US-Vietnam Tax Treaty: Why There Is (Still) No Treaty in Force - and What US Businesses and Individuals Should Do Instead
The short answer
There is currently no double taxation agreement (DTA) in force between the United States and Vietnam. A treaty — the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income — was signed by both governments in 2015 and ratified on the Vietnamese side in 2017. It has never been ratified by the US Senate, and provisions in the text that fell out of step with US tax law changes after 2020 have kept it in a holding pattern since. Vietnam has comprehensive DTAs with roughly 80 other countries; the United States remains the one major trading partner without one.
For a US-headquartered group with a Vietnamese subsidiary, or a US citizen living and working in Ho Chi Minh City or Hanoi, that gap is not a technicality — it directly affects withholding tax rates, permanent establishment exposure, and whether foreign tax credits fully offset Vietnamese tax paid.
What this means in practice
No treaty-reduced withholding rates. Dