Updated on: 2025/08/07 09:56 (UTC)
Overview
Vietnam, which officially is known as the Socialist Republic of Vietnam and whose name also is rendered as Viet Nam, is a communist country located in southeastern Asia. There are 58 provinces, or tinh, and five municipalities, or thanh pho, in Vietnam. The countries that border Vietnam are China to Vietnam’s north and Cambodia and Laos to Vietnam’s west. Additionally, the Gulf of Thailand borders Vietnam to its southwest, the South China Sea borders Vietnam to its south and east, and the Gulf of Tonkin borders Vietnam to its northeast.
Vietnam’s currency is the Vietnamese dong.
Employers in Vietnam are responsible for withholding income taxes, contributing to compulsory social tax regimes and upholding compensation and benefits regulations.
Foreign workers in Vietnam are subject to the same labor laws as Vietnam nationals, but are taxed at a flat rate instead of on a progressive scale and must obtain the proper permits to legally work in the country.
Vietnamese residents working in the United States are covered by U.S. tax law with possible work status exclusions applying. Work within the U.S. states and territories is covered by various labor laws.
CURRENCY DETAILS
The currency of Vietnam is the Vietnamese dong (₫), with the word dong pronounced in Vietnamese as “DOHNG.” The internationally recognized three-letter currency code for the Vietnamese dong is VND, which also is one of the currency’s commonly used currency symbols. The plural form of Vietnamese dong is the same as its singular form.
When an amount of Vietnamese dong is written using the currency symbol , the symbol either precedes or follows the numerical value with a space or no space between the numerical value and symbol, although the government of Vietnam prefers that the symbol follow the numerical value, with a space between the numerical value and symbol somewhat more common in Vietnamese government documents than no space between the numerical value and symbol.
When an amount of Vietnamese dong is written using the currency symbol Đ, the currency symbol D, the currency symbol đ, or the currency symbol d, the symbol follows the numerical value with a space or no space between the numerical value and symbol. The currency symbol VNĐ and its variants (VND, vnđ, and vnd) have the same placement treatment as the currency symbols Đ, D, đ, and d.
One hundredth ( 1 ⁄ 100 ) of a Vietnamese dong is referred to as a xu, which has the same plural form as its singular form, although transactions involving Vietnamese currency do not typically include amounts other than whole numbers of Vietnamese dong.
When amounts of Vietnamese dong are written in Vietnamese, the comma that in English separates the thousands place from the hundreds place instead is rendered as a dot (.).
TAXES
The federal government generally enacts laws relating to income tax and social tax. Taxes are administered by the General Department of Taxation. Employees that are Vietnam residents are taxed on their worldwide income while foreign workers are taxed only on their income accrued in Vietnam.
The tax year in Vietnam is the calendar year, Jan. 1 through Dec. 31.
Coronavirus (Covid-19) Guidance: The labor accident and occupational disease contribution rate was reduced to zero from July 1, 2021, to June 30, 2022, by Resolution No. 68/NQ-CP.
The resolution, with Decision No. 23/2021/QĐ-TTg, also allows employers to apply to suspend retirement and survivors’ fund contributions for six months from the date of application. To qualify, employers must have fully paid social taxes, or previously suspended retirement and survivors’ fund contributions, until the end of April 2021 and have the number of employees covered by social insurance decrease by 15% compared to April 2021, with employees whose contracts were suspended or who are on unpaid leave counting towards any decrease. The suspended amounts must be repaid after the suspension expires.
Employer retirement and survivors’ fund contributions were also suspended from March through December 2020. The postponement, mentioned in Official Letter No. 2533/BHXH-BT on Aug. 10, 2020, further extended a suspension that started via Directive No. 11/CT-TTg, and was slated to run through June 2020 but would be allowed to run through December if pandemic conditions still existed.
To qualify for the suspension, businesses were to operate in passenger transport, hospitality, or food and drink sectors and have temporarily laid off at least 50% of the total number of employees who had social insurance or have lost more than 50% of total assets (excluding land).
Businesses were to pay the suspended amounts after the suspension expired.
Employers that participated in unemployment insurance before Oct. 1, 2021, have their employer unemployment insurance contribution rate reduced to zero from Oct. 1, 2021, to Sept. 30, 2022, by Resolutions 116/NQ-CP and 03/2021/UBTVQH15.
