Vietnam sits 94th out of 217 in our world ranking, with a FiScore of 5.4 out of 10. It has become one of the most talked-about destinations in Southeast Asia: costs are low, the economy is growing fast, and Ho Chi Minh City and Hanoi have real expatriate communities.
There is one thing about Vietnamese tax that almost every enthusiastic article gets wrong, and it is the most important thing on this page.
Vietnam is not territorial
Most people assume Southeast Asia means territorial taxation, because Thailand, Malaysia and the Philippines all work that way in some form.
Vietnam does not. A Vietnamese tax resident is taxed on worldwide income, wherever it arises and wherever it is paid.
There is no remittance rule to manage, no foreign-source exemption, no holding period. If you are resident, Vietnam taxes the lot.
That single fact disqualifies Vietnam for a large share of the people who consider it, and it is worth knowing before the flights are booked rather than after.
The residence test, which is wider than 183 days
You are a Vietnamese tax resident if you are present for 183 days or more in a calendar year, or in twelve consecutive months from arrival.
But there is a second route, and it catches people: habitual residence, which includes holding a registered permanent residence or a fixed-term rented accommodation. Signing a year-long lease can make you resident even if you spend fewer days than you expected.
Non-residents pay a flat 20% on employment income for work performed in Vietnam.
The rates
| Tax | Rate |
|---|---|
| Personal income, resident | 5 to 35%, progressive |
| Corporate | 15 to 20% |
| VAT | 10% |
The personal scale is progressive and reaches 35%, which is not low. Corporate tax runs to 20%, with reduced rates for small enterprises.
A new personal income tax law takes effect from July 2026, and the personal deduction rises to 15.5 million dong a month for the 2026 tax year. The band structure is being reworked, so anyone planning around specific thresholds should check the text in force rather than a summary.
What Vietnam is actually good for
None of the above means Vietnam is a bad choice. It means it is not a tax play.
Costs are genuinely low, materially below Thailand and far below Singapore. The economy is growing at a pace that creates opportunity. The food and the quality of daily life draw people and keep them.
For someone building a business serving Vietnam, or working for a Vietnamese employer, the country is compelling on its own terms. For someone looking to shelter foreign income, it is the wrong address.
If you are American
Two systems that both tax worldwide income, with no US-Vietnam comprehensive income tax treaty to coordinate them. Foreign tax credits do the work, and Vietnamese rates at the top of the scale are high enough to generate meaningful credit. Get advice before assuming the arithmetic.
The drawbacks
Worldwide taxation, covered above, and it is the main one.
Vietnam is on the EU blacklist. The Council of the European Union's revised list of 17 February 2026 includes Vietnam. For a European reader that means reinforced reporting obligations and, in some member states, punitive withholding on flows to and from the country. It does not stop you living there, and it does add friction to everything financial.
Administrative complexity. Registration, work permits and compliance are heavier than in Thailand, and the process is slow.
Banking and capital controls are more restrictive than elsewhere in the region.
Air quality in Hanoi in particular is a serious daily consideration.
So, who is Vietnam for?
- Someone employed by or building a business inside Vietnam: good, and the costs are excellent.
- Someone who will spend under 183 days and sign no lease: fine, but read the habitual residence rule carefully.
- Someone hoping to shelter foreign income: no. Look at Thailand, Malaysia or Georgia.
The full table of Vietnamese rates is on our Vietnam page, and the comparison tool puts it next to anywhere else.
Sources
Figures verified in August 2026 against the Vietnamese General Department of Taxation, PwC Tax Summaries and firms established in Ho Chi Minh City. An error reported to us gets fixed.
This page informs, it does not advise. Before deciding anything, talk to a professional who will look at your situation, as our terms of use set out.