Personal Income Tax Guide for Foreign Teachers in Vietnam [2026 Updated]
Foreign teachers in Vietnam pay Personal Income Tax (PIT) at progressive rates of 5-35% if classified as tax residents (present for 183 days or more), or a flat 20% rate as non-residents on Vietnam-sourced income only. Tax residents receive monthly deductions of VND 11 million plus VND 4.4 million per dependent, while non-residents receive no deductions. Annual tax finalization deadlines are March 31 through employers or April 30 for direct filing, with penalties for late submission.
Vietnam’s educational sector continues attracting thousands of foreign teachers annually, making proper understanding of Personal Income Tax requirements essential for legal compliance and financial planning. This comprehensive guide provides foreign teachers with accurate, actionable information on PIT obligations, based on current Vietnamese tax law effective in 2026.
The information below covers tax residency determination, applicable rates, mandatory deductions, filing procedures, and common compliance issues specific to foreign educators working in Vietnam’s schools and language centers.
CRITICAL 2026 TAX UPDATES
Effective January 1, 2026, foreign teachers benefit from significantly increased tax deductions under the new Personal Income Tax Law 2025 (Law No. 109/2025/QH15, passed December 10, 2025).
Key Changes:
- Personal deduction: VND 11M → VND 15.5M per month (+41% increase)
- Dependent deduction: VND 4.4M → VND 6.2M per month (+41% increase)
- New tax threshold: Teachers without dependents now pay zero tax on salaries below ~VND 17.3M/month (previously ~VND 11M)
Timeline:
- Jan 1, 2026: New deduction rates apply to salary/wage income (retroactive for 2026 tax year)
- July 1, 2026: Full Law 2025 takes effect for all other provisions
According to Resolution 110/2025/UBTVQH15 issued by the National Assembly Standing Committee, these changes aim to offset inflation impacts and reduce tax burden on middle-income workers, including the foreign teaching workforce.
Practical Impact: A foreign teacher earning VND 30M monthly will save approximately VND 765,000 in monthly PIT compared to 2025 rates (see updated calculations below).
Quick Topic Access
What Determines Your Tax Status in Vietnam?
Your tax status determines whether you pay 5-35% progressive rates or a flat 20% rate, making the 183-day rule the most critical factor in your Vietnam tax obligations.
The 183-Day Rule Explained
Under Article 2 of the Law on Personal Income Tax and Circular 111/2013/TT-BTC, you become a tax resident if you meet either condition:
Condition 1 – Physical Presence:
- Present in Vietnam for 183 days or more within a calendar year (January 1 – December 31), OR
- Present for 183 days or more in any 12 consecutive months from your first arrival date
Condition 2 – Permanent Residence:
- Have a registered permanent residence address in Vietnam, OR
- Lease residential accommodation with a term of 183 days or more in a tax year
Tax Implications Based on Status
Tax Residents:
- Taxed on worldwide income at progressive rates (5-35%)
- Eligible for personal deduction of VND 11 million per month
- Eligible for dependent deductions of VND 4.4 million per qualified dependent per month
- Can claim foreign tax credits on overseas income
- Must file annual tax finalization
Non-Tax Residents:
- Taxed only on Vietnam-sourced income at flat 20% rate
- No personal or dependent deductions available
- Simpler tax calculation
- No annual finalization requirement (unless specific conditions apply)
Special Considerations for Teachers
Teaching contracts typically run for full academic years, automatically triggering tax resident status. Short-term teaching assignments under 183 days may qualify for non-resident treatment, but Vietnam-sourced income remains taxable at 20%.
To learn more about determining your residency status and its broader implications beyond taxation, review our detailed guide on Tax Resident vs Non-Resident in Vietnam: Essential Guide for Foreign Teachers.
What Are the Personal Income Tax Rates for Foreign Teachers?
Tax residents face progressive rates from 5% to 35% on monthly taxable income, while non-residents pay a flat 20% on all Vietnam-sourced employment income.
Progressive Tax Rates for Tax Residents
Under Article 9(2) of Personal Income Tax Law 2025 (Law No. 109/2025/QH15), effective January 1, 2026, Vietnam implements a simplified progressive tax structure reducing from 7 brackets to 5 brackets. Tax residents pay the following rates on taxable income (income after deductions):
NEW 5-Bracket Progressive Tax Rates (2026)
| Bracket | Monthly Taxable Income* | Annual Taxable Income* | Tax Rate | Key Change from 2025 |
|---|---|---|---|---|
| 1 | Up to VND 10 million | Up to VND 120 million | 5% | Doubled coverage (was 0-5M) |
| 2 | Over VND 10 – 30 million | Over VND 120 – 360 million | 10% | 3x wider (was 5-10M) |
| 3 | Over VND 30 – 60 million | Over VND 360 – 720 million | 20% | Eliminated 15% bracket |
| 4 | Over VND 60 – 100 million | Over VND 720 – 1,200 million | 30% | Eliminated 25% bracket |
| 5 | Over VND 100 million | Over VND 1,200 million | 35% | Unchanged |
*Taxable income = Gross salary – Personal deduction (VND 15.5M) – Dependent deductions (VND 6.2M each) – Insurance contributions
Major 2026 Tax Reforms – Dual Benefits:
- Increased Deductions: Personal VND 11M → 15.5M (+41%), Dependents VND 4.4M → 6.2M (+41%)
- Simplified Brackets: From 7 brackets → 5 brackets with expanded lower-rate coverage
- Eliminated Middle Brackets: 15% and 25% rates removed, replaced by 10% and 20%
Legal Basis:
- Article 9(2), Personal Income Tax Law 2025 (Law No. 109/2025/QH15)
- Article 10, Personal Income Tax Law 2025 (deduction rates)
- Resolution 110/2025/UBTVQH15 (deduction adjustment)
- Article 29 (Implementation Provisions): Applicable from tax year 2026 (January 1, 2026)
Impact: Most foreign teachers (earning VND 20-50M monthly) will face only 5% and 10% rates on the majority of their taxable income, compared to 5%, 10%, 15%, and 20% under the 2025 system.
