Foreign teachers in Vietnam classified as tax residents (present 183+ days) can claim VND 11 million monthly personal deduction and VND 4.4 million per dependent under current 2025 regulations (Resolution 954/2020/UBTVQH14). These amounts increase significantly from January 1, 2026 to VND 15.5 million personal deduction and VND 6.2 million per dependent (Resolution 110/2025/UBTVQH15). Tax residents benefit from progressive rates (5%-35%) after deductions, while non-residents pay flat 20% with zero deductions available.
Available Deductions for Tax Residents:
- Personal Allowance: VND 11M/month (2025) → VND 15.5M/month (2026)
- Dependent Allowance: VND 4.4M/month per dependent (2025) → VND 6.2M/month (2026)
- Compulsory Insurance: 10.5% of salary (8% social + 1.5% health + 1% unemployment)
- Charitable Donations: Unlimited deduction up to total taxable income
Legal Basis: Law on Personal Income Tax No. 04/2007/QH12, Circular 111/2013/TT-BTC, Circular 92/2015/TT-BTC, Resolution 954/2020/UBTVQH14 (current), Resolution 110/2025/UBTVQH15 (2026).
Foreign teachers working in Vietnam need to understand tax deductions and exemptions to maximize take-home pay while ensuring legal compliance. This comprehensive guide explains all available deductions, 2026 regulatory changes, eligibility requirements, claiming procedures, and practical tax-saving strategies based on current Vietnamese tax law.
What Tax Deductions Can Foreign Teachers Claim in Vietnam?
Foreign teachers classified as tax residents can claim four main deduction categories: personal allowance (VND 11 million monthly), dependent allowance (VND 4.4 million per dependent monthly), compulsory insurance contributions (10.5% of gross salary), and charitable donations to government-approved organizations.
Personal Allowance (Self-Deduction)
Tax residents automatically receive VND 11 million monthly personal deduction under Resolution 954/2020/UBTVQH14 issued by Vietnam’s National Assembly Standing Committee. This deduction requires no registration or documentation—it applies automatically when employers calculate Personal Income Tax (PIT) withholding. The legal framework comes from Article 19 of Law on Personal Income Tax No. 04/2007/QH12 as amended by Law No. 26/2012/QH13.
Example calculation: A teacher earning VND 30 million monthly gross salary automatically reduces taxable income by VND 11 million before applying progressive tax rates.
Dependent Allowance
Tax residents may claim VND 4.4 million monthly per registered dependent according to Resolution 954/2020/UBTVQH14. Qualifying dependents include:
- Children under 18 years old
- Children 18+ years who are full-time students or unable to work due to disability
- Spouse earning ≤ VND 1 million monthly
- Parents earning ≤ VND 1 million monthly
- Other relatives living with taxpayer earning ≤ VND 1 million monthly
Critical requirement: You must register dependents with Vietnamese tax authorities by submitting registration forms with supporting documents (birth certificates, marriage certificates, income statements) to your employer, who forwards them to tax authorities. Each dependent can only be claimed once by one taxpayer per tax year.
For detailed guidance on claiming Double Taxation Agreement benefits and avoiding dual taxation on foreign income, review our comprehensive guide on How to Avoid Double Taxation in Vietnam: Tax Treaty Guide for Foreign Teachers.
Compulsory Insurance Contributions
Foreign teachers working under employment contracts in Vietnam must participate in mandatory social insurance programs. Employee contributions are fully deductible before calculating PIT according to Article 2 of Circular 111/2013/TT-BTC:
| Insurance Type | Employee Rate | Deductible | Legal Basis |
|---|---|---|---|
| Social Insurance | 8% | Yes | Law on Social Insurance 2024 |
| Health Insurance | 1.5% | Yes | Law on Health Insurance |
| Unemployment Insurance | 1% | Yes | Law on Employment |
| Total | 10.5% | Yes | — |
Important: Insurance contributions are capped at 20 times the basic wage for social/health insurance (currently VND 2,340,000 × 20 = VND 46.8 million) and 20 times regional minimum wage for unemployment insurance.
Example: Teacher earning VND 30 million pays VND 3.15 million (10.5%) in insurance contributions, which is completely deductible from gross income before calculating tax.
Charitable and Humanitarian Donations
Contributions to government-approved charitable, humanitarian, and educational organizations are fully deductible up to the taxpayer’s total taxable income per Article 15 of Circular 92/2015/TT-BTC. Qualifying donations include:
- Charitable foundations and humanitarian funds established under Vietnamese law
- Educational encouragement funds
- Organizations caring for children, disabled persons, elderly without family support
- Disaster relief funds
Documentation requirement: You must obtain official receipts from approved organizations. Without proper documentation, donations are non-deductible. Deductions apply in the tax year when contributions are made and cannot be carried forward.
