Vietnam

Employment income

The definition of taxable employment income is broad and includes all cash remuneration and benefits-in-kind. However, various items are not subject to tax, such as:

• Payments for telephone charges and stationery costs.
• Payments for business trips.
• Overtime/ nightshift premium (i.e. the additional payment above the normal wage, not the full amount of the overtime/night shift payment).
• One-off allowance for relocation (i) from Vietnam for Vietnamese working overseas, (ii) to Vietnam for expatriates working in Vietnam, and (iii) to Vietnam for Vietnamese residing overseas on a long-term basis and returning to Vietnam to work.
• Daily commute for employees from home to workplace and vice versa.
• Once per year home leave round trip airfare for expatriate employees and Vietnamese working overseas.
• etc

Conditions and restrictions are applicable to the above exemptions.

Statutory SI, HI, and UI employer contributions do not constitute a taxable benefit to the employee.

Equity compensation

Share awards and stock options are subject to tax upon sale. At the time of sale, PIT is payable on:

• employment income (progressive tax rates for tax residents and 20% flat tax rate for non-residents), and
• non-employment income on sale of shares (0.1% of the sales proceeds).

The filing requirements of tax on equity compensation are complex, so you are strongly recommended to seek further advice before taking action.

Non-employment income

Taxable non-employment income includes:

• Business income (including rental income in excess of VND 100 million/year).
• Investment income (e.g. interest, dividends).
• Gains on sale of shares.
• Gains on sale of real estate.
• Inheritances in excess of VND 10 million.
• Winning prizes/gifts in excess of VND 10 million (excluding income from winnings at casinos).
• Income from copyright/franchising/royalties/receiving gifts in excess of VND 10 million.  

Non-employment income is taxed separately at rates different from those applicable to employment income (see the Taxes on personal income section).

Exempt income

Non-taxable income includes:

• Interest earned on deposits with credit institutions/banks and on life insurance policies.
• Compensation paid under life/non-life insurance policies.
• Retirement pensions paid under the SI law (or the foreign equivalent).
• Income from the transfer of properties between various direct family members.
• etc