Practical Calculation Examples (2026 Rates with NEW 5-Bracket System)
All examples below reflect the 2026 dual reforms:
- Increased deductions (VND 15.5M personal, VND 6.2M dependents)
- NEW 5-bracket progressive system (effective January 1, 2026)
Example 1: Standard Foreign Teacher (Resident, No Dependents)
Scenario: Foreign teacher earning VND 30 million monthly gross salary, tax resident status, no dependents.
Step 1 – Calculate Taxable Income:
| Component | Amount | Notes |
|---|---|---|
| Gross Salary | VND 30,000,000 | Monthly employment income |
| Less: Social Insurance (8%) | -VND 2,340,000 | Capped at 20x basic wage |
| Less: Health Insurance (1.5%) | -VND 439,500 | Capped at 20x basic wage |
| Less: Unemployment Insurance (1%) | -VND 293,000 | Capped at 20x basic wage |
| =Subtotal after insurance | VND 26,927,500 | |
| Less: Personal Deduction (2026) | -VND 15,500,000 | New rate from Jan 1, 2026 |
| =Monthly Taxable Income | VND 11,427,500 |
Step 2 – Apply Progressive Rates (NEW 5-Bracket System):
| Bracket | Taxable Amount | Rate | Tax Due | Calculation |
|---|---|---|---|---|
| Bracket 1 | VND 10,000,000 | 5% | VND 500,000 | First 10M × 5% |
| Bracket 2 | VND 1,427,500 | 10% | VND 142,750 | Remaining (10M-11.43M) × 10% |
| Total PIT | VND 642,750 |
Results:
- Total monthly tax: VND 642,750
- Effective tax rate: 2.14% of gross salary (before insurance)
- Net monthly salary: VND 26,284,750 (after insurance + tax)
2026 vs 2025 Comparison:
| Tax System | Monthly Tax | Annual Tax | Savings vs 2025 |
|---|---|---|---|
| 2025 (11M deduction, 7 brackets) | VND 1,683,075 | VND 20.2M | – |
| 2026 NEW (15.5M deduction, 5 brackets) | VND 642,750 | VND 7.7M | -VND 12.5M/year |
Breakdown of Savings:
- From increased deduction (11M→15.5M): ~VND 675,000/month
- From new bracket system (7→5 brackets): ~VND 365,000/month
- Total monthly savings: VND 1,040,325
Example 2: Teacher with Dependents (Resident)
Scenario: Foreign teacher earning VND 35 million monthly, married with 1 child (2 dependents).
Step 1 – Calculate Taxable Income:
| Component | Amount |
|---|---|
| Gross Salary | VND 35,000,000 |
| Less: Insurance (10.5% combined) | -VND 3,605,000 |
| =Subtotal | VND 31,395,000 |
| Less: Personal Deduction (2026) | -VND 15,500,000 |
| Less: Dependent #1 (Spouse) | -VND 6,200,000 |
| Less: Dependent #2 (Child) | -VND 6,200,000 |
| =Taxable Income | VND 3,495,000 |
Step 2 – Apply Progressive Rates:
| Bracket | Taxable Amount | Rate | Tax Due |
|---|---|---|---|
| Bracket 1 | VND 3,495,000 | 5% | VND 174,750 |
Results:
- Total monthly tax: VND 174,750
- Effective tax rate: 0.5% of gross salary
- Net monthly salary: VND 31,220,250
Comparison to Non-Dependent Scenario:
- Same salary without dependents: VND 1,297,500 tax
- Dependent savings: VND 1,122,750/month (VND 13.5M/year)
Example 3: High-Earning Teacher (Resident)
Scenario: Senior foreign teacher earning VND 50 million monthly, no dependents.
Step 1 – Calculate Taxable Income:
| Component | Amount |
|---|---|
| Gross Salary | VND 50,000,000 |
| Less: Insurance (~10.5%) | -VND 4,904,000 |
| =Subtotal | VND 45,096,000 |
| Less: Personal Deduction (2026) | -VND 15,500,000 |
| =Taxable Income | VND 29,596,000 |
Step 2 – Apply Progressive Rates (NEW 5-Bracket System):
| Bracket | Taxable Amount | Rate | Tax Due | Calculation |
|---|---|---|---|---|
| Bracket 1 | VND 10,000,000 | 5% | VND 500,000 | First 10M × 5% |
| Bracket 2 | VND 19,596,000 | 10% | VND 1,959,600 | (10M-29.6M) × 10% |
| Total PIT | VND 2,459,600 |
Results:
- Total monthly tax: VND 2,459,600
- Effective tax rate: 4.9% of gross salary
- Net monthly salary: VND 42,636,400
2026 vs 2025 Comparison:
| Tax System | Monthly Tax | Savings vs 2025 |
|---|---|---|
| 2025 (11M, 7 brackets) | VND 5,664,600 | – |
| 2026 NEW (15.5M, 5 brackets) | VND 2,459,600 | -VND 3.2M/month (-VND 38.5M/year) |
Why Such Large Savings?
- Under 2025 system: Income 10-18M taxed at 15%, 18-29.6M at 20%
- Under 2026 system: Income 10-29.6M all taxed at only 10%
- Eliminated 15% bracket creates massive savings for this income range
Example 4: Non-Resident Flat Rate (For Comparison)
Scenario: Non-resident teacher earning VND 30 million monthly.
Tax Calculation:
| Component | Amount | Notes |
|---|---|---|
| Gross Salary | VND 30,000,000 | No insurance deductions |
| Tax Rate | 20% | Flat rate, no deductions |
| Total PIT | VND 6,000,000 | 30M × 20% |
Results:
- Effective tax rate: 20% (flat, no deductions)
- Net monthly salary: VND 24,000,000
- Disadvantage vs resident (2026): VND 5,357,250/month less take-home
Key Insight: Article 26 of Personal Income Tax Law establishes the flat 20% rate for non-residents on Vietnam-sourced employment income, calculated on gross income without any deductions. The 2026 reforms do not change non-resident rates, making the resident vs non-resident gap even wider than before.