Income Taxes
Coverage: A personal income taxpayer is defined as any resident individual with taxable income arising either within or outside the territory of Vietnam. Foreigners are generally deemed to be resident for tax purposes if they reside in Vietnam for an aggregate of 183 days or more within 12 consecutive months since their arrival in Vietnam or having a regular residential property that has been registered as permanent.
Employees: According to the Labor Code, an employee is a person of at least 15 years of age who is able to work and has entered into a labor contract.
Rates and Thresholds: Personal income tax rates in Vietnam vary progressively from 5% to 35% for residents depending on an individual’s level of income.
Vietnam’s personal income tax rates and minimum and maximum amounts of annual income for each tax bracket for residents are as follows:| Range of Income for Tax Year (Vietnamese Dong) | Income Tax Rate |
|---|---|
| Up to 60 million ₫ | 5% |
| More than 60 million ₫ and up to 120 million ₫ | 10% |
| More than 120 million ₫ and up to 216 million ₫ | 15% |
| More than 216 million ₫ and up to 384 million ₫ | 20% |
| More than 384 million ₫ and up to 624 million ₫ | 25% |
| More than 624 million ₫ and up to 960 million ₫ | 30% |
| More than 960 million ₫ | 35% |
Nonresidents are assessed a flat personal income tax rate of 20%.
Registration: Employers and employees must register with the General Department of Taxation within 10 days if any of the following occur: a business registration certificate, licence for establishment and operation, or investment certificate is issued; business operations are commenced in the case of organizations which are not subject to business registration, the responsibility for withholding and paying tax on behalf of other arises; a personal income tax obligation arises or a claim for tax refund is made.
Taxable Amounts: Income subject to taxation includes: salaries, wages, allowances and bonuses; income derived from scientific or technical services, technology transfer, licensing of rights to use inventions or trademarks, IT services, consultancy or training services or agency services; income from royalties; brokerage commissions and all bonuses.
Income exempt from personal income tax includes: income from foreign exchange remittances; wages paid for night shift or overtime work; health insurance contributions; retirement pensions paid by the social insurance; income from scholarships; income from indemnities paid under life insurance policies, nonlife insurance policies and compensation for labor accidents.
Withholding Methods: Income tax must be withheld from pay on a monthly basis.
Returns and Remittance: Employers are required to remit monthly deductions by the 20th of each month with Form 2-KK-TNCN for the previous month of taxable income. Employers and employees must also submit annual tax returns by March 31 of each year for the previous year of taxable income. Employers are required to carry out payment of taxes electronically.
Employee Share Plans: Vietnamese nationals working for nonresident companies are permitted to participate in employee share plans under specific regulations established by the State Bank of Vietnam.
Recordkeeping: Tax records generally must be kept for a minimum of five years.
Penalties: Penalties for not adhering to the tax laws in Vietnam can include: the deduction of money amounts from accounts of entities subject to enforcement of tax administrative decisions at the State Treasury, commercial banks or other credit institutions; request for freezing of accounts; deduction of part of salaries or incomes; confiscation of money or other assets of entities subject to enforcement of tax administrative decisions being held by other organizations or individuals; revocation of tax identification numbers; suspension of use of invoices; or revocation of business registration certificates, establishment and operation licences or practice licences.
Social Taxes
Coverage: Employers and employees must participate and contribute to the mandatory social insurance, health insurance and unemployment insurance regimes. Most employers and employees are required to contribute to the mandatory regimes. Compulsory social insurance covers the following regimes: sickness and maternity, occupational accident and disease, and retirement and survivors’ funds. These contributions are sometimes collectively called the primary social insurance tax. Voluntary social insurance, which can be used by those employees who do not qualify for the mandatory coverage, covers the retirement and survivors’ fund.
