Yes, Vietnamese citizens are required to pay taxes based on their income. The tax system in Vietnam includes personal income tax, value-added tax, and corporate income tax, among others.
Yes, Vietnamese citizens are required to pay taxes based on their income. The tax system in Vietnam encompasses various types of taxes, including personal income tax, value-added tax (VAT), and corporate income tax.
Personal income tax (PIT) is imposed on the income of individuals, both residents and non-residents, who earn income in Vietnam. The tax rates for PIT range from 5% to 35% depending on the income levels. It is worth noting that there are also various deductions and exemptions available to taxpayers, such as for dependents or specific types of income.
Value-added tax (VAT) is a consumption tax levied on the sales of goods and services in Vietnam. The standard VAT rate is currently set at 10%, with certain goods and services subject to a 5% or 0% rate. VAT is an indirect tax that is ultimately borne by consumers but collected by businesses on behalf of the government.
Corporate income tax (CIT) is applicable to enterprises operating in Vietnam. The standard CIT rate is 20% for most businesses, with certain industries eligible for preferential rates. Additionally, there are provisions for tax incentives and exemptions for specific activities or regions, aiming to encourage investment and economic development.
A famous quote by Benjamin Franklin resonates well with the concept of paying taxes: “In this world, nothing can be said to be certain, except death and taxes.” This quote emphasizes the inevitability of taxation and its significance in the functioning of societies.
Here are some interesting facts about taxation in Vietnam:
Progressive tax rates: Vietnam follows a progressive tax system, meaning that higher-income individuals are subject to higher tax rates. This approach helps ensure a fair distribution of the tax burden.
Preferential tax rates for certain sectors: To stimulate specific industries, Vietnam offers preferential tax rates for businesses engaged in activities such as high-tech development, agriculture, and education.
Tax incentives for investments: The government provides tax incentives to attract foreign direct investment (FDI) and encourage domestic investment. These incentives include exemptions or reductions in income tax, import duties, and land use fees.
E-filing and e-invoicing: Vietnam has been implementing e-filing and e-invoicing systems to streamline tax administration and increase transparency. This digital transformation simplifies the tax reporting process for individuals and businesses.
Tax compliance initiatives: The Vietnamese government has taken measures to improve tax compliance, including strengthening tax audits, implementing stricter penalties for tax evasion, and enhancing taxpayer education and awareness.
Table: Tax Rates in Vietnam
Tax Type | Rate
Personal Income Tax | Progressive (5% to 35%)
Value-Added Tax (VAT) | Standard rate of 10%
Corporate Income Tax (CIT) | Standard rate of 20%
Please note that the table provides approximate rates and may be subject to change according to the prevailing tax regulations.
In conclusion, taxation is an essential aspect of the Vietnamese economic system, with citizens fulfilling their tax obligations based on their income. The government employs various tax types and rates to ensure fair and equitable tax collection, while also encouraging investment and economic growth through tax incentives and preferential rates for specific sectors and activities.
Watch related video
This video provides a comprehensive overview of personal income tax (PIT) in Vietnam. The speaker explains the key concepts of PIT, including tax residency status and taxable income assessment. They discuss the applicable tax rates for residents and non-residents, as well as the government’s efforts to investigate and tax individuals earning income from foreign sources. The speaker also covers deductions, withholding tax, and the process for tax finalizations. They highlight the additional benefits available to foreign individuals with a work permit and emphasize the importance of proper documentation. Finally, the speaker emphasizes the importance of planning ahead, seeking advice, and staying informed about tax regulations to navigate PIT in Vietnam effectively.
Other viewpoints exist
Individuals in Vietnam are subject to personal income tax based on their residency status.
Vietnamese residents are taxed on their worldwide income on a scale from 5% to 35%. Non-residents are taxed a flat 20% of their Vietnamese sourced income.
The monthly salary of an ex-pat is also the monthly taxable income in Vietnam. For tax residents, their monthly taxable income is taxed at a progressive rate of 5-35%; for non-tax residents, it is a fixed 20%.
Personal income tax is one of the main tax types in Vietnam. Below are tax rates that will apply to your employment income as a tax resident, and a non-tax resident in Vietnam.