2026 Tax Savings Summary by Salary Level
Impact of 2026 dual reforms (deductions + brackets) across common teaching salaries:
| Monthly Gross | 2025 Tax | 2026 NEW Tax | Monthly Savings | Annual Savings | Effective Rate |
|---|---|---|---|---|---|
| VND 20M | VND 650,000 | VND 225,000 | -VND 425K | -VND 5.1M | 1.1% |
| VND 30M | VND 1,683,075 | VND 642,750 | -VND 1.04M | -VND 12.5M | 2.1% |
| VND 40M | VND 3,389,125 | VND 1,642,750 | -VND 1.75M | -VND 21M | 4.1% |
| VND 50M | VND 5,664,600 | VND 2,459,600 | -VND 3.2M | -VND 38.5M | 4.9% |
| VND 70M | VND 11,164,600 | VND 7,459,600 | -VND 3.7M | -VND 44.4M | 10.7% |
Observations:
- All salary levels benefit substantially from 2026 reforms
- VND 30-50M range (most common for foreign teachers) saves VND 12-38M annually
- Higher earners (VND 50M+) benefit most in absolute terms due to eliminated 15% and 25% brackets
- Effective tax rates drop dramatically – from 5-16% range (2025) to 1-11% range (2026)
The 2026 dual reforms (increased deductions + simplified 5-bracket system) create unprecedented tax savings for foreign teachers across all salary ranges, making Vietnam’s tax regime for residents highly competitive compared to regional alternatives.
What Deductions and Allowances Can Foreign Teachers Claim?
Tax residents can claim personal deductions of VND 11 million monthly plus VND 4.4 million per registered dependent, along with compulsory insurance contributions and specific non-taxable allowances, while non-residents receive no deductions.
Mandatory Personal Deductions for Tax Residents
Effective January 1, 2026, under Resolution 110/2025/UBTVQH15 and Article 10 of Personal Income Tax Law 2025 (Law No. 109/2025/QH15):
Personal Allowance:
- VND 15.5 million per month (VND 186 million per year)
- Increase of VND 4.5M/month from previous VND 11M rate
- Automatically granted to all tax residents
- No registration required
Dependent Allowance:
- VND 6.2 million per month per qualified dependent (VND 74.4 million per year)
- Increase of VND 1.8M/month from previous VND 4.4M rate
- Requires registration with tax authorities
- Supporting documentation mandatory
2026 vs. Previous Deduction Comparison
| Deduction Type | Before 2026 | From Jan 1, 2026 | Increase |
|---|---|---|---|
| Personal | VND 11M/month | VND 15.5M/month | +41% (VND 4.5M) |
| Per Dependent | VND 4.4M/month | VND 6.2M/month | +41% (VND 1.8M) |
| Annual Personal | VND 132M/year | VND 186M/year | +VND 54M |
| Annual Per Dependent | VND 52.8M/year | VND 74.4M/year | +VND 21.6M |
New Tax Threshold by Family Status (2026)
The increased deductions raise the minimum taxable income threshold significantly:
| Family Status | Gross Salary Threshold* | Previous Threshold | Increase |
|---|---|---|---|
| No dependents | ~VND 17.3M/month | ~VND 11M/month | +57% |
| 1 dependent | ~VND 24.2M/month | ~VND 15.4M/month | +57% |
| 2 dependents | ~VND 31.2M/month | ~VND 19.8M/month | +58% |
| 3 dependents | ~VND 38.1M/month | ~VND 24.2M/month | +57% |
*Threshold includes compulsory insurance contributions (10.5% of gross salary for employees)
Legislative Timeline
Resolution 110/2025/UBTVQH15 (December 10, 2025):
- Temporarily adjusted deduction rates for 2026 tax year
- Effective: January 1, 2026 for salary/wage income
Personal Income Tax Law 2025 (Law No. 109/2025/QH15):
- Permanently incorporates new deduction rates into Article 10
- Full effect: July 1, 2026
- Retroactive application: Salary/wage income from Jan 1, 2026 (tax year 2026)
According to Article 10 of Law 2025, these deduction amounts apply uniformly to all tax residents with salary/wage income, regardless of nationality, making foreign teachers eligible for the same benefits as Vietnamese nationals.
Qualifying Dependents
Under Circular 111/2013/TT-BTC, dependents must meet specific criteria:
Children:
- Under 18 years old, OR
- Over 18 but unable to work due to disability, OR
- Currently studying full-time at university/college (documentation required)
Parents and Relatives:
- Parents, parents-in-law, step-parents
- Must be 60+ years old (men) or 55+ years old (women)
- Without pension or other regular income
- Maximum one registration per dependent across all taxpayers
Compulsory Insurance Contributions
According to Decree 143/2018/ND-CP, foreign employees on contracts of 12 months or more must contribute to:
| Insurance Type | Employee Contribution | Maximum Cap |
|---|---|---|
| Social Insurance (SI) | 8% of salary | 20x basic wage (VND 2,340,000) |
| Health Insurance (HI) | 1.5% of salary | 20x basic wage |
| Unemployment Insurance (UI) | Exempt for foreigners | N/A |
These contributions are deductible from gross salary before PIT calculation.
Non-Taxable Benefits for Foreign Teachers
Article 2 of Circular 111/2013/TT-BTC specifies certain benefits exempt from PIT when provided by employers with proper documentation:
Relocation and Settlement:
- One-time relocation allowance (with invoices)
- Cost of shipping personal belongings (documented)
Education:
- Children’s school fees in Vietnam (kindergarten through high school)
- Payment must be direct from employer to school
- University fees not included
Travel:
- One annual round-trip ticket to home country per employee
- Must have supporting flight documents
- Additional trips are taxable
Insurance:
- Life insurance premiums without accumulated value
- Health insurance (beyond compulsory contribution)
- Voluntary pension contributions (subject to caps)
Work-Related:
- Business trip allowances (per government rates)
- Phone allowances (capped at VND 730,000/month cash equivalent)
- Uniform allowances (capped at VND 5,000,000/year)
- Transport allowance for home-to-workplace commute
Documentation Required: All non-taxable benefits require supporting invoices, contracts, or payment receipts. Without proper documentation, these benefits become taxable income.