Who Qualifies for Tax Deductions in Vietnam?
Only foreign teachers classified as tax residents qualify for personal allowances, dependent deductions, and insurance contribution deductions. You become a tax resident by meeting either criterion under Article 2 of Law on Personal Income Tax and Article 1 of Circular 111/2013/TT-BTC:
- Physical presence in Vietnam for 183 days or more in a calendar year (January 1-December 31), OR
- Physical presence for 183+ days within any 12 consecutive months from first arrival date, OR
- Having permanent or temporary residence in Vietnam with lease term ≥ 183 days
Tax residents pay progressive income tax rates (5%-35% on taxable income) on worldwide income and can claim all available deductions. Non-residents pay flat 20% rate on Vietnam-sourced income only with zero deductions available—no personal allowance, no dependent deductions, no insurance deductions per Article 26 of Law on Personal Income Tax.
Impact comparison:
| Status | Gross Salary | Deductions Available | Tax Rate | Tax Owed |
|---|---|---|---|---|
| Tax Resident | VND 30M | Personal (11M) + Insurance (3.15M) | Progressive 5%-35% | ~VND 2.4M (8%) |
| Non-Resident | VND 30M | None | Flat 20% | VND 6M (20%) |
| Difference | — | — | — | VND 3.6M savings |
What Major Tax Changes Take Effect in 2026?
Vietnam’s amended Personal Income Tax Law brings substantial increases to deductions effective January 1, 2026, passed by the National Assembly on December 10, 2025, under Resolution 110/2025/UBTVQH15. These changes replace Resolution 954/2020/UBTVQH14 which has governed deductions since June 2020.
Increased Deduction Amounts (2026)
| Deduction Type | 2025 Amount | 2026 Amount | Increase | % Change |
|---|---|---|---|---|
| Personal deduction | VND 11M/month | VND 15.5M/month | +VND 4.5M | +41% |
| Dependent deduction | VND 4.4M/month | VND 6.2M/month | +VND 1.8M | +41% |
| Annual personal | VND 132M/year | VND 186M/year | +VND 54M | +41% |
| Annual dependent | VND 52.8M/year | VND 74.4M/year | +VND 21.6M | +41% |
These increases reflect Vietnam’s accumulated Consumer Price Index (CPI) growth and rising living costs since the previous 2020 adjustment. The government explicitly designed these changes to reduce tax burden on middle-income earners and families with dependents.
Practical Impact: Who Pays Zero Tax in 2026?
Single teacher, no dependents:
- Gross salary: VND 17 million/month
- Less insurance (10.5%): VND 1.785 million
- Less personal deduction: VND 15.5 million
- Result: No tax owed (deductions exceed income)
Teacher with 1 dependent:
- Gross salary: VND 24 million/month
- Less insurance (10.5%): VND 2.52 million
- Less personal deduction: VND 15.5 million
- Less dependent deduction: VND 6.2 million
- Result: No tax owed (total deductions VND 24.22M exceed gross income)
Simplified Tax Brackets (Effective July 1, 2026)
The amended PIT Law streamlines progressive tax rates from 7 brackets to 5 brackets while maintaining the 35% top rate. However, personal and dependent deduction increases take effect earlier on January 1, 2026.
How Much Tax Can Foreign Teachers Save with Deductions?
Foreign teachers can reduce monthly tax liability by VND 2-7 million depending on salary level and number of dependents. Tax savings come from applying deductions to reduce taxable income before progressive tax rates apply.
2025 Tax Calculation Examples (Current Rates)
Example 1: Single teacher, no dependents
- Gross salary: VND 30 million/month
- Less insurance (10.5%): VND 3.15 million
- Less personal deduction: VND 11 million
- Taxable income: VND 15.85 million
Progressive tax calculation:
- First VND 5M @ 5% = VND 250,000
- Next VND 10M (5M-15M) @ 10% = VND 1,000,000
- Remaining VND 0.85M (15M-15.85M) @ 15% = VND 127,500
- Total tax: VND 1,377,500 (effective rate 4.6%)
vs. Non-resident: Would pay VND 6 million (20% flat) Monthly savings: VND 4,622,500 ($185 USD)
Example 2: Teacher with 2 dependents
- Gross salary: VND 50 million/month
- Less insurance (10.5%): VND 5.25 million
- Less personal deduction: VND 11 million
- Less 2 dependents (2 × 4.4M): VND 8.8 million
- Taxable income: VND 24.95 million
Progressive tax calculation:
- First VND 5M @ 5% = VND 250,000
- Next VND 5M (5M-10M) @ 10% = VND 500,000
- Next VND 8M (10M-18M) @ 15% = VND 1,200,000
- Remaining VND 6.95M (18M-24.95M) @ 20% = VND 1,390,000
- Total tax: VND 3,340,000 (effective rate 6.7%)
vs. Non-resident: Would pay VND 10 million (20% flat) Monthly savings: VND 6,660,000 ($267 USD)
2026 Impact Analysis
Single teacher earning VND 30M:
- 2025 tax: VND 1,377,500
- 2026 tax: VND 220,000 (due to increased deductions)
- Additional annual savings: VND 13.89 million ($557 USD)
Teacher with 1 dependent earning VND 40M:
- 2025 tax: VND 2,377,500
- 2026 tax: VND 770,000
- Additional annual savings: VND 19.29 million ($773 USD)
How Do Foreign Teachers Claim Tax Deductions?