Effective for 2021, Vietnam’s retirement age for women is 55 years and four months, while its retirement age for men is 60 years and three months. Effective for 2022, Vietnam’s retirement age for women is 55 years and eight months, while its retirement age for men is 60 years and six months. Effective for 2023, Vietnam’s retirement age for women is 56 years, while its retirement age for men is 60 years and nine months. Effective for 2024, Vietnam’s retirement age for women is 56 years and four months, while its retirement age for men is 61 years. Effective for 2025, Vietnam’s retirement age for women is 56 years and eight months, while its retirement age for men is 61 years and three months. Effective for 2026, Vietnam’s retirement age for women is 57 years, while its retirement age for men is 61 years and six months. Effective for 2027, Vietnam’s retirement age for women is 57 years and four months, while its retirement age for men is 61 years and nine months. Effective for 2028, Vietnam’s retirement age for women is 57 years and eight months, while its retirement age for men is 62 years. Effective for 2029, Vietnam’s retirement age for women is 58 years, while its retirement age for men is 62 years. Effective for 2030, Vietnam’s retirement age for women is 58 years and four months, while its retirement age for men is 62 years. Effective for 2031, Vietnam’s retirement age for women is 58 years and eight months, while its retirement age for men is 62 years. Effective for 2032, Vietnam’s retirement age for women is 59 years, while its retirement age for men is 62 years. Effective for 2033, Vietnam’s retirement age for women is 59 years and four months, while its retirement age for men is 62 years. Effective for 2034, Vietnam’s retirement age for women is 59 years and eight months, while its retirement age for men is 62 years. Effective for 2035, Vietnam’s retirement age for women is 60 years, while its retirement age for men is 62 years.
Rates and Thresholds: Employers and employees are required to make monthly contributions of social taxes, which include the primary social insurance tax, unemployment insurance tax, and health insurance tax.
Each month, the maximum amount of employment income paid to an employee upon which social taxes may be assessed on the employee and employer is 20 times the applicable monthly salary.
For the primary social insurance tax and health insurance tax, the applicable monthly salary for private and public employers and employees is the monthly basic salary for government workers.
Effective since July 1, 2019, the monthly basic salary for government workers is 1.49 million ₫, so the maximum monthly amount of wages upon which the primary social insurance tax and health insurance tax could be assessed is 29.8 million ₫. Effective from July 1, 2018, to June 30, 2019, the monthly basic salary for government workers was 1.39 million ₫, so the maximum monthly amount of wages upon which the primary social insurance tax and health insurance tax could be assessed was 27.8 million ₫.
For the unemployment insurance tax, the applicable monthly salary for private and public employers and employees is the monthly general minimum wage of the applicable region, among the four regions for minimum wage enforcement, to which employee wages are attributable.
Effective for 2021, unchanged from 2020, based on the monthly minimum wages in effect for Vietnam’s four minimum wage regions, the maximum monthly amount of wages upon which the unemployment insurance tax may be assessed for Region 1 is 88.4 million ₫; Region 2, 78.4 million ₫; Region 3, 68.6 million ₫; and Region 4, 61.4 million ₫. Effective for 2019, based on the monthly minimum wages in effect for Vietnam’s four minimum wage regions, the maximum monthly amount of wages upon which the unemployment insurance tax could be assessed for Region 1 was 83.6 million ₫; Region 2, 74.2 million ₫; Region 3, 65 million ₫; and Region 4, 58.4 million ₫.
Primary social insurance tax: The primary social insurance tax rate for employers is 17.5% based on wages paid to employees and consists of three components: a retirement and survivors’ fund rate of 14%, a sickness and maternity fund rate of 3%, and a labor accident and occupational disease fund rate of 0.5%. Effective July 15, 2020, certain employers in industries with high risk of occupational accidents and diseases may apply for a lower labor accident and occupational disease fund rate of 0.3%, as provided in Decree 58/2020/NĐ-CP.
Employees are assessed a primary social insurance tax rate of 8%. As the primary social insurance tax assessed on employees solely funds retirement and survivors’ fund aspects, and not the sickness and maternity fund or the labor accident and occupational disease fund, this rate also is known as the employee’s retirement and survivors’ fund rate.
Effective until Jan. 1, 2022, the primary social insurance tax rates assessed based on employment income paid to foreign employees differ from the rates generally in effect. More information on the rates based on wages paid to foreign employees is available in the Foreign Workers section of this primer.
Health insurance tax: Employers also are assessed a health insurance tax rate of 3% of employee wages. Employees are assessed a health insurance tax rate of 1.5%. The health insurance tax is distinct and separate from the sickness and maternity fund rate of 3% assessed on employers as part of the primary social insurance tax.
Unemployment insurance tax: Employers are assessed an unemployment insurance tax rate of 1% of employee wages, and employees also are assessed an unemployment insurance tax rate of 1%.
Taxable Amounts: The types of payments that are subject to social taxes generally are the same as the types of payments subject to income taxation.
Returns and Remittance: Employers are required to deduct and pay premiums each month for social taxes from their employee’s salary and remuneration.
