Personal Income Tax Advisory for Resident & Non-Resident Foreigners in Vietnam

Asia Legal Group – “Stay in Vietnam to work legally & without worrying about complicated procedures.”

I. INTRODUCTION: WHY FOREIGNERS MUST UNDERSTAND PERSONAL PIT TAX REGULATIONS IN VIETNAM?

When working in Vietnam, Determine the correct status of residence or non-residence is the most important factor that directly affects:

Tax rate payable (5–35% or 20%)
Taxable income range (global or Vietnam only)
Ability to receive year-end tax refund
Right to enjoy Double Taxation Agreement (DTA)
Responsibility for declaration – time limit – penalty level

The most common mistakes made by foreign workers are:

I don't know if I'm a resident or non-resident
Didn't know I could receive a tax refund of hundreds of millions
False declaration of income from abroad
No tax code registration
Do not submit final settlement documents before leaving Vietnam
Do not update the number of days of residence according to the new passport

⇒ Everything can result fines, arrears, interest, refusal to extend visa/TRC, refusal to issue work permit.

Asia Legal Group is a unit specializing in consulting & legal representation for foreigners in Vietnam, helping to optimize tax rates, protect rights, and ensure 100% legal compliance.

II. LEGAL BASIS (UPDATED 2024–2025)

The article is based on the latest documents:

Personal Income Tax Law 2007 (amended)
Law on Tax Administration 2019
Decree 126/2020/ND-CP – guiding the Law on Tax Administration
Circular 111/2013/TT-BTC – Guidance on Personal Income Tax
Circular 92/2015/TT-BTC
Decree 125/2020/ND-CP – penalties for tax violations
More than 80 Double Taxation Avoidance Agreements (DTA) Vietnam has signed

These regulations determine the entire tax liability of foreigners in Vietnam.

III. WHAT ARE RESIDENTS & NON-RESIDENTS? – KEY POINTS IN DECIDING TAX LEVELS

1. RESIDENTS IN VIETNAM (Tax Resident)

According to Article 1 of Circular 111/2013/TT-BTC, foreigners are residence if:

(a) Present in Vietnam ≥ 183 days in 12 consecutive months

Not by calendar year.

Each entry and exit date is calculated according to the passport stamp.

(b) Have a permanent residence in Vietnam:

House rented for ≥ 183 days

EXTREMELY IMPORTANT LEGAL CONSEQUENCES:

Must declare tax according to the progressive schedule of 5% - 35%

Tax on worldwide income if incurred

Get a tax refund when overpaying

DTA applied

2. NON-RESIDENTS (Non-resident)

Is a person does not meet one of the two conditions above.

LEGAL CONSEQUENCES:

Fixed 20% tax rate

Only subject to income tax arising in Vietnam

No tax refund

Family deductions are not applicable

Only apply DTA when meeting the conditions to prove residence in another country

IV. SPECIFIC & DETAILED COMPARISON BETWEEN RESIDENTS / NON-RESIDENTS

| Content | Residence | Non-resident | | ------------------- | --------------------- | ------------ | | Tax rate | 5–35% (progressive) | 20% | | Taxable income | Global | Only in Vietnam | | Year-end settlement | Mandatory (when leaving Vietnam) | No need | | Family deduction | Yes | No | | Apply DTA | Yes | Limitations | | Tax Refund | Can | No |

PERSONAL INCOME TAX CONSULTATION FOR FOREIGNERS IN RESIDENCE / NON-RESIDENT CATEGORY

V. HOW TO DETERMINE RESIDENCE DATE – 100% ACCURATE GUIDE

The biggest mistake foreigners make:

Using the wrong number of days to track entry - leading to incorrect calculation of residence status → wrong tax rate → arrears.

Asia Legal Group uses a 4-layer examination method:

Immigration data from passport
TRC/visa
Confirmation of temporary residence from hotel/ward police
Data from the Immigration Department

This is the reason why many businesses & individuals always choose Asia Legal Group for their residency documents.

VI. TAX RATE & TAX CALCULATION FOR RESIDENTS / NON-RESIDENTS

1. Residence tax rate – Partial progressive schedule

| Tier | Income/month (VND) | Tax rate | | --- | -------------------- | --------- | | 1 | 0 – 5 million | 5% | | 2 | 5 – 10 million | 10% | | 3 | 10 – 18 million | 15% | | 4 | 18 – 32 million | 20% | | 5 | 32 – 52 million | 25% | | 6 | 52 – 80 million | 30% | | 7 | >80 million | 35% |

Included total global income if it arises.

2. Non-resident tax rate – 20% ON ENTIRE INCOME

No discounts, no incentives.

For example:

Income 100 million → Tax = 20 million (Usually higher than residency, causing great damage to foreigners if they declare their residence status incorrectly.)

