To settle personal income tax for foreigners, two factors need to be considered.
firstAre they individuals residing or not residing in Vietnam?
MondayAre they citizens of a country that has signed a Double Taxation Avoidance Agreement with Vietnam?
If a foreign employee is present in Vietnam for less than 183 days, they are considered a non-resident in Vietnam. For these individuals, the organization or individual paying the income must deduct personal income tax at 20% of the total income paid to the non-resident individual for each payment.
If a foreign employee is present in Vietnam for more than 183 days, they are considered a resident in Vietnam. If they authorize the organization or individual paying their income to handle the personal income tax settlement, that organization or individual will deduct personal income tax according to the progressive tax rate schedule and settle the tax.
Related question
For foreign individuals residing in Vietnam, for example, those who first arrived in Vietnam in March 2018, when calculating personal income tax for 2018, should their income from January to February be taken into account? When calculating deductions, should it be based on 10 months or 12 months?
According to the Ho Chi Minh City Tax Department's explanation, in the case of a resident individual who is a citizen of a country or territory that has signed an Agreement with Vietnam on the avoidance of double taxation (Circular No. 205/2013/TT-BTC) on taxes levied on income, the personal income tax liability is calculated from the month of arrival in Vietnam (in the case of the individual's first presence in Vietnam) until the month the employment contract ends and the individual leaves Vietnam (calculated in full months).
Therefore, if this foreigner is a resident citizen of a country that has signed an Agreement with Vietnam, then when settling personal income tax, it will be calculated from the month of arrival in Vietnam (in the above case, from March) and the family allowance deduction will start from the month of working in Vietnam (10 months).
In the case of the foreign national mentioned above, who is a resident citizen of a country that has not signed a Double Taxation Avoidance Agreement with Vietnam, this person must consolidate their income earned abroad (in January and February) into their total income in Vietnam for tax settlement and calculation of personal deductions for 12 months.
* List of countries that have signed Double Taxation Avoidance Agreements with Vietnam:
(According to updates from the General Department of Taxation's website (http://www.gdt.gov.vn), as of May 11, 2018, Vietnam had signed double taxation avoidance agreements with 80 countries/territories worldwide.)
| STT | Country name | Date signed | Effective date |
| 01 | Australia | March 13, 1992, Hanoi | 30/12/1992 |
| 02 | French | March 10, 1993, Hanoi | 01/07/1994 |
| 03 | Thailand | March 23, 1992, Hanoi | 29/12/1992 |
| 04 | From | March 27, 1993, Hanoi | 21/3/1996 |
| 05 | Switzerland | March 24, 1994, Stockholm | 08/8/1994 |
| 06 | Korean | March 20, 1994, Hanoi | 11/9/1994 |
| 07 | British | March 09, 1994, Hanoi | 15/12/1994 |
| 08 | Singapore | March 02, 1994, Hanoi Protocol amending the Agreement: September 12, 2012, Singapore |
Contract: June 09, 1994 Investor: 11/01/2013 |
| 09 | Indian | March 07, 1994, Hanoi Protocol amending the Agreement: March 03, 2016, Hanoi |
02/02/1995 Investor(*): 21/02/2017 |
| 10 | Hungary | August 26, 1994, Budapest | 30/6/1995 |
| 11 | Poland | August 31, 1994 Warsaw | 28/01/1995 |
| 12 | Netherlands | January 24, 1995, The Hague | 22/10/1995 |
| 13 | Chinese | May 17, 1995, Beijing | 18/10/1996 |
| 14 | Denmark | May 31, 1995 Copenhagen | 24/4/1996 |
| 15 | Norway | June 1, 1995 Oslo | 14/4/1996 |
| 16 | Japanese | March 24, 1995, Hanoi | 31/12/1995 |
| 17 | Germany | March 16, 1995, Hanoi | 27/12/1996 |
| 18 | Romanian | March 08, 1995, Hanoi | 24/4/1996 |
