Hiring In Vietnam: Employer and Employee Tax Responsibility

11/10/2023 11:05 AM

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In accordance with the PIT Law, Individuals employed in Vietnam, both locals and foreigners, are obligated to fulfill personal income tax (PIT) responsibilities based on their tax residency status.

Taxation is applicable to the global earnings of residents in Vietnam, as well as to income derived from sources within Vietnam for non-residents, irrespective of the geographical location of income receipt. While the method of calculating and finalizing taxes is standardized for both Vietnamese nationals and expatriates, it differs for residents and non-residents. These rates span across a range of 5% up to 35%.

Employers having employment in Vietnam are responsible for facilitating the finalization of PIT on behalf of their employees at the start of each year, pertaining to the taxable earnings accrued in the preceding year. For enterprises overseeing submissions for their workforce, the annual PIT finalization is required by the last day of the third month of the calendar or financial year.

Monthly Income	Tax Rate
Up to 5,000,000 VND	5%
5,000,001 VND - 10,000,000 VND	250,000 VND (+10% on excess)
10,000,001 VND - 18,000,000 VND	750,000 (+15% on excess)
18,00,001 VND - 32,000,000 VND	1,950,000 (+20% on excess)
32,000,001 VND - 52,000,000 VND	4,750,000 VND (+25% on excess)
52,000,001 VND - 80,000,000 VND	9,750,000 VND (+30% on excess)
80,000,001 VND & above	18,150,000 VND (+35% on excess)

Other Taxable Incomes

PIT applies to:

Income earned through business activities.
Wages received from employers.
Capital invested.
Capital transferred.
Property transferred.
Prizes received.
Royalties earned.
Income from commercial franchising.
Inheritances, including securities, capital contributions, real estate, and assets necessitating registered ownership or usage rights.
Gifts, encompassing securities, capital contributions, real estate, and assets necessitating registered ownership or usage rights.