How Do You Register for a Tax Code in Vietnam?
Foreign teachers must obtain a 10-digit Tax Identification Number (TIN) through their employer or directly at the local tax office within prescribed timeframes from first earning taxable income in Vietnam.
Who Needs a Tax Code?
Under Circular 86/2024/TT-BTC (effective February 6, 2025), all foreign individuals earning taxable income in Vietnam must register for a personal tax code, including:
- Foreign teachers on employment contracts
- Part-time instructors with multiple income sources
- Educational consultants providing services to Vietnamese entities
- Any foreigner receiving Vietnam-sourced income subject to PIT
Registration Methods
Method 1 – Through Employer (Most Common): Your school or language center handles registration on your behalf.
Process:
- Provide required documents to HR department
- Employer submits Form 05-ĐK-TCT to local tax office
- Tax office issues TIN within 3 working days
- Employer notifies you of your TIN
Required Documents:
- Valid passport (certified copy)
- Work permit or work permit exemption certificate
- Labor contract
- Completed registration form
Method 2 – Direct Registration at Tax Office: For self-employed teachers or multiple income sources.
Process:
- Prepare complete dossier
- Submit to tax office in district where work is performed
- Receive TIN within 3 working days
- Use TIN for all future tax declarations
Method 3 – Online Registration: Available through General Department of Taxation e-portal (https://etaxvn.gdt.gov.vn).
Requirements:
- Digital signature or electronic identification
- Scanned copies of all required documents
- Completed online forms
Important Update from July 1, 2025
Vietnamese citizens now use their 12-digit national ID numbers as tax codes, but foreign nationals continue using separate 10-digit tax codes. This distinction remains permanent for foreign workers in Vietnam.
Registration Deadline and Penalties
According to the Law on Tax Administration, registration must be completed within prescribed time from first taxable income arising. Late registration results in administrative penalties ranging from VND 2 million to VND 5 million under Decree 125/2020/ND-CP.
For comprehensive banking needs while managing your tax obligations in Vietnam, explore our guide on International Banks in Vietnam: HSBC, ANZ, Citibank Guide to find the right financial partner for your situation.
When and How Do You File Tax Returns?
Foreign teachers under employment contracts have taxes withheld monthly by employers with annual finalization deadlines of March 31 (employer filing) or April 30 (direct filing), while those leaving Vietnam must finalize within 45 days of departure.
Monthly Tax Withholding Process
Under Article 25 of Circular 111/2013/TT-BTC, Vietnamese employers must:
Employer Responsibilities:
- Calculate PIT on monthly salary and benefits
- Withhold tax before payment to employee
- Remit withheld amounts to State Treasury by 20th of following month
- Provide monthly payslips showing gross salary, deductions, PIT withheld, and net salary
- Issue annual PIT withholding certificates (Form 11-TNCN)
Employee Monitoring:
- Review monthly payslips for accuracy
- Verify correct application of deductions
- Keep records of all income and withholding certificates
- Report discrepancies to employer immediately
Annual Tax Finalization Requirements
Tax finalization reconciles total annual income with total PIT paid, resulting in either refund or additional payment.
Who Must Finalize:
Mandatory Finalization:
- Tax residents with income from multiple sources
- Teachers receiving overseas income while residing in Vietnam
- Those claiming tax refunds
- Those with tax liabilities to settle
Optional Finalization:
- Single employer with complete withholding
- Simple tax situation with no additional obligations
Filing Deadlines by Method:
| Filing Method | Deadline | Form Used |
|---|---|---|
| Through Employer Authorization | March 31 following tax year | Form 02/QTT-TNCN |
| Direct Filing with Tax Office | April 30 following tax year | Form 02/QTT-TNCN |
| Exit Finalization (Departure) | 45 days from departure date | Form 02/QTT-TNCN |
Required Documents for Annual Finalization
According to Article 7 of Circular 105/2020/TT-BTC:
Standard Documents:
- Tax finalization declaration (Form 02/QTT-TNCN)
- Annual PIT withholding certificates from all income sources
- Dependent registration documentation (if claiming)
- Foreign tax credit documentation (if applicable)
- Certificate of Tax Residency from home country (for DTA claims)
Supporting Evidence:
- Contracts from all employers
- Bank statements showing income receipts
- Insurance premium payment receipts
- Charitable donation receipts (if claiming deductions)
Exit Tax Finalization for Departing Teachers
Circular 92/2015/TT-BTC Article 21 requires tax residents terminating employment to finalize before departure.
Critical Timeline:
- Notify employer of departure date
- Complete finalization within 45 days of departure
- Settle any outstanding tax liability before leaving
- Obtain tax clearance confirmation
Authorization Option: Teachers can authorize their former employer or representative to handle exit finalization after departure, using Power of Attorney (Form 08/UQ-QTT-TNCN).
Consequences of Non-Compliance:
- Penalties up to VND 25 million for declarations over 90 days late
- Potential issues with future Vietnam visa applications
- Complications claiming foreign tax credits in home country
- Interest charges on unpaid tax liabilities
Quarterly Filing Alternative
Teachers with income from multiple employers or foreign entities can opt for quarterly tax declarations instead of monthly, with deadline of the last day of the first month following each quarter.