Foreign teachers claim deductions through employer monthly withholding or direct tax filing. The process requires Tax Identification Number (TIN) registration and dependent registration before deductions apply.
Complete 4-step process to claim tax deductions including TIN registration, dependent registration, monthly withholding, and annual tax finalization.
Register for Tax Identification Number (TIN)
All foreign teachers must obtain a 10-digit TIN before claiming any deductions. Register through employer by submitting passport copy, work permit, employment contract, and visa. Processing time is 7-10 business days.
Register Dependents
Submit dependent registration forms with birth certificates, marriage certificates, and income statements through employer within 3 months of obligation arising. Each dependent can only be claimed by one taxpayer per year. Deduction applies from registration month forward, not retroactively.
Monthly Tax Withholding
Employer calculates gross salary, deducts compulsory insurance (10.5%), subtracts personal allowance (VND 11M in 2025, VND 15.5M in 2026) and registered dependent allowances, applies progressive tax rates to remaining taxable income, and withholds and remits tax by 20th of following month. Retain monthly payslips for annual tax finalization.
Annual Tax Finalization
Complete annual tax finalization by March 31 (through employer) or April 30 (direct filing). Submit annual PIT withholding certificates from all employers, dependent registration confirmation, charitable donation receipts if claiming, and foreign tax payment certificates for DTA benefits.
Step 1: Register for Tax Identification Number (TIN)
All foreign teachers must obtain a 10-digit TIN before claiming any deductions, mandated by Circular 86/2024/TT-BTC (effective February 6, 2025). Registration methods:
Method 1 – Through Employer (Most Common): Your school handles registration by submitting:
- Valid passport copy
- Work permit or exemption certificate
- Employment contract
- Visa/temporary residence card
Processing time: 7-10 business days
Method 2 – Direct Registration: Visit local tax office with required documents. Suitable for teachers with multiple employers or those whose employers cannot facilitate registration.
For complete TIN registration guidance including required documents and step-by-step procedures, see our detailed guide on How to Get Your Vietnam Tax ID Number: Complete Guide for Foreign Teachers.
Step 2: Register Dependents
Claiming dependent deductions requires formal registration with tax authorities. Submit through your employer:
Required documents:
- Dependent registration form
- Birth certificates (for children)
- Marriage certificate (for spouse)
- Parent identification documents
- Income statements proving monthly income ≤ VND 1 million
Registration deadline: Within 3 months after obligation to support dependent arises. Deduction applies from registration month forward, not retroactively.
Critical rule: Each dependent receives one TIN and can only be claimed by one taxpayer per year according to Article 19 of Law on Personal Income Tax.
Step 3: Monthly Tax Withholding
Most foreign teachers claim deductions through employer monthly withholding:
- Employer calculates gross salary
- Deducts compulsory insurance (10.5%)
- Subtracts personal allowance (VND 11M in 2025, VND 15.5M in 2026)
- Subtracts registered dependent allowances
- Applies progressive tax rates to remaining taxable income
- Withholds and remits tax by 20th of following month
Employers provide monthly payslips showing all deductions and tax withheld. Retain these for annual tax finalization.
Step 4: Annual Tax Finalization
Tax residents must complete annual tax finalization by March 31 (through employer) or April 30 (direct filing) per Article 7 of Circular 105/2020/TT-BTC.
Who must file:
- Teachers with multiple employers
- Those claiming charitable donation deductions
- Teachers receiving foreign income while resident
- Anyone seeking tax refunds
Documents required:
- Annual PIT withholding certificates from all employers
- Dependent registration confirmation
- Charitable donation receipts (if claiming)
- Foreign tax payment certificates (for DTA benefits)
What Non-Taxable Benefits Can Foreign Teachers Receive?
Certain employer-provided benefits are tax-exempt when properly structured and documented per Article 2 of Circular 111/2013/TT-BTC. These benefits are excluded from gross taxable income entirely (different from deductions).
