Personal Income Tax Consulting in Vietnam

Personal income tax is an indispensable part that employees in Vietnam must pay. With the constant changes in tax law and the complexity of regulations, calculating and paying taxes yourself can cause many difficulties. Therefore, tax consulting services were born, helping taxpayers reduce the burden. The following article of Viet An Law will help clients consult on personal income tax consulting in Vietnam to ensure clients comply with the law and optimize personal benefits.

Personal income taxpayers in Vietnam

Pursuant to Article 2 of the Law on Personal Income Tax 2007 (as amended and supplemented in 2014), the subjects who must pay personal income tax are resident individuals with taxable income arising within and outside the territory of Vietnam and non-resident individuals with taxable income arising within the territory of Vietnam. Specifically, a resident individual is a person who meets one of the following conditions:

• Being present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day of presence in Vietnam;
• Having a permanent residence in Vietnam, including a registered permanent residence or a rented house to live in Vietnam under a fixed-term rental contract.

Income subject to personal income tax under Vietnamese law

Pursuant to Article 3 of the Law on Personal Income Tax 2007 (as amended and supplemented in 2014), subjects must pay personal income tax when having the following income:

• Business income (Business income does not include income of business individuals with revenue of VND 100 million/year or less);
• Income from wages and salaries, including:
  • Salaries, wages, and amounts of the nature of salaries and wages (in cash or non-cash forms);
  • Allowances and subsidies, except for the following: allowances and subsidies for preferential treatment of meritorious people; national defense and security allowances; toxic and dangerous allowances; attraction allowances, regional allowances according to the provisions of law…
• Income from capital investment, including: Loan interest; dividend income…;
• Income from capital transfer, including: Income from transfer of capital in economic organizations; transfer of securities…
• Income from real estate transfer;
• Income from winning prizes, including: Lottery winnings; winnings from promotional activities…;
• Income from copyright, including: From transferring, transferring the right to use objects of intellectual property rights; technology transfer;
• Income from franchising;
• Income from inheritance;
• Income from receiving gifts.

How to calculate personal income tax

For resident individuals

This tax calculation formula applies to employees with labor contracts of 03 months or more.

Deductions include:

• According to Resolution 954/2020/UBTVQH14, family deductions for taxpayers applied in 2024 are 11 million/month, for dependents (registered) are 4.4 million/month;
• Insurance contributions, voluntary pension funds;
• Charitable, humanitarian, and educational contributions.

Tax rate

Personal income tax rates on income from business, salaries, and wages are applied according to the progressive tax schedule, specifically as follows:

No labor contract or labor contract under 03 months

According to Point i, Clause 1, Article 25 of Circular 111/2013/TT-BTC, individuals who do not sign a labor contract or sign a labor contract for less than 3 months but have income from salary or wages of 2 million VND or more each time must pay tax at a rate of 10%, except in cases where they make a commitment according to Form 08/CK-TNCN if eligible.

The tax payable is calculated as follows:

For non-resident individuals

Pursuant to Article 18 of Circular 111/2013/TT-BTC, personal income tax on income from salaries and wages of non-resident individuals is determined as follows:

In which, taxable income from salaries and wages of non-resident individuals is determined as for taxable income from salaries and wages of resident individuals according to the guidance in Clause 2, Article 8 of Circular 111/2013/TT-BTC.

Taxable income from capital transfer

Taxable income from capital transfer is determined by the selling price minus the purchase price and reasonable expenses related to generating income from capital transfer.

• For securities transfer activities, taxable income is determined as the transfer price each time;
• The time for determining taxable income from capital transfer is the time when the capital transfer transaction is completed according to the provisions of law.

Time to calculate personal income tax

The time to calculate personal income tax is the time of income payment.

Tax calculation method

There are 2 methods of calculating tax:

• Calculated according to the progressive table: applicable to resident individuals signing labor contracts for 3 months or more, the organization or individual paying the income shall deduct tax according to the progressive tax table, including cases where individuals sign contracts for 3 months or more in many places;
• 10% deduction applies in cases where employees do not sign a contract, or sign a contract for less than 3 months with an income payment level of VND 2,000,000/time or more;
• 20% deduction applies to non-resident individuals.

Personal income tax consulting in Vietnam of Viet An Law

With many years of experience in the field of tax consulting, Viet An Law has helped thousands of clients successfully resolve issues related to personal income tax. Together with a team of experienced experts with deep knowledge of tax law, we are committed to providing clients with the most professional, effective and dedicated personal income tax consulting services.

Viet An Law’s PIT tax services include without limitation of following tasks:

• Consulting and performing procedures for registering personal income tax codes and registering dependents;
• Consulting and supporting in declaring and finalizing personal income tax;
• Consulting on procedures and conditions for tax exemption and reduction, tax optimization;
• Consulting and adjusting errors following legal regulations on personal income tax;
• Consulting on regulations and issues related to personal income tax;
• Consulting and supporting procedures for declaring and refunding personal income tax;
• Work with or represent individuals to explain to tax authorities.

Prepared dossier

If in the year you have had many other businesses, whether at the same time or not at the same time, please contact the units that have paid your income to apply for the following documents: certificate of PIT tax withholding, income confirmation letter, dependent deduction registration information. After receiving all the above documents, you can send them to us. Viet An Tax Agent will receive the information and notify you of the results after checking the provided data. We commit to accompany and support the procedure until you complete the procedure.

For any difficulties or problems related to personal income tax consulting in Vietnam, please contact Viet An Law Firm for advice!