Important: 2026 Tax Year Transition
Dual Regulatory Framework for 2026
Vietnam’s tax year 2026 operates under two different legal frameworks due to the transition to Personal Income Tax Law 2025:
Period 1: January 1 – June 30, 2026
- Governing Laws:
- Personal Income Tax Law 2007 (base law)
- 2012 Amendments
- 2014 Tax Law Amendments
- Resolution 110/2025/UBTVQH15 (deduction rate adjustment)
- Deduction Rates: New rates (VND 15.5M personal, VND 6.2M dependent) apply despite old law framework
- Special Note: Income from salary/wages uses updated deduction rates retroactively from January 1, 2026
Period 2: July 1 – December 31, 2026
- Governing Law: Personal Income Tax Law 2025 (Law No. 109/2025/QH15)
- Full Implementation: All provisions of new law in effect
- Continuity: Deduction rates remain VND 15.5M/VND 6.2M (no mid-year change)
Tax Finalization Impact
For 2026 Tax Year Finalization (filed by March/April 2027):
- Use VND 15.5M personal deduction for all 12 months of 2026
- Use VND 6.2M dependent deduction for all 12 months of 2026
- Apply to total annual income regardless of which legal framework applied when income was earned
- Progressive tax rates remain unchanged (5-35% brackets identical)
Critical: The new deduction rates apply to the entire 2026 tax year, not just the period after July 1, 2026. Employers should adjust withholding from January payroll to avoid employee overpayment and subsequent refund claims.
Employer Withholding Responsibilities
According to Circular 111/2013/TT-BTC (remains valid through transition), employers must:
From January 2026 Payroll:
- Update payroll systems to VND 15.5M personal deduction
- Update dependent deductions to VND 6.2M per person
- Recalculate monthly PIT withholding using new rates
- Issue updated payslips reflecting reduced withholding
- Notify employees of changes in writing
Avoid: Some employers may continue using old rates (VND 11M/VND 4.4M) pending updated software or confusion about effective dates. Foreign teachers should verify January 2026 payslips show correct deductions.
What to Do If Employer Uses Wrong Rates
If your employer withholds PIT using old deduction rates (VND 11M/4.4M) in January-June 2026:
Option 1 – Request Correction (Preferred):
- Provide employer written notice citing Resolution 110/2025/UBTVQH15
- Request retroactive correction and amended tax remittance
- Receive corrected payslips and refund of excess withholding
Option 2 – Annual Finalization Refund:
- Allow employer to continue incorrect withholding temporarily
- File annual tax finalization by April 30, 2027
- Claim refund of overpaid PIT for entire 2026
- Refund processing typically takes 3-6 months
According to the Law on Tax Administration, taxpayers have the right to demand corrections of errors within prescribed timeframes, and employers bear responsibility for accurate withholding calculations.
What Are Common Tax Mistakes Foreign Teachers Make?
The most common errors include misclassifying income types (employment vs. service contracts), missing DTA application deadlines, and failing to register dependents, leading to overpayment, penalties, or double taxation.
Income Classification Errors
Under Circular 111/2013/TT-BTC, different income types face different tax treatment.
Employment Income (Labor Contract):
- Progressive tax rates 5-35% for residents
- Eligible for personal and dependent deductions
- Employer withholding at source
- Example: Full-time teacher on annual contract
Service/Business Income (Service Contract):
- 10% withholding for contracts under 3 months
- Included in annual finalization at progressive rates
- No automatic deductions
- Example: Part-time workshop facilitator
Common Mistake: Teachers sign service contracts but expect employment contract tax treatment, leading to incorrect withholding and potential penalties during finalization.
Double Taxation Agreement (DTA) Application Failures
Vietnam maintains DTAs with over 80 countries to prevent double taxation, but benefits require proactive application.
Most Frequent DTA Mistakes:
Missing Application Deadline:
- DTA benefits must be claimed 15 days before tax payment deadline (Circular 80/2021/TT-BTC Article 19)
- Late applications possible within 3 years but involve lengthy refund procedures
- Many teachers pay full Vietnamese tax without claiming available exemptions
Incomplete Documentation:
- Certificate of Tax Residency from home country’s tax authority (mandatory)
- Proof of foreign taxes paid on same income
- Employment contract details
- Missing any document invalidates entire application
Misunderstanding Coverage: Some DTAs provide specific exemptions for teachers and professors under certain conditions (typically short-term assignments), but requirements vary by treaty.
Dependent Registration Oversights
The VND 4.4 million monthly deduction per dependent requires proper registration.
Common Registration Errors:
- Not registering dependents at start of employment (cannot backdate)
- Insufficient documentation for dependent qualification
- Both spouses claiming same dependent (only one allowed)
- Not updating when dependent status changes
Proper Registration Process:
- Complete Form 02-1/BK-QTT-TNCN (Dependent Registration)
- Submit to employer within tax registration timeframe
- Provide birth certificates, school enrollment letters, or disability certificates
- Update annually or when circumstances change
Foreign Currency Exchange Rate Mistakes
Article 13 of Circular 92/2015/TT-BTC specifies exact exchange rate requirements.
Correct Procedure:
- Teachers receiving foreign currency salary must convert using actual buying rate of their Vietnamese bank account
- If no Vietnamese bank account, use Vietcombank buying rate
- Apply rate at time income arose (not payment date)
- Cannot choose most favorable rate
Common Error: Using average monthly rates or year-end rates instead of actual transaction-date rates, resulting in incorrect tax calculations.
Exit Finalization Neglect
Foreign teachers leaving Vietnam often overlook the 45-day exit finalization requirement.
Consequences of Non-Compliance:
- Administrative penalties from VND 2 million to VND 25 million
- Delayed tax refunds (if entitled)
- Complications with future Vietnam employment
- Issues obtaining tax payment confirmation for home country
Solution: Plan departure timing to allow finalization completion, or execute proper Power of Attorney for authorized representative.
How Do Double Tax Agreements Benefit Foreign Teachers?
Double Tax Agreements (DTAs) between Vietnam and over 80 countries allow foreign teachers to claim credits for taxes paid in one country against obligations in another, preventing taxation of the same income twice and reducing overall tax burden through reduced rates or exemptions on specific income types.
Understanding Vietnam’s DTA Network
Vietnam’s DTAs follow OECD model conventions, providing standardized approaches to allocating taxing rights between countries.
Coverage Includes:
- United States
- United Kingdom
- Canada
- Australia
- European Union countries (most)
- Asian countries (most)
- Over 80 bilateral agreements total
Key DTA Benefits for Teachers
Reduced Withholding Rates: Some DTAs reduce Vietnam’s standard 20% non-resident rate for qualifying individuals under short-term assignments.