Tax-Exempt Benefits (With Proper Documentation)
Children’s education expenses:
- Tuition fees paid directly to educational institutions (not reimbursement)
- Supporting invoices in employer’s name
- Benefit specified in employment contract
Housing allowances:
- Employer-paid rent with lease contract in employer’s name
- Direct payment to landlord (not cash to employee)
- Receipts and invoices proving arrangement
Business travel expenses:
- Transportation, accommodation, per diem for work-related travel
- Proper documentation required
Home leave airfare: Round-trip airfare once per year for expatriate’s home leave is tax-exempt when:
- Route is between Vietnam and country of nationality or where family lives
- Supported by employment contract and copy of ticket showing price and route
- Based on Circular 111/2013/TT-BTC guidance
Job-related training: Employer-paid training courses directly related to teaching duties remain tax-exempt with documentation.
Critical requirement: All tax-exempt benefits require proper documentation—contracts in employer’s name, direct payments, supporting invoices. Without documentation, benefits become taxable income.
Frequently Asked Questions
Can non-resident foreign teachers claim any tax deductions?
No, non-resident foreign teachers cannot claim personal deductions, dependent deductions, or insurance contribution deductions. Non-residents pay flat 20% tax rate on gross Vietnam-sourced income without any deductions per Article 26 of Law on Personal Income Tax. Only tax residents (present 183+ days) qualify for all deduction benefits.
When do the 2026 increased deductions take effect?
January 1, 2026 for personal and dependent deduction increases (VND 15.5M and VND 6.2M). These apply to the 2026 tax year. Annual tax finalization for 2025 (filed in early 2026) still uses 2025 rates (VND 11M and VND 4.4M) per Resolution 110/2025/UBTVQH15.
Do charitable donations need official receipts?
Yes, all charitable donations require official receipts from government-approved organizations to be deductible per Article 15 of Circular 92/2015/TT-BTC. Without proper receipts, donations cannot be deducted from taxable income. The recipient organization must be on Vietnam’s approved charity list.
Can teachers deduct voluntary pension contributions?
Yes, contributions to voluntary pension funds are deductible up to VND 1 million monthly per employee. Contributions exceeding this amount become taxable income for PIT purposes according to Vietnamese tax regulations.
What happens without proper TIN or dependent registration?
Claiming deductions without proper Tax Identification Number or dependent registration constitutes tax evasion. Penalties include back taxes owed plus late payment interest (0.03% daily ≈ 11% annually), administrative fines of 20% of underpaid tax, and potential criminal prosecution for serious cases. Complete proper registration before claiming any deductions.
Can I claim deductions for dependents living outside Vietnam?
Yes, tax residents may claim dependent deductions for qualifying dependents living outside Vietnam if they meet eligibility criteria (relationship, age, income limits). Register dependents with Vietnamese tax authorities and provide supporting documentation translated to Vietnamese where necessary. Deduction amount remains VND 4.4M (2025) or VND 6.2M (2026) regardless of dependent’s location.
Foreign teachers in Vietnam classified as tax residents benefit from substantial deductions that significantly reduce tax burden. Current 2025 deductions include VND 11 million monthly personal allowance and VND 4.4 million per dependent, combined with 10.5% compulsory insurance contribution deductions and unlimited charitable donation deductions. These amounts increase dramatically from January 2026 to VND 15.5 million and VND 6.2 million respectively under Resolution 110/2025/UBTVQH15.
The 2026 amendments represent Vietnam’s commitment to reducing tax burden on middle-income workers and foreign professionals. With proper registration and documentation, tax residents achieve effective tax rates of 3-10% compared to 20% flat rate non-residents pay. A teacher earning VND 30 million monthly saves approximately VND 4.6 million monthly through resident status and deductions.
Understanding and maximizing available deductions requires proper Tax Identification Number registration, timely dependent registration, maintaining documentation, and completing annual tax finalization. For foreign teachers planning long-term careers in Vietnam, these deductions create substantial financial advantages and improve quality of life.
Explore More Legal Requirements for Foreign Teachers
Navigating Vietnam’s tax system is essential for foreign teachers working legally in Vietnam. Discover comprehensive guidance on work permits, visa requirements, employment rights, and legal compliance in our Legal & Visa Requirements category.
Essential resources for foreign teachers:
- Vietnam work permit application requirements and procedures
- Visa regulations and temporary residence card processes
- Employment contract legal requirements and worker rights
- Social insurance and healthcare coverage obligations
- Annual tax finalization and exit tax procedures
Stay informed about legal obligations to ensure smooth, compliant teaching experience in Vietnam’s growing education sector.