| 19 | Malaysia | September 7, 1995, Kuala Lumpur | 13/8/1996 |
| 20 | Laos | January 14, 1996, Vientiane | 30/9/1996 |
| 21 | Belgium | March 28, 1996, Hanoi Protocol amending the Agreement: March 12, 2012, Hanoi |
Contract: June 25, 1999 Investors: Not yet effective |
| 22 | Luxembourg | March 04, 1996, Hanoi | 19/5/1998 |
| 23 | Uzbekistan | March 28, 1996, Hanoi | 16/8/1996 |
| 24 | Ukraine | March 08, 1996, Hanoi | 22/11/1996 |
| 25 | Switzerland | March 06, 1996, Hanoi | 12/10/1997 |
| 26 | Mongolia | May 9, 1996, Ulan Bator | 11/10/1996 |
| 27 | Bulgaria | March 24, 1996, Hanoi | 04/10/1996 |
| 28 | Italy | March 26, 1996, Hanoi | 20/02/1999 |
| 29 | Belarus | March 24, 1997, Hanoi | 26/12/1997 |
| 30 | Czech | May 23, 1997 Prague | 03/02/1998 |
| 31 | Canada | March 14, 1997, Hanoi | 16/12/1998 |
| 32 | Indonesia | March 22, 1997, Hanoi | 10/02/1999 |
| 33 | Taipei | March 06, 1998, Hanoi | 06/5/1998 |
| 34 | Algeria | December 6, 1999, Algiers | Not yet in effect |
| 35 | Myanmar | May 12, 2000, Yangon | 12/8/2003 |
| 36 | Finland | November 21, 2001, Helsinki | 26/12/2002 |
| 37 | Philippines | November 14, 2001, Manila | 29/9/2003 |
| 38 | Iceland | March 03, 2002, Hanoi | 27/12/2002 |
| 39 | North Korea | 03/5/2002 Pyongyang | 12/8/2007 |
| 40 | Cuba | October 29, 2002, Havana | 26/6/2003 |
| 41 | Pakistan | March 25, 2004 Islamabad | 4/2/2005 |
| 42 | Bangladesh | March 22, 2004 Dhaka | 19/8/2005 |
| 43 | Spanish | March 07, 2005, Hanoi | 22/12/2005 |
| 44 | Seychelles | March 04, 2005, Hanoi | 7/7/2006 |
| 45 | Sri Lanka | March 26, 2005, Hanoi | 28/9/2006 |
| 46 | Egypt | March 6, 2006 Cairo | Not yet in effect |
| 47 | Brunei | August 16, 2007, Banda Seri Begawan (Brunei) | 1/1/2009 |
| 48 | Ireland | March 10, 2008 Dublin | 1/1/2009 |
| 49 | Oman | March 18, 2008, Hanoi | 1/1/2009 |
| 50 | Shirt | June 2, 2008, Vien | 1/1/2010 |
| 51 | Slovakia | March 27, 2008, Hanoi | 29/7/2009 |
| 52 | Venezuela | November 20, 2008 Caracas | 26/5/2009 |
| 53 | Maroc | March 24, 2008, Hanoi | 12/9/2012 |
| 54 | Hong Kong | March 16, 2008, Hanoi Second Protocol: January 13, 2014, Hong Kong |
12/8/2009 Investor: 08/01/2015 |
| 55 | United States United Arab Emirates (UAE) |
16 / 02 / 2009 Dubai | 12/4/2010 |
| 56 | Qatar | March 8, 2009, Do Ha | 16/3/2011 |
| 57 | Kuwait | 10/3/2009 Kuwait | 11/2/2011 |
| 58 | Israel | March 04, 2009, Hanoi | 24/12/2009 |
| 59 | Saudi Arabia | April 10, 2010 Riyadh | 1/2/2011 |
| 60 | Tunisia | April 13, 2010 Tuy-nit | 6/3/2013 |
| 61 | Mozambique | March 03, 2010, Hanoi | 7/3/2011 |
| 62 | Kazakhstan | March 31, 2011, Hanoi | 18/6/2015 |
| 63 | San Marino | 14 / 02 / 2013 Roma | 13/01/2016 |
| 64 | Serbia | March 01, 2013, Hanoi | 18/10/2013 |
| 65 | New Zealand | March 05, 2013, Hanoi | 5/5/2014 |
| 66 | Palestine | March 06, 2013, Hanoi | 2/4/2014 |
| 67 | Eastern Uruguay | December 9, 2013 Montevideo | 26/7/2016 |
| 68 | Azerbaijan | March 19, 2014, Hanoi | 11/11/2014 |
| 69 | Turkey | July 8, 2014 Ankara | 9/6/2017 |
| 70 | Iran | October 14, 2014 Tehran | 26/6/2015 |
| 71 | Macedonia | October 15, 2014 Skopje | Not yet in effect |
| 72 | Portuguese | June 3, 2015, Lisbon | 9/11/2016 |
| 73 | USA | July 7, 2015 Washington | Not yet in effect |
| 74 | Estonia | September 26, 2015, New York | 14/11/2016 |
| 75 | Malta | July 15, 2016, Ulan Bator | 25/11/2016 |
| 76 | Panama | March 30, 2016, Hanoi | 14/02/2017 |
| 77 | Latvia | October 19, 2017 Riga | 6/8/2018 |
| 78 | Cambodia | March 31, 2018, Hanoi | 20/02/2019 |
| 79 | Macau | April 16, 2018, Macao | 03/10/2018 |
| 80 | Croatia | July 27, 2018 Transplant | Not yet in effect |
Important note:
The Agreement applies only to individuals who are residents of Vietnam or residents of a Contracting State with Vietnam, or who are simultaneously residents of both Vietnam and a Contracting State with Vietnam. The taxes applicable in the case of Vietnam include corporate income tax and personal income tax.