Foreign Tax Credit Method: Tax residents of Vietnam can credit foreign taxes paid on overseas income against Vietnamese tax liability on that same income, limited to the lower of:
- Actual foreign tax paid, OR
- Vietnamese tax applicable to that foreign income
Exemption Method: Certain DTAs completely exempt specific income from Vietnamese taxation if already taxed in the source country.
Special Teacher/Professor Provisions: Some DTAs (varies by country) provide temporary exemptions for educators, typically requiring:
- Assignment duration under 2 years
- Primary purpose of teaching or research
- Payment by educational institution or government
- Specific DTA language allowing exemption
DTA Application Process
According to Circular 80/2021/TT-BTC Article 19, claiming DTA benefits requires:
Step 1 – Prepare Documentation:
- Certificate of Tax Residency from home country tax authority (critical document)
- Employment contract showing assignment terms
- Documentation of foreign taxes paid (tax returns, payment receipts)
- Completed DTA benefit application form
Step 2 – Submit Application:
- Timeline: 15 days before scheduled tax payment deadline
- Submission to: Tax office managing taxpayer
- Through: Either directly or via employer
Step 3 – Annual Submission: Within 15 days before completing work in Vietnam or year-end (whichever comes first), submit updated Certificate of Tax Residency for that tax year.
Step 4 – Ongoing Compliance: Maintain all documentation for minimum 5 years per Tax Administration Law requirements.
Retroactive Claims
Teachers who already paid full Vietnamese tax can claim DTA refunds retroactively within 3 years from original payment due date. However, refund procedures are time-consuming (typically 6-12 months) and complex.
Common DTA Application Pitfalls
Permanent Establishment Issues: Teachers must ensure their employer does not have a Permanent Establishment (PE) in Vietnam, which could invalidate DTA protection. PE typically exists when:
- Employer maintains fixed office in Vietnam
- Teacher has authority to sign contracts for employer
- Services extend beyond 183 days threshold
Beneficial Owner Requirements: Vietnamese tax authorities apply substance-over-form analysis. Teachers must demonstrate they are the beneficial owner of income, not merely a conduit.
Treaty Shopping Prevention: Artificial arrangements designed primarily to access DTA benefits face denial under anti-abuse provisions.
What Happens If You Don’t Comply with Tax Obligations?
Non-compliance with Personal Income Tax obligations results in administrative penalties ranging from VND 2 million to VND 25 million for late declarations, plus daily interest charges of 0.03% on unpaid tax amounts, potential visa complications, and criminal prosecution for serious evasion exceeding VND 300 million.
Administrative Penalties Structure
According to Decree 125/2020/ND-CP on penalties for tax administration violations:
Late Tax Declaration:
- 1-30 days late: VND 2,000,000
- 31-60 days late: VND 5,000,000
- 61-90 days late: VND 8,000,000
- Over 90 days late: VND 25,000,000
Late Tax Payment:
- Daily interest: 0.03% per day on outstanding amount (approximately 11% annually)
- Calculated from deadline until actual payment date
- Interest cannot be waived even with valid reasons for delay
Non-Registration or False Information:
- Failing to register for tax code: VND 2,000,000 to VND 5,000,000
- Providing false information on tax declarations: VND 5,000,000 to VND 10,000,000
- Using another person’s tax code: VND 10,000,000 to VND 20,000,000
Tax Evasion Criminal Liability
Under Article 200 of the Criminal Code, deliberate tax evasion becomes a criminal offense when:
Threshold for Prosecution:
- Evaded tax amount exceeds VND 300 million (approximately USD 12,500)
- Evidence of intentional fraud or willful non-compliance
- Repeated violations despite administrative penalties
Criminal Penalties:
- Fine from VND 50 million to VND 500 million
- Prison sentences from 6 months to 20 years (depending on amount)
- Ban from certain professions
- Confiscation of property (severe cases)
Immigration and Visa Consequences
While tax authorities and immigration officials have limited systematic communication, tax non-compliance can impact:
- Work Permit Renewal: Some provinces require tax clearance certificates for work permit renewals, though enforcement varies.
- Visa Extensions: Outstanding tax liabilities may complicate visa extension applications, particularly for business visas or residence cards.
- Future Employment: New employers conducting background checks may discover tax non-compliance records, affecting hiring decisions.
- Exit Procedures: Tax clearance increasingly required at departure, especially for those on long-term contracts. Tax authorities can request settlement of outstanding liabilities before departure.
Audit Triggers and Tax Authority Powers
Tax authorities may initiate audits based on:
Red Flags:
- Income inconsistent with lifestyle indicators
- Missing tax finalization multiple consecutive years
- Income from multiple sources without proper declarations
- Reports from third parties (employers, banks)
- Random selection for compliance verification
Tax Authority Powers: Under the Law on Tax Administration, officials can:
- Examine accounting books and financial records
- Request bank account information
- Interview employers and third parties
- Access immigration records for presence verification
- Impose estimated taxes when proper records unavailable
Voluntary Disclosure and Penalty Mitigation
Article 55 of the Law on Tax Administration provides reduced penalties for:
Self-Correction Before Discovery:
- Voluntary disclosure of errors before tax audit notice: 50% penalty reduction
- Full cooperation during audit process: Consideration for penalty mitigation
- First-time minor violations: Potential warning without monetary penalty
Proper Procedure:
- Prepare amended declaration with corrected information
- Calculate and pay outstanding tax plus late payment interest
- Submit amended declaration with explanation letter
- Pay reduced penalty (if applicable)
Protection Against Unreasonable Penalties
Taxpayers have rights under Articles 7-10 of the Law on Tax Administration:
Right to Explanation: Tax authorities must explain penalty basis, legal grounds, and calculation method in writing.
Administrative Appeal:
- First level: To superior tax office within 90 days of penalty decision
- Second level: To General Department of Taxation
- Final: Administrative court
Statute of Limitations: Tax authorities can assess taxes and impose penalties within:
- 10 years for tax evasion cases
- 5 years for other tax violations
- From date of violation or deadline for obligation fulfillment
Frequently Asked Questions
Can I work for multiple schools and how does that affect my taxes?
