Personal Income Tax in Vietnam for Foreign Workers and Investors: The 2026 Rules

Residency decides what Vietnam can tax

Short answer: your residency status is the first test. Residents are taxed on income inside and outside Vietnam; non-residents are taxed only on Vietnam-source income. A foreign national may qualify as resident by being present in Vietnam for at least 183 days in a calendar year or in the 12 consecutive months from the first date of arrival; habitual residence can also make you a resident: for a foreigner, the address on a permanent residence card, the address declared when applying for a temporary residence card, or housing rented under leases totalling at least 183 days in the tax year (Decree 253/2026/ND-CP, Article 4(2)). This distinction matters because a resident who earns salary from an overseas employer may need to declare that foreign income in Vietnam, while a non-resident does not. Under Article 4(1) of Decree 253/2026/ND-CP, the day of arrival and the day of departure each count as a day of presence (entry and exit on the same day count as one), based on the immigration endorsements in your passport or travel document, so if you are near the 183-day threshold, keep arrival and departure records. Residence status turns on days of presence and place of residence; the work permit or visa category is not itself one of the tests. For the work-permit side of your position, see Vietnam work permit rules.

Reported deductions are VND 15.5m and VND 6.2m

Short answer: the reported monthly personal deduction is VND 15.5 million for the taxpayer and VND 6.2 million per dependant under the revised regime. These figures are set by Resolution 110/2025/UBTVQH15 and repeated in Article 10 of Law No. 109/2025/QH15. The personal deduction reduces the monthly taxable salary base before the progressive rates apply; each qualifying dependant adds another VND 6.2 million. A dependant is a person you are obliged to support who meets the conditions in Article 10(4) of the Law and Article 47 of Decree 253/2026/ND-CP, such as a child under 18, a disabled or studying adult child, a spouse or a parent. Adult dependants (other than children who are disabled, legally incapacitated or unable to work) need no income or an average of at most VND 3 million a month (Circular 87/2026/TT-BTC, Article 3), a spouse or other relative of working age counts only if unable to work, and each dependant must be registered with supporting documents. For a foreign worker earning a monthly gross salary, the practical effect is that the first VND 15.5 million of salary may be exempt from tax before dependant deductions. Compare this with the old thresholds, which were lower (VND 11 million a month for the taxpayer and VND 4.4 million a month per dependant); the new numbers apply from the 2026 tax period, that is, from 1 January 2026, even though the law as a whole takes effect on 1 July 2026. If you have dependants abroad, check that they meet these conditions; a foreign tax resident who lacks the standard documents needs legal documents issued by a competent authority that show the relationship and that the person qualifies as a dependant (Circular 87/2026/TT-BTC, Article 4(7)).

Salary tax reportedly moves to five brackets

Short answer: resident salary and wage income is reported to move from a seven-bracket progressive schedule to a five-bracket schedule under the revised regime. Under Article 9 of Law No. 109/2025/QH15, monthly taxable income is taxed in slices: 5% up to VND 10 million, 10% from 10 to 30 million, 20% from 30 to 60 million, 30% from 60 to 100 million and 35% above 100 million. Up to and including the 2025 tax period, Vietnam used a seven-bracket table for resident employment income; the five-bracket schedule applies from the 2026 tax period (1 January 2026) and simplifies the structure but does not necessarily reduce total tax. A resident with a monthly taxable income above the personal deduction will fall into one of the five bands, with higher rates for higher income. If you are a non-resident, this progressive schedule does not apply to you; you pay the flat rate described in the next section. For a foreign worker who has both Vietnam-source and foreign-source salary, the resident schedule applies to the worldwide amount after deductions, while the non-resident flat rate applies only to Vietnam work days. See lump-sum social insurance withdrawal for how salary tax and social insurance interact on termination.

Non-residents reportedly pay a flat 20%

Short answer: tax non-residents are reported to pay a flat 20% rate on employment income attributed to work performed in Vietnam, rather than the resident progressive schedule. This means a non-resident does not use the five-bracket table or the personal and dependant deductions. The flat 20% applies to the portion of salary earned for days worked in Vietnam; income for days worked outside Vietnam is not taxed by Vietnam for a non-resident. The reviewed material does not record whether the 20% rate also applies to non-employment Vietnam-source income such as rent or capital gains, so treat this figure as specific to employment income. You are a non-resident for tax purposes if you meet neither residency test, that is, you were present in Vietnam for fewer than 183 days (neither in a calendar year nor in the 12 months from your first arrival) and have no habitual residence there (Law No. 109/2025/QH15, Article 2(3)). The 20% is withheld by the Vietnamese employer or another payer in Vietnam when it pays you, including a Vietnamese party that reimburses a foreign entity for your salary. The payer chooses between the flat 20% and the progressive schedule by the length of your work in Vietnam stated in your contract or secondment document (Decree 253/2026/ND-CP, Articles 50(3)(c), 64 and 67(1)). If a foreign organisation that is not registered for tax in Vietnam pays you and no Vietnamese party reimburses it, you declare and pay the tax yourself (Article 67(5)). For more on how your visa status affects your tax position, see the honest visa guide for long-term renters. If you become a resident mid-year, the transition rules are not recorded in the reviewed material; ask a local tax adviser.