VII. PROCESS OF IMPLEMENTING PITCH OBLIGATIONS FOR FOREIGNERS

Consists of 3 main stages:

1. Stage 1 – Register for a personal tax code

Profile:

Passport
Visa/TRC
Labor contract
Declaration 05-DK-TCT

Place of submission:

Tax Department where the company is headquartered Or
Regional Tax Department of residence

Processing time: 24–72 hours

2. Stage 2 – Declare & pay monthly taxes

Businesses will:

Tax deduction based on resident/non-resident status
Declare via eTax system
Submit to budget

3. Stage 3 – Personal income tax finalization at the end of the year (or when leaving Vietnam)

REQUIRED FOR FOREIGNERS:

Finish working

Change company

Change country

My visa ran out and I didn't come back

Settlement documents:

Final settlement declaration 02/QTT-TNCN

Labor contract

Income statement

Deduction documents

Tax documents from abroad (if any)

Authorization form (if the company acts on your behalf)

VIII. APPLYING DOUBLE TAXATION AGREEMENT (DTA)

Vietnam has signed DTA with more than 80 countries, including:

Japan
Han
America
EU
Singapore
Thailand
China, etc.

Benefits for foreigners:

Avoid being taxed both in Vietnam and the mother country

Deduct taxes paid abroad

Reduce or exempt some taxes

Legal tax optimization

The application for DTA is very complicated:

Tax Residency Certificate
Consular legalization
Notarized translation
Explaining multinational income

Asia Legal Group is a unit that annually handles hundreds of DTA applications for individuals and businesses.

IX. COMMON VIOLATIONS – SERIOUS WARNING

1. Self-declared residence status incorrectly → collection + penalty + interest

For example: mistakenly calculated 183 days.

2. Do not settle accounts when leaving Vietnam

→ possible Not granted TRC, not granted work permit next time.

3. Not declaring foreign income

→ Serious violation according to the Law on Tax Administration 2019.

4. Not updating new passport

→ The tax system refuses or does not accept the application.

5. The company did not deduct correctly

→ foreigners are fined on behalf of businesses.

X. PENALTIES (FOR DECREE 125/2020/ND-CP)

| Violation | Penalty level | | ----------------------------- | -------------------- | | Not declaring or declaring incorrectly taxes | 8–20 million | | Tax evasion | 1–3 times the amount of tax evasion | | Late declaration of final settlement | 2–25 million | | No authorization documents issued | 1–5 million |

XI. ACTUAL CASE STUDY HANDLED BY ASIA LEGAL GROUP

Case 1: Japanese expert - Wrong residence status → 180 million in arrears

The company calculates itself based on the "calendar year", not based on 12 consecutive months.

Asia Legal Group:

✔ Re-evaluate residence according to passport ✔ Apply Japan - Vietnam DTA ✔ Reduce tax amount from 180 million to 29 million ✔ Please refund the overpayment

Case 2: 12 Filipino engineers - No settlement when leaving Vietnam

All documents were blocked when applying for TRC to return to Vietnam.

Asia Legal Group: ✔ Complete remote settlement ✔ Submit additional documents ✔ Unlock documents → All receive TRC back normally.

Case 3: Korean CEO – Does not declare income from abroad

→ Risk of fine is 3 times higher.

Asia Legal Group: ✔ Apply for Korean residence certificate ✔ Apply Korea–VN DTA ✔ Clear all back taxes ✔ 100% compliance, no penalties.

XII. PROFESSIONAL PIT CONSULTATION SERVICES FOR FOREIGNERS – ASIA LEGAL GROUP

We provide a complete package:

Check & determine exact residency status
Declare & pay personal income tax
Tax settlement for people leaving Vietnam
Calculate the optimal tax amount
Apply multinational DTA
Legalize residence and entry documents
Work directly with the Tax Authority
Explanation, complaint, penalty cancellation
100% English - specialized for foreigners

XIII. WHY DO FOREIGNERS ALWAYS CHOOSE ASIA LEGAL GROUP?

✔ 13+ years of experience

✔ Specialized in handling tax records for foreigners ✔ Legal tax optimization ✔ Representative working with the Tax Department ✔ Fast process - no complicated paperwork ✔ Commitment to legal compliance - transparency

“Stay in Vietnam to work legally & don't worry about complicated procedures.”

XIV. CONCLUSION

Determine correctly resident/non-resident status and fulfill personal income tax obligations according to the law to help foreigners:

Significantly reduce the amount of tax payable
Get a tax refund when eligible
No collection or fines
Advantages of visa extension – TRC – work permit

Asia Legal Group always accompanies to protect your rights in Vietnam.

Source: Asia Legal Group

Phone number:028 6674 3333 - 0945 009002 (Deputy General Director)

Website:https://dinhgiaav.com/

Address: 6-8 Phan Huy Thuc, Tan Kieng Ward, District 7, Ho Chi Minh City

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