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 a 12-month period from the first date of arrival; habitual residence can also be relevant. 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. Nothing in the reviewed material records how the tax authorities treat days of presence across multiple calendar years in every edge case, so if you are near the 183-day threshold, keep arrival and departure records. For foreign workers, residence status often follows the work permit and visa category; see Vietnam work permit rules. Your employer or tax agent will normally ask you to confirm your status at the start of each tax year.

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 reported from guidance and media summaries of Law No. 109/2025/QH15, not yet independently confirmed by an official English-language implementing circular as of the reviewed material. 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 typically includes a child or a spouse with no income, but the reviewed material does not record the full list of qualifying relatives under the new law. 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: nothing in the reviewed material records the exact previous figures, so treat the new numbers as the working assumption from 1 July 2026. If you have dependants abroad, check whether Vietnam recognises them for the deduction.

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. The reviewed material does not record the exact five bracket thresholds or rates, so you cannot yet compute your effective tax rate from this brief alone. Before 1 July 2026, Vietnam used a seven-bracket table for resident employment income; the reported change to five brackets 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. If you spend fewer than 183 days in Vietnam in a calendar year and do not have habitual residence there, you are likely a non-resident for tax purposes, and your employer should withhold 20% on Vietnam work days rather than applying progressive rates. 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. Nothing in the reviewed material records whether this exemption requires receipts or how employers must document the allowance.

From 1 July 2026, the rules change; details still pending

Short answer: the revised Personal Income Tax Law takes effect on 1 July 2026. It introduces deductions for certain education, training and healthcare expenses, but detailed procedures and eligibility conditions were reported as awaiting implementing guidance.

The law is Law No. 109/2025/QH15. As of the reviewed material, the exact expense categories, annual caps, and whether foreign residents can claim these deductions in the first tax year are not recorded. Employers and tax agents are waiting for the Ministry of Finance to issue the implementing circular.

If you are budgeting around a salary and long-term rental, the net effect of these new deductions is still unclear. For how income and payments work in practice, see banking-money-and-paying-rent-in-vietnam. Nothing in the reviewed material gives a timeline for the pending guidance.