Mid-shift meal money has a reported cap

Short answer: from 1 July 2026, employer-provided mid-shift or lunch allowances are reported to be tax-exempt up to VND 1.2 million per employee per month.

This applies to amounts your employer pays for a meal during your shift, not to cash you receive without a meal purpose. The cap is per employee, per month, so anything above VND 1.2 million would fall into taxable income.

For foreign workers on a work permit, this affects how your employer structures your package. See vietnam-work-permit-decree-219-2025 for the rules around your employment status. Decree 253/2026/ND-CP (Article 8(2)(g)) sets no separate procedure for documenting this allowance, so ask your employer how it is recorded.

Education and healthcare costs are deductible within annual caps

Short answer: the revised Personal Income Tax Law takes effect on 1 July 2026, and its resident salary rules apply from the 2026 tax period. It introduces deductions for education, training and healthcare expenses of the taxpayer and dependants, and Decree 253/2026/ND-CP, issued on 30 June 2026, sets the caps and conditions.

The law is Law No. 109/2025/QH15. Under Article 49 of the Decree, a resident taxpayer can deduct health costs of up to VND 23 million a year in total (treatment at domestic facilities, within the list covered by health insurance) and education costs of up to VND 24 million a year in total (tuition and training at domestic institutions), for themselves and their dependants. The costs need invoices or documents showing the taxpayer's or dependant's details (health costs also need the itemised statement of medical costs prescribed by the Minister of Health) and must not be paid from other sources, such as sponsors, third parties paying on your behalf, the state budget or insurance. The Decree sets no nationality condition, so a foreign worker who is a tax resident is not excluded.

If you are budgeting around a salary and long-term rental, these deductions are capped and need receipts, so the net effect depends on what you actually spend on health and education. To claim them you finalise your tax yourself rather than through your employer (Decree 253/2026/ND-CP, Article 51(3)). For how income and payments work in practice, see banking-money-and-paying-rent-in-vietnam.

Law No. 109/2025/QH15: adoption, promulgation and scope

According to the law's text, Law No. 109/2025/QH15 on personal income tax was passed on December 10, 2025 and promulgated by President's Order No. 63/2025/L-CTN. The law covers taxpayers, taxable income, tax-exempt income, tax reductions, and the basis for calculating personal income tax. Article 2 identifies resident individuals as individuals subject to personal income tax. The document states that the 15th National Assembly enacted the law at its 10th session.

Law 09/2026/QH16 and Decree 253/2026/ND-CP

Law 09/2026/QH16 amends Vietnam's personal income tax law, as well as the value-added tax, corporate income tax and special consumption tax laws. The amendment law is dated 24 April 2026 according to the document. The underlying Personal Income Tax Law No. 109/2025/QH15 is dated 10 December 2025 according to the document and is stated to take effect on 1 July 2026, except that its rules on business and salary income of resident individuals apply from the 2026 tax period. Decree 253/2026/ND-CP was issued on 30 June 2026 and, according to the document, provides detailed rules and implementation measures for the Personal Income Tax Law.

VAT: Greenback reports 10% standard and 8% reduced rate through 31 December 2026

Greenback Tax Services reports that Vietnam's standard VAT rate is 10%. A reduced rate of 8% applies to many goods and services through 31 December 2026. Both supplied sources state that VAT applies to most goods and services consumed in Vietnam, although neither source is an official Vietnamese authority.

Foreign contractor tax: Greenback describes typically 5% CIT plus 5% VAT for certain service payments

For certain payments by a Vietnamese company to a foreign individual for services, Greenback Tax Services describes typical withholding as 5% corporate income tax plus 5% VAT. The same source states that the corporate income tax portion may be creditable on a U.S. tax return.

Rental income: Greenback's VND 100 million threshold is outdated; for residents it is VND 1 billion a year from 2026

Greenback Tax Services reports 5% VAT plus 5% personal income tax on rental revenue above VND 100 million a year, but that threshold is out of date. Since 1 January 2026, a resident individual with annual rental revenue of up to VND 1 billion owes neither VAT nor personal income tax (Decree 68/2026/ND-CP as amended by Decree 141/2026/ND-CP, under Article 7 of Law No. 109/2025/QH15 as amended by Law No. 09/2026/QH16). Above that level, personal income tax is 5% of the revenue exceeding the threshold (Article 7(4) of the Law, which does not cover accommodation services) and VAT is 5% (Circular 69/2025/TT-BTC).

Crypto: digital assets recognized from 1 January 2026; transfers taxed at 0.1% from 1 July 2026

Vietnam's Digital Technology Industry Law recognized digital assets as legal property effective 1 January 2026, according to Greenback Tax Services. Since 1 July 2026, Law No. 109/2025/QH15 has taxed personal income from transfers of digital assets, including crypto assets, at 0.1% of the transfer price (Articles 19(2) and 27(2); Decree 253/2026/ND-CP, Articles 16(4) and 62(2)).