Tax residents are subject to Vietnamese personal income tax (PIT) on their worldwide taxable income, wherever it is paid or received.
Tax obligations for expats include personal income tax, corporate income tax, value-added tax (VAT), and other taxes. The taxes are applied to income earned from Vietnamese sources, including wages, salaries, and business activities.
The standard CIT rate applied to enterprises in Vietnam is 20% based on assessable income. However, tax rates for oil, gas and other extractive industries might vary from 32 – 50%.
More interesting questions on the topic
How much do Vietnamese pay in taxes?
If you are a resident in Vietnam, you are liable to pay income tax on all your worldwide income, however if you are a non-resident, you only have to pay tax on income earned in Vietnam. The income tax rate for residents of Vietnam is progressive, with rates ranging from 5% to 35%. For non-residents, the rate is 20%.
Do people in Vietnam pay taxes?
Answer: Tax residents are subject to Vietnamese personal income tax (PIT) on their worldwide taxable income, wherever it is paid or received. Employment income is taxed on a progressive tax rates basis. Non-employment income is taxed at a variety of different rates.
What country citizens don’t pay taxes?
Which are the countries that don’t have taxes? At present, there are 14 tax-free countries around the world. These include Antigua and Barbuda, St. Kitts and Nevis, the United Arab Emirates, Vanuatu, Brunei, Bahrain, the Bahamas, Bermuda, the Cayman Islands, Monaco, Kuwait, Qatar, Somalia, and Western Sahara.
Does Vietnam have a high tax rate?
Answer: Vietnam personal income tax rates are progressive to 35%. Nonresidents are taxed at a flat tax rate of 20%. Nonemployment income is taxed at rates from 0.1% to 25%. All residents and non-residents are subject to Personal Income Tax in Vietnam.
Do tax residents pay taxes in Vietnam?
Tax residents are subject to PIT on their worldwide income, whereas non-tax residents are only charged on their Vietnamese-sourced income. The tax year in Vietnam is also the calendar year. Still, when an individual arrives in Vietnam for less than 183 days, his or her tax year will be 12 months from the date of arrival.
How is non-employment income taxed in Vietnam?
Employment income is taxed on a progressive tax rates basis. Non-employment income is taxed at a variety of different rates. Non-residents are subject to PIT at a flat tax rate on the income received as a result of working in Vietnam/on Vietnam-related income in the tax year, and at various other rates on their non-employment income.
Can foreign contractors avoid income tax in Vietnam?
Foreign contractors might be able to avoid income tax if it is from a country that has a DTA with Vietnam as well as does not have a PE in Vietnam. Roughly speaking, DTAs help to eliminate double taxation by providing two means: tax exemption or reduction, and foreign tax credit.
How do I credit previously paid taxes in Vietnam?
Answer will be: In order for you to rightfully credit previously paid taxes, you need to submit your duly filled-out tax exemption form, income tax return, tax vouchers, and tax receipts. Among the seventy countries who have an agreement with Vietnam are countries, Australia, Japan, Canada, and China.
How much tax do you pay in Vietnam?
Answer will be: Personal income tax in Vietnam varies based on your residency status and types of income. The important number to remember is 183 days. For tax residents, worldwide employment income (regardless of inside or outside of Vietnam) is taxed, with progressive rates from 5% to 35%.
Do non-residents get taxed in Vietnam?
Answer: As a non-resident, the only income that will get taxed are income that you earned in Vietnam. This means that income that non-residents acquired abroad will not be subject to PIT. Non-residents are subject to pay a flat rate of 20% of their personal income that is paid in Vietnam.
Does Vietnam tax goods & services?
Answer to this: With zero-rated goods and services, the Vietnam tax authority doesn’t tax its sale but allows credit for the VAT paid on inputs. As with the exempt goods and services, the government also doesn’t tax the sale of the goods and services, however, producers cannot claim a credit for the value-added tax they pay on inputs.
How do I credit previously paid taxes in Vietnam?
In order for you to rightfully credit previously paid taxes, you need to submit your duly filled-out tax exemption form, income tax return, tax vouchers, and tax receipts. Among the seventy countries who have an agreement with Vietnam are countries, Australia, Japan, Canada, and China.