Recordkeeping: Employers must preserve social insurance books of laborers during their working term.
Penalties: Employers and employees breaking any of the compulsory regime laws are subject to administrative sanctions and fines. Employers failing to contribute can be subject to bank institutions or the state treasury deducting money from their deposit account to pay the amount necessary.
Other Taxes
Vietnam’s national government does not assess any taxes on employment income other than those covered in the Income Taxes and Social Taxes sections of this primer.
State/Jurisdiction Taxes
Taxes on employment income are not assessed by Vietnam’s tinh, municipalities, thanh pho, or local jurisdictions.
COMPENSATION AND BENEFITS
The Labor Code in Vietnam covers requirements regarding minimum wage, overtime, hours of work, holidays, leave, wage payment and termination pay. The Social Insurance law covers regulations for worker’s compensation and retirement plans.
The Labor Code specifies the labor standards, rights, obligations and responsibilities of employees and employers. The Labor Code was revised in 2019, effective Jan. 1, 2021, and its implementing decree took effect Feb. 1, 2021.
Minimum Wage
The monthly minimum wage in Vietnam varies by region, with each of four regions having its own minimum wage.
The assignment of parts of the country to the four regions can change when a new minimum wage decree takes effect, and the minimum wage decree in effect for a year generally indicates that year’s assignments of parts of the country to the regions.
The minimum wage decree in effect for 2021 remains unchanged from 2020 and is 90/2019/NĐ-CP.
Effective for 2021, unchanged from 2020, the monthly general minimum wage rate for Region 1 is 4.42 million ₫; Region 2, rate of 3.92 million ₫; Region 3, rate of 3.43 million ₫; and Region 4, rate of 3.07 million ₫. Effective for 2019, the monthly general minimum wage rate for Region 1 was 4.18 million ₫; Region 2, rate of 3.71 million ₫; Region 3, rate of 3.25 million ₫; and Region 4, rate of 2.92 million ₫.
Overtime
Both the employee and employer must agree on overtime, including the duration, location, and type of work.
Employees generally can work up to a maximum of four hours of overtime per day, 40 hours per month, and 200 hours per year, although in some special cases, employees in certain industries such as textiles, electronics, and clothing, with busy seasonal periods are allowed to work up to 300 hours in a year.
Employers must compensate workers according to overtime pay rates. Overtime during normal working days is paid at 150% of the normal rate, whereas those working night shift overtime must be paid at a minimum of 180%. Workers working during weekends are entitled to 200% of regular pay and on holidays employees are entitled to 300% of regular pay.
According to a representative from the Ministry of Labor, Invalids and Social Affairs, employers can calculate overtime pay by time or, in the case of employers engaged in more labor-intensive industries, production amount. Overtime pay by time can be calculated by dividing the monthly salary by the number of work days in a month, excluding holidays.
Hours of Work
Generally, normal working hours are 7:30 a.m. to 4:30 p.m. with a one-hour break for lunch between 12 a.m. and 1 p.m. Normal work hours are limited by law to not more than eight hours a day and 48 hours a week, although the government encourages employers to implement 40 hour weeks. Women who are menstruating are entitled to a 30-minute break per day at least three days a month; women who do not take advantage of those breaks may work during that time without counting that time as overtime. Workers of younger than 18 years of age and women who are over seven months pregnant or with a child of less than one year in age are granted an extra hour off a day and are not permitted to work overtime.
Working hours cannot exceed six hours in a day for those who work in jobs classified as extremely hard, harmful and dangerous by the Ministry of Labour, Invalids and Social Affairs in coordination with the Ministry of Health.
Night work includes any work completed between 10 p.m. and 6 a.m.
Holidays
Holidays in Vietnam are specified by the Labor Code. Vietnam’s public holidays for which paid leave must be granted by employers are:
- Jan. 1: New Year’s Day;
- Lunar New Year Festival, includes five days of holiday, dates vary based on the lunar calendar but generally occur in January or February;
- National Anniversary of Hung Kings, date varies, the 10th day of the third lunar calendar month;
- April 30: Victory Day, also known as Liberation Day;
- May 1: International Labor Day; and
- Sept. 2: Vietnamese National Day. Effective starting Jan. 1, 2021, employees are entitled to a second day of paid leave granted in connection with Vietnamese National Day, either Sept. 1 or Sept. 3.