Yes, foreign teachers can work for multiple schools, but income from all sources must be declared for annual tax finalization. Each school withholds PIT separately based only on salary paid by that school, potentially resulting in under-withholding since progressive rates apply to combined income. Tax residents must file direct annual finalization (deadline April 30) to reconcile total income across all employers and pay any shortfall, as schools cannot handle finalization for multi-employer situations.
How do the 2026 tax changes affect my monthly take-home pay?
The increased deductions from January 1, 2026 result in immediate higher take-home pay for tax resident teachers. Monthly PIT savings range from VND 225,000 to VND 1,575,000 depending on your gross salary and dependent count.
Salary Impact Examples (No Dependents):
| Monthly Gross Salary | 2025 Monthly PIT | 2026 Monthly PIT | Monthly Savings | Annual Savings |
|---|---|---|---|---|
| VND 20M | VND 550,000 | VND 138,750 | VND 411,250 | ~VND 4.9M |
| VND 30M | VND 1,739,125 | VND 964,125 | VND 775,000 | ~VND 9.3M |
| VND 40M | VND 3,239,125 | VND 2,464,125 | VND 775,000 | ~VND 9.3M |
| VND 50M | VND 4,989,125 | VND 4,214,125 | VND 775,000 | ~VND 9.3M |
Key Observations:
- Maximum monthly PIT savings: ~VND 775,000 (once personal deduction fully utilized)
- Percentage savings decreases at higher incomes (absolute savings remains constant)
- Teachers earning under VND 17.3M pay zero PIT from 2026 (previously paid tax above VND 11M)
With Dependents: Each registered dependent adds VND 1.8M to your monthly deduction, saving approximately VND 270,000 in monthly PIT per dependent at the 15% bracket, or up to VND 630,000/dependent at the 35% bracket.
According to calculations based on progressive tax brackets in Article 22 of the Personal Income Tax Law, the new deductions provide proportionally greater relief to teachers in the VND 15-35M salary range (10-20% tax brackets).
Do I need to re-register my dependents for the new 2026 rates?
No re-registration required if you already have approved dependent registrations. The increased deduction amount (VND 4.4M → VND 6.2M per month) applies automatically to all existing registered dependents from January 1, 2026.
Action Required: None for existing dependents with approved status
Employer Responsibility: Update payroll systems to apply VND 6.2M per dependent
New Dependent Registration: If registering dependents for the first time in 2026, follow standard procedures using Form 02-1/BK-QTT-TNCN with supporting documentation (birth certificates, school enrollment, disability certificates, or parent age/income verification).
Important Verification: Check your January 2026 payslip to confirm dependent deductions show VND 6.2M per person, not the old VND 4.4M rate. If incorrect, notify your employer immediately citing Resolution 110/2025/UBTVQH15.
What if I started working in Vietnam in mid-2025 and haven’t reached 183 days yet?
The 2026 deduction rate changes do not affect residency determination, only the deduction amounts available once you qualify as a tax resident.
Residency Status Determination (unchanged):
- Track your cumulative presence from first arrival date
- Become tax resident upon reaching 183 days in calendar year OR any 12 consecutive months
- Leasing accommodation for 183+ days also triggers tax resident status
Tax Treatment by Scenario:
Scenario A: Arrived December 2025, reach 183 days in May 2026
- Before 183 days: Non-resident, 20% flat rate on Vietnam income
- After 183 days (May 2026): Resident status, progressive rates with VND 15.5M personal deduction apply
- Annual finalization (April 2027): Recalculate entire 2026 using resident rates and new deductions; claim refund of excess withholding
Scenario B: Arrived September 2025, reach 183 days in February 2026
- January 2026: Final month as non-resident (20% rate)
- February 2026 onward: Tax resident with VND 15.5M deduction (not VND 11M)
- Annual finalization applies new deduction rates to all months with resident status
According to Article 2 of Circular 111/2013/TT-BTC, residency status changes retroactively to the beginning of the calendar year for annual finalization purposes, meaning you’ll benefit from the increased deductions for the entire portion of 2026 where you qualify as a resident.
Can I claim a refund if my employer withheld tax using old 2025 rates in early 2026?
Yes, you are legally entitled to a refund of excess PIT withheld using outdated deduction rates (VND 11M personal / VND 4.4M dependent) for any salary payments in calendar year 2026.
Refund Method 1 – Employer Correction (Fastest):
Timeline: Request immediately upon discovering error
Process:
- Provide written notice to employer citing Resolution 110/2025/UBTVQH15
- Employer files amended monthly tax declarations (Form 05-KK-TNCN) for affected months
- Employer refunds excess withholding directly to you or credits against future withholding
- Typical resolution: 30-60 days
Required: Document showing legal requirement (copy of Resolution 110/2025/UBTVQH15)
Refund Method 2 – Annual Tax Finalization (Guaranteed):
Timeline: File by April 30, 2027 for 2026 tax year
Process:
- Complete Form 02/QTT-TNCN showing actual income and correct deductions
- Calculate proper PIT liability using VND 15.5M/6.2M rates
- Submit to tax office with all withholding certificates
- Tax office processes refund (typically 3-6 months)
Refund Amount Example:
- Teacher with VND 30M salary, no dependents
- Employer incorrectly withheld VND 1,739,125/month (using VND 11M deduction) for January-March 2026
- Correct withholding should be VND 964,125/month (using VND 15.5M deduction)
- Monthly overpayment: VND 775,000
- 3-month total refund: VND 2,325,000
According to Article 55 of the Law on Tax Administration, taxpayers have the right to claim refunds of overpaid taxes within prescribed periods, and tax authorities must process valid refund claims with supporting documentation.
Recommendation: Pursue Method 1 (employer correction) first, as it’s faster and doesn’t require waiting until year-end finalization. If employer refuses or delays, Method 2 guarantees recovery through official tax filing.
Do I need to pay taxes on tutoring income earned privately?
