VAT rate permanent?
No. The reduction currently runs until the end of 2026. After that, the standard 10% rate applies unless it is extended again.