Vietnam Amends Regulations on Personal Income Tax on Foreigners

3:26:30 PM | 7/8/2005

Vietnam Amends Regulations on Personal Income Tax on Foreigners


Foreigners who have derivative incomes in Vietnam but not present in the country will be exempted from personal income taxes, according to Vietnam’s General Department of Taxation (GDT).


Derivative incomes are earnings from transfer of technologies, fees for copyrights and provision of other services.


Instead of paying personal income taxes, foreigners will have to pay taxes on contractors in Vietnam.


Vietnam collected VND3.5 trillion (US$223 million) in taxes from high-income earners last year, compared with VND2.8 trillion (US$178.34 million) in 2003. It marked the highest figure since the country applied such a tax in 1991.


Recently, the taxation department issued guidance for the application of the revised Personal Income Tax (PIT) ordinance, which was approved by the National Assembly Standing Committee on April 12 and became effective from July 1, 2004.


According to the new regulations, foreigners residing in Vietnam and Vietnamese working abroad have to pay a tax rate of 10 per cent for their monthly incomes of over VND8 million (US$509.6) to VND20 million.


The rate will increase to 20 per cent for monthly incomes of over VND20 million to VND50 million, 30 per cent for over VND50 million to VND80 million, and 40 per cent for over VND80 million.


Foreign workers working in Vietnam for less than 30 days will also have to pay a tax rate of 25 per cent if their incomes exceed VND8 million.