The Lunar New Year Festival (Chinese New Year) is celebrated each year at a different date according to the lunar calendar.
Leave
Employees who have served at least 12 months with an employer are entitled to the following paid leave: 12 working days for employees working in normal working conditions; 14 working days for employees working in heavy, dangerous, or toxic jobs, or in places with harsh living conditions under the list issued by the Ministry of Labour, Invalids and Social Affairs in coordination with the Ministry of Health; 16 working days for employees working in extremely heavy, dangerous or toxic jobs, or to the persons working in places with extremely harsh living conditions under the list issued by the Ministry of Labour, Invalids and Social Affairs in coordination with the Ministry of Health.
For every five years of work, the number of vacation days given to an employee increases by one day.
If an employee does not take vacation days, he or she is entitled to remuneration for the days not taken.
The employer is entitled to regulate the annual leave schedule after consulting with the employees and must give notice to employees in advance.
Sick Leave: Employees working under normal conditions are entitled to 30 days of sick leave per year if they have paid social insurance premiums less than 15 years, 40 days per year if they have paid social insurance premiums for between 15 years and less than 30 years and 60 days per year if laborers have paid social insurance premiums for 30 years or more.
For employees doing heavy, hazardous or dangerous occupations or jobs; 40 days of sick leave is granted each year if they have paid social insurance premiums for less than 15 years; 50 days if they have paid social insurance premiums for between 15 years and less than 30 years, and 70 days if they have paid social insurance premiums for 30 years or more.
Child Care Leave: Employees are entitled to days off to care for sick children each year. This leave includes 20 working days at most if the sick child is under three years old, or 15 working days at most if the sick child is at least three years and under seven years old.
Maternity Leave: Female workers are entitled to six months of maternity leave (depending on type of worker) a year at full salary depending on the nature of their work. Effective starting Feb. 1, 2021, no more than two of those months may be taken as prenatal leave. In cases of multiple births, leave is extended by one month for a second child, and another month for each child thereafter. Pregnant female laborers are also entitled to take leave for five prenatal checks-up, one day for each check-up; in case they live far from medical establishments or have pathological signs or abnormal pregnancies, they are entitled to a two-day leave for each prenatal check-up. If a mother gives birth to more than one child, she is entitled to one month of extra leave per child. Those with children under 12 months of age are also entitled to an extra hour off each day for nursing.
Female employees is guaranteed her same job upon returning to work after the end of maternity leave. In the case that the old job no longer exists, the employer must arrange another job for her with a salary equal to her salary before maternity leave.
Employees adopting a child of under four months old are entitled to take leave for enjoying the maternity regime until the child is full four months old.
Additionally, female laborers after giving birth or adopting a child of under four months old are entitled to a lump-sum allowance equivalent to two months’ common minimum salary for each child.
Marriage Leave: Employers must give employees three days off when they get married and one day off when their child, sibling or parent gets married.
Bereavement Leave: Employees are entitled to three days of bereavement leave in the case of the death of their parents, wife or husband’s parents, wife, husband or child. Employees are also entitled to one day of leave for the death of a sibling or grandparent.
Wage Payment
Employers must provide a salary payment that is time-based, product-based, or is a flat sum.
Employees receiving a salary based on hourly, daily, or weekly work are to be paid by the hour, day, or week. An employee whose salary is monthly is to be paid once a month or biweekly. An employee whose salary is based on the product can be paid as agreed upon by both parties.
Salary is paid in cash or paid through the employee’s individual bank account.
Bonuses and Special Benefits
Employers are not required to provide a bonus to employees but a 13th-month bonus is customarily given as an “annual bonus” by both local and foreign companies in Vietnam to employees that have worked with the company for at least one year. Employees that have worked at a company for less than one year typically are given a bonus that is proportionally based on their actual employment period.
In addition, a Lunar New Year bonus, also known as a Tet bonus, is often paid to employees prior to their leaving for the Lunar New Year holiday. The amount of this bonus depends on both company and employee performance.
Termination Pay
If an employee is not terminated due to disciplinary measures and has worked longer than a year with an employer, an employer must pay the employee half a month’s wages plus other benefits, if any, for each year of service. Severance pay is due within seven days of the termination.
If termination occurs because of a disciplinary measure or an employee has worked with an employer less than a year, then the employee is not entitled to salary payment. Employers must give at least 120 days notice for labor contracts with an indefinite term or for a fixed-term contract of 12 months or more. For contracts of less than 12 months, employers must give notice of at least one quarter of the term of the contract.
