How is the PIT (Personal Income Tax) finalization for foreigners in Vietnam conducted when they are employed by local enterprises? What are the required conditions and deadlines? In this article, terra will guide you through the latest regulations and key considerations regarding personal income tax finalization procedures for foreigners.
Cases subject to PIT Finalization for Foreigners in Vietnam
In reality, foreign employees working in Vietnam fall into different categories, and therefore the PIT finalization procedure varies depending on their residency status and income structure.
PIT finalization for foreigners who are tax residents in Vietnam
Foreigners considered tax residents are individuals of non-Vietnamese nationality who legally reside and work in Vietnam on a long-term basis. To qualify for residency, they must obtain a permanent residence card.
These individuals are subject to the same personal income tax (PIT) obligations as Vietnamese citizens when earning taxable income. If their salaries are paid in foreign currencies, the amount must be converted into VND based on the average exchange rate at the time of income payment.
Conditions for determining a foreigner as a tax resident in Vietnam:
To be classified as a tax resident, an individual must meet one of the following conditions:
- Condition 1: Present in Vietnam for at least 183 days within 12 consecutive months or in a calendar year from the date of entry. Both the entry and exit dates are counted as full days.
- Condition 2: Maintain a permanent residence in Vietnam, such as a registered temporary or permanent address in accordance with housing laws. If renting, the lease must span at least 90 days within the tax year.
Conditions for determining a foreigner as a tax resident in Vietnam
How to calculate PIT for tax-resident foreigners
- For labor contracts of 3 months or more: Income is subject to the progressive tax rates below (in million VND):
| Tax Bracket | Monthly Taxable Income | Tax Rate | Tax Formula |
| 1 | Up to 5 million | 5% | 5% × taxable income |
| 2 | Over 5–10 million | 10% | 10% × taxable income – 0.25 |
| 3 | Over 10–18 million | 15% | 15% × taxable income – 0.75 |
| 4 | Over 18–32 million | 20% | 20% × taxable income – 1.65 |
| 5 | Over 32–52 million | 25% | 25% × taxable income – 3.25 |
| 6 | Over 52–80 million | 30% | 30% × taxable income – 5.85 |
| 7 | Over 80 million | 35% | 35% × taxable income – 9.85 |
- For contracts under 3 months: PIT is levied at a flat rate of 10% on total income.
PIT finalization for non-resident foreigners in Vietnam
For example, Mr. A – a foreign citizen, works in Vietnam from April 1, 2024. As of December 31, 2024, he has resided in Vietnam for 170 days. Since he stayed for fewer than 183 days in the calendar year, he is classified as a non-resident.
PIT obligations for non-resident foreigners:
- If authorized: If Mr. A has a labor contract longer than 3 months and income from an organization, he may authorize the organization to finalize his PIT, but only for the portion of income paid by that organization.
- If self-declared: If he earns from multiple sources (e.g., salary, business income) and needs to adjust overpaid or underpaid taxes, he must finalize PIT personally.
PIT calculation for non-residents: Regardless of contract duration, PIT is calculated at a flat rate of 20% on taxable income:
| PIT payable = Taxable income × 20% |
Note: Taxable income includes all income generated within Vietnam, regardless of payer. Non-residents are not required to finalize PIT from wages.
In special cases, if Mr. A stays under 183 days during the calendar year but he stays over 183 days within any 12 consecutive months, he will be reclassified as a resident and must finalize tax accordingly.
PIT finalization for foreigners who terminate employment
When a foreigner resigns but continues to work at another organization in Vietnam, the new employer may be authorized to carry out PIT finalization. However, it must be verified whether the individual still qualifies as a tax resident.
Foreigners receiving irregular income from multiple sources must finalize their PIT independently. Authorization is not permitted in such cases.
PIT finalization for foreigners leaving Vietnam
Regulations on PIT finalization for foreigners leaving Vietnam apply when the individual was previously a resident in Vietnam, had earned taxable income in Vietnam, had stayed for more than 183 days in a calendar year, and had registered temporary residence. In this case, they are required to finalize PIT before exiting the country
They must submit their PIT finalization before departure, either by themselves or by authorizing their employer. The deadline for submission is within 45 days of the exit date.
Required documents for PIT finalization for foreigners
The documentation required depends on the individual’s specific situation:
- If income is received from international or overseas organizations: Provide proof of income received and a confirmation letter using Form No. 20/TXN-TNCN (as per Circular 156/2013/TT-BTC).
- If PIT arises outside Vietnam: Attach relevant documents as required by Vietnamese tax authorities.
- If no tax confirmation is available from foreign authorities: Submit copies of tax deduction certificates or bank statements, accompanied by a signed accuracy declaration.
Where to submit the PIT finalization dossier
- Individuals declaring tax directly: Submit to the local Tax Department.
- Individuals with multiple income sources: Submit to the tax authority managing the last income-paying organization.
- Foreigners no longer employed or not claiming dependents at the last employer: Submit to the Tax Sub-Department where they reside.
For business income:
- Operating at a single location: Submit to the local Tax Sub-Department.
- With a business registration certificate (e.g., as an agent): Submit to the registration location.
- Operating in multiple localities: Submit to the authority that issued the first tax code.
PIT finalization deadline
The deadline for PIT finalization filing is typically announced after the financial year ends. Individuals should monitor updates from the tax authority to stay compliant.
Doing PIT finalization and the Social Insurance claim together
For a foreign employee leaving Vietnam these are two separate filings at two separate authorities, and they run on different clocks. PIT finalization goes to the tax authority and is due within 45 days of departure for someone leaving permanently. The one-time Social Insurance claim goes to the Social Insurance office and has no deadline at all, but it cannot start until your former employer has closed your Social Insurance book.
Handling them in the same exit means one set of documents and one conversation with the former employer, instead of chasing the same HR team twice.
- What overlaps. The termination decision, the closed Social Insurance book and your passport are used by both files. Collect certified copies once and use them for both.
- What does not overlap. Tax residency status decides the PIT outcome. It has no effect at all on the Social Insurance claim, which turns only on the contract having ended or the work permit having expired.
- Tax treatment of the payout. The one-time Social Insurance payment is not employment income and is not part of your PIT finalization. Do not add it to the income you declare.
- Sequence that works. Sign the authorisation for the Social Insurance claim while you are still in Vietnam, then finalize PIT. The tax filing can be completed from abroad far more easily than a Social Insurance authorisation can.
If you are leaving within the next two months, the 60-day plan for claiming Social Insurance before you fly sets out what to do at each milestone, and terra’s one-time Social Insurance claim service covers the filing end to end.
terra’s PIT Finalization Service
With a proven track record serving over 250 companies across Japan, New Zealand, Singapore, and other countries, terra is a trusted provider of professional HR and compliance services. We offer a comprehensive suite including terra payroll, labor reporting, PIT services, social insurance, and payroll disbursement, helping organizations maintain full legal compliance while focusing on growth.
Benefits of using terra’s PIT finalization service:
Reduce up to 30% of HR & tax-related workload
Optimize operating costs by up to 20%
Ensure 100% accuracy and minimize tax errors
Full compliance with Vietnam’s legal regulations
terra’s commitments:
- Compliant, risk-free tax finalization
- Real-time policy and regulation updates
- Absolute client data confidentiality
- Prompt support and issue resolution
Let terra be your partner in navigating tax and finance with clarity, confidence, and professionalism.
