A foreign individual is determined to have the tax resident in Vietnam if it meets one of the following conditions:
- Have been in Vietnam for 183 days or more in one calendar year or within 12 consecutive months, counted from the first day in Vietnam. The number of days stayed in Vietnam is based on the individual passport;
- It is considered a permanent residence in Vietnam in one of these two cases: (i) Location of permanent residence registration is in Vietnam and this is stated in the registration card and permanent or temporary residence card; (ii) The residence in Vietnam is unregistered but the there was a lease of a total number of 90 days or more during the tax year.Objects of lease that are included in this case are hotels, workplaces and offices regardless if the individuals or a leasing company rent the objects.
Foreign individuals who do not fall under the conditions above are not determined to be tax resident in Vietnam. Foreigners working in Vietnam that are tax resident must pay income tax on their earned wages in Vietnam, including wages earned abroad. The amount of the tax to be paid will be determined by the tariff prescribed by the state. In addition, foreigners residing in Vietnam are entitled to family allowances that include: (i) The deduction for taxpayers is 4 million/month (48 million/year); (ii) The deduction for each dependent is 1.6 million/month If foreigners working in Vietnam but do not fulfill one of the conditions to be tax resident in Vietnam, the personal income tax on wages for them will be determined by a fixed tax rate of 20% and is thereby no progressive tariff. Accordingly, they only have to pay tax on the salaries and wages incurred in the territory of Vietnam but the income from abroad are not taxed in Vietnam.