Employees may immediately terminate an employment contract due to pregnancy, mistreatment, or if an employer fails to pay wages on time.
Workers’ Compensation
The employees participating in compulsory social insurance are entitled to enroll in the regime of occupational accident and disease in accordance with the Law on Social Insurance. The payment for this regime can be made once or every month as agreed by the parties. The employee with an occupational accident or disease and reduced working capacity from 5% or more shall be compensated by the employer in a lump-sum payment and in a monthly allowance depending on the percentage of working capacity that was decreased.
Recordkeeping
Vietnam’s compensation and benefit recordkeeping laws could not be confirmed.
FOREIGN WORKERS
Foreign workers are entitled to the same rights as Vietnamese citizens and are generally covered by the workplace laws, but foreign citizens are taxed on their income at a flat rate instead of a progressive scale.
Visas: To work in Vietnam, a foreigner have a valid passport with at least six months validity remaining. Additionally, foreign workers must apply for a Vietnamese business visa, which requires a written approval letter for a visa upon arrival in Vietnam. Visas can be obtained from a Vietnamese embassy or consulate prior to traveling to Vietnam. To obtain a written approval letter to enter, a travel agency must be contacted prior to departure, or the letter can be acquired once an employee has arrived in Vietnam if the employee already is in possession of a tourist visa.
For business visas, options for three-month and six-month multiple/single entry visas can be applied for, but employees must obtain an approval letter. Additionally, employees are required to obtain a sponsorship or invitation letter from their business partner in Vietnam. Business visas for one year can be approved with special permission.
Taxes: Foreigners are generally deemed to be nonresident for tax purposes if they reside in Vietnam for an aggregate of up to 182 days in a 12-month period since their arrival in Vietnam. Foreign workers who become residents of Vietnam for tax purposes by virtue of residing in Vietnam for at least 183 days in a 12-month period are subject to an initial tax year of the 12-month period and are required to file a tax return within 90 days from the end of the 12-month period. These workers are subject to the standard calendar-year tax year starting with the year in which the initial 12-month period ends.
Unlike residents of Vietnam, who are assessed personal income tax under Vietnam’s progressive income tax system, nonresidents are assessed a flat personal income tax rate of 20%.
Effective since Dec. 1, 2018, foreign workers are exempt from being assessed social tax contributions except for the employee health insurance tax rate of 1.5%, and employers are exempt from being assessed the retirement and survivors’ fund tax of 14% based on employment income paid to foreign workers and the unemployment tax of 1%, but are assessed the health insurance tax of 3%, the sickness and maternity fund rate of 3%, and the labor accident and occupational disease fund rate of 0.5% on wages paid to foreign workers. Effective until Dec. 1, 2018, foreign workers were exempt from being assessed social tax contributions except for the employee health insurance tax rate of 1.5%, and employers were exempt from being assessed social tax contributions based on employment income paid to foreign workers except for the health insurance tax of 3%.
Effective starting Jan. 1, 2022, foreign workers are assessed the retirement and survivors’ fund tax of 8% and the health insurance tax of 1.5% but are exempt from being assessed the unemployment tax rate of 1%, and employers are assessed based on wages paid to foreign workers the retirement and survivors’ fund tax of 14%, the health insurance tax of 3%, the sickness and maternity fund rate of 3%, and the labor accident and occupational disease fund rate of 0.5% on wages paid to foreign workers, but are exempt from being assessed the unemployment tax rate of 1%.
The government of Vietnam is not planning to extend assessment of the unemployment tax to foreign workers or to employers based on wages paid to foreign workers.
In addition to the aforementioned effective date considerations, employment income paid to a foreign worker is subject to retirement and survivors’ fund tax, sickness and maternity fund tax, and labor accident and occupational disease fund tax only if the foreign worker is working under either a contract with an unspecified term or a fixed-term contract of at least one year in duration; the foreign worker possesses a work permit, professional license, or professional certificate granted by the government of Vietnam; the foreign worker is not a qualifying intra-company transferee, and the foreign worker has not reached Vietnam’s applicable retirement age.
Employees qualify as intra-company transferees if they worked for at least 12 months as managers, executive directors, specialists, or technicians outside Vietnam before their company transferred them to Vietnam to perform operations in Vietnam for that company.
