Tax system in Vietnam
Vietnam uses a residence-based personal income tax system. Tax residents are taxed on worldwide income, while non-residents are taxed on Vietnam-related employment income at 20% and on other Vietnam-sourced income at specific rates.
The standard corporate income tax rate is 20%, with lower 15% and 17% rates for qualifying smaller enterprises from the new CIT law, higher rates for oil, gas and certain natural resources, 10% standard VAT with a temporary 8% rate for many supplies through 31 December 2026, and compulsory social insurance for qualifying employees.
Tax rates at a glance
- Income tax
- 5% - 35%Progressive
- Wealth tax
- 0%
- Inheritance tax
- 10%
- Capital gains tax
- 0.1% / 2% / 20%
- Corporate tax
- 20%
- Dividend tax
- 0% / 5%
- VAT
- 10% standard
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Regional operatorsManufacturersExport businessesLocal foundersLong-term investors
Watch out for
- Vietnam income tax changed materially for 2026. The new PIT law reduces employment brackets to five, increases personal and dependent deductions, and takes full effect from 1 July 2026, with salary, wage and business-income rules applying from the 2026 tax year.
- Vietnam does not have a net wealth tax, but it does tax inheritances, gifts, dividends, securities transfers, real estate transfers and business income through PIT, CIT or transaction-based rules.
- Foreign contractors, e-commerce suppliers and digital platforms can trigger Vietnam withholding, VAT and registration obligations even without a Vietnamese legal entity.
Frequently asked questions
Is Vietnam a low-tax country?
Vietnam is not a zero-tax jurisdiction. Resident individuals can pay progressive personal income tax up to 35%, companies generally pay 20% corporate income tax, and VAT, social insurance and withholding taxes can be material.
Which taxes apply in Vietnam?
The main taxes to model are personal income tax, corporate income tax, VAT, foreign contractor tax, social insurance, capital transfer tax, dividend PIT for individuals, inheritance and gift PIT, import duties and special sales tax for selected goods and services.
Is Vietnam good for founders and companies?
Vietnam can be attractive for operating companies, manufacturing, exports and regional growth. The key planning points are CIT incentives, VAT compliance, payroll social insurance, foreign contractor tax, transfer pricing and whether the company qualifies for smaller-enterprise CIT rates.