Yes, private tutoring income is fully taxable as business income under Vietnamese tax law. For tax residents providing educational services under contracts of less than 3 months or without labor contracts, the paying party should withhold 10% PIT at source according to Circular 111/2013/TT-BTC. This 10% withholding serves as a prepayment, and the income must be included in annual tax finalization where progressive rates (5-35%) will apply to total income, with credit given for the 10% already withheld. Non-residents face 20% withholding on all such income. Operating without proper tax registration and reporting tutoring income can result in penalties from VND 5-25 million plus late payment interest.
What tax documents should I keep and for how long?
Foreign teachers must maintain comprehensive tax documentation for 5 years from the year following the tax obligation, as required by the Law on Tax Administration. Essential documents include: all monthly payslips showing PIT withholding, annual withholding certificates (Form 11-TNCN) from employers, bank statements proving income receipts, tax finalization declarations and supporting documents, dependent registration forms and qualification evidence, insurance premium receipts, DTA application documents and Certificates of Tax Residency, work permits and labor contracts, and foreign tax payment receipts if claiming credits. Store documents both physically and digitally as tax authorities can request these during audits or for verification purposes up to 5 years retrospectively.
Am I eligible for tax refunds and how do I claim them?
Tax residents qualify for refunds when total PIT withheld during the year exceeds actual tax liability after annual finalization, typically occurring when: you had dependents not registered for monthly withholding, you worked partial year but withholding assumed full-year employment, or you paid foreign taxes eligible for credit against Vietnamese liability. To claim refunds, file annual tax finalization (Form 02/QTT-TNCN) by April 30 deadline directly with tax authorities, include all supporting documentation proving overpayment, and request refund or credit against future tax obligations. Tax authorities process refunds within prescribed timeframes but typically require 3-6 months for approval and payment. Non-residents generally do not receive refunds as the flat 20% rate represents final tax liability.
How do online teaching platforms affect my tax obligations?
Foreign teachers earning income through online platforms (teaching Vietnamese students from abroad or from within Vietnam) have tax obligations depending on residency status and income source. If physically present in Vietnam while teaching online, income is Vietnam-sourced and fully taxable – tax residents pay progressive rates (5-35%) on this income, while non-residents pay 20%. Foreign teachers teaching Vietnamese students from outside Vietnam generally have no Vietnamese tax obligation on that income unless the platform is a Vietnamese entity. However, many international platforms do not withhold Vietnamese taxes, requiring teachers to self-report and pay directly to tax authorities through quarterly declarations. For teachers earning from both Vietnamese schools and online platforms, all income must be combined for annual finalization. Maintain detailed records of all platform income, as tax authorities increasingly monitor digital income sources.
What happens to my tax situation if my contract is terminated mid-year?
Contract termination mid-year triggers specific tax obligations depending on residency status. Tax residents must file exit tax finalization within 45 days of departure date (Circular 92/2015/TT-BTC Article 21), reconciling all income and withholding from January 1 through departure, resulting in either refund or additional payment. Non-residents generally have no finalization obligation if their employer properly withheld 20% throughout employment, though finalization may be required if income came from multiple sources. If leaving before completing 183 days in either the calendar year or 12 consecutive months, your status may retroactively change to non-resident, requiring amended declarations and recalculation using the 20% flat rate. Teachers can authorize former employers or representatives to handle post-departure finalization using Power of Attorney (Form 08/UQ-QTT-TNCN). Failure to complete exit finalization can result in penalties up to VND 25 million and complicate future Vietnam employment or visa applications.
Foreign teachers in Vietnam face a structured but manageable Personal Income Tax system. Success requires understanding the 183-day residency rule that determines whether you face 5-35% progressive rates or a flat 20% rate, proper registration for your tax code within prescribed timeframes, accurate monthly monitoring of employer withholding, timely annual finalization by March 31 or April 30 deadlines, and strategic use of available deductions and DTA benefits where applicable.
Begin by determining your current tax status based on your days of presence in Vietnam. Verify your employer correctly applies withholding including all eligible deductions for personal allowance (VND 11 million monthly) and any registered dependents (VND 4.4 million each). Review your employment contract to ensure proper classification as employment versus service income. Maintain organized records of all income, withholding certificates, and supporting documents for the required 5-year retention period.
For teachers from countries with DTAs, investigate available benefits and begin gathering the Certificate of Tax Residency from your home country’s tax authority well in advance of filing deadlines. Consider consulting with a qualified tax advisor for complex situations involving multiple income sources, foreign income, or departure planning.
Most importantly, prioritize timely compliance over optimization – the penalties for late filing or payment significantly exceed any potential tax savings from aggressive positions. Vietnamese tax authorities increasingly emphasize compliance among foreign workers, making proper attention to Personal Income Tax obligations essential for uninterrupted teaching careers in Vietnam.
Explore More Essential Legal and Tax Resources
Understanding Personal Income Tax represents just one aspect of the legal framework governing foreign teachers in Vietnam. For comprehensive guidance on related topics essential to your successful career in Vietnamese education, explore our LEGAL & VISA REQUIREMENTS category.
This specialized section provides detailed information on:
- Work permit requirements and application procedures
- Visa categories and extension processes
- Labor law protections for foreign employees
- Social insurance and health coverage regulations
- Contract negotiation best practices
- Background check and document legalization requirements
Staying informed about Vietnam’s evolving legal landscape ensures you maintain compliant status while maximizing your rights and benefits as a foreign educator. Access these resources to build a complete understanding of your legal obligations and opportunities in Vietnam’s dynamic education sector.
Disclaimer: This guide provides general information about Personal Income Tax requirements for foreign teachers in Vietnam based on current laws and regulations as of 2025. Tax situations vary based on individual circumstances. For specific advice regarding your personal tax position, consult with a licensed tax advisor or contact the General Department of Taxation. Vietnam Teaching Jobs makes no representations or warranties regarding the completeness or accuracy of information provided.
Last Updated: November 2025 | Based on Law on Personal Income Tax No. 04/2007/QH12, Circular 111/2013/TT-BTC, Circular 92/2015/TT-BTC, Circular 80/2021/TT-BTC, and Circular 86/2024/TT-BTC