Tax payable by nonresident individuals is calculated on each occasion income arises. These tax payments are due within 10 days of the occasion in which income arises.
Before exiting Vietnam, foreigners are obligated to complete their tax payment. The immigration authority is responsible to stop the exit of any individual who fails to perform his or her obligation to complete tax payment pursuant to a notice from the tax management body.
Wages/Payments: Taxable income received in foreign currency must be converted into Vietnamese dong at the average trading exchange rate on the foreign currency market published by the State Bank as at the time the income arises. Foreign employers may base salary rates in either Vietnamese dong or U.S. dollars, but salaries that are based in U.S. dollars must be converted into Vietnamese dong.
WORKING IN THE UNITED STATES
Foreign workers from Vietnam must meet general visa requirements and be certified to be employed in the U.S. General visa requirements for the U.S. are included in the separate
U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.
For tax purposes, Vietnamese citizens are subject to U.S. employment-based taxation on income earned in the U.S. unless they work under specific visa types that exempt earnings from taxes.
State and local taxation of Vietnamese workers also can apply.
The U.S. labor laws apply to all workers employed and providing services in the country.
Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.
Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the
Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.
Income Taxes: Generally, nonresidents in the U.S. who are from Vietnam and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.
A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from Vietnam and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.
Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the
Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.
An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the
Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.
Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.
Tax treaties: Vietnam and the U.S. do not have a tax treaty.
Social taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.
Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.
Totalization Agreements: Vietnam and the U.S. have not entered into a totalization agreement.
Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.
There are no particular requirements that employees be paid in U.S. dollars.
TREATY ARRANGEMENTS
Vietnam has entered into more than 60 income tax treaties. Vietnam does not have a income tax treaty or totalization agreement with the United States.
The countries with which Vietnam has a bilateral income tax treaty in effect are Australia, Austria, Azerbaijan, Bangladesh, Belarus, Belgium, Brunei, Bulgaria, Cambodia, Canada, China, Croatia, Cuba, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Kazakhstan, Kuwait, Laos, Latvia, Luxembourg, Malaysia, Malta, Mongolia, Morocco, Mozambique, Myanmar, Netherlands, New Zealand, North Korea, Norway, Oman, Pakistan, Palestine, Panama, Philippines, Poland, Portugal, Qatar, Romania, Russia, San Marino, Saudi Arabia, Serbia, Seychelles, Singapore, Slovakia, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, Uruguay, Uzbekistan and Venezuela. Vietnam’s bilateral income tax treaties with Cambodia and Croatia generally took effect Jan. 1, 2020.
Vietnam additionally has an income tax treaty in effect with Taiwan (the Republic of China).
Vietnam also has an income tax treaty in effect with the special administrative region of Hong Kong and an income tax treaty in effect with the special administrative region of Macau.
RESOURCES
All resources are in English unless otherwise noted.
General
U.S. State Department: U.S. Relations With Vietnam
CIA World Factbook: Vietnam
Currency Details
International Organization for Standardization: Currency Codes - ISO 4217
Unicode Consortium: Currency Symbols
United Nations: United Nations Terminology Database: Vietnam
Taxes
Vietnam Ministry of Finance (Vietnamese)
Vietnam Social Security
Ho Chi Minh City Tax Department (Vietnamese)
Vietnam Law on Personal Income Tax
Vietnam Law on Social Insurance (Vietnamese)
Vietnam Law on Health Insurance (Vietnamese)
Compensation and Benefits
Vietnam Ministry of Labour, Invalids, and Social Affairs
Vietnam Labor Code (Vietnamese)
Vietnam Labor Code (Amended 2019), Effective Jan. 1, 2021 (Vietnamese)
Labor Code Implementing Decree, No. 145/2020/NĐ-CP (Vietnamese)
Foreign Workers
Embassy of the Socialist Republic of Vietnam in Washington, D.C.
Government Decree 143 of 2018 (Vietnamese)
Ministry of Labor, Invalids and Social Affairs’ Official Letter No. 1064 (Vietnamese)
Working in the United States:
U.S. Department of Labor:
- Foreign Labor Certification
- Hiring Foreign Workers
U.S. Internal Revenue Service:
- IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
- IRS Publication 15, Circular E, Employer’s Tax Guide
- IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
- IRS Publication 519, U.S. Tax Guide for Aliens
- IRS Publication 901, U.S. Tax Treaties
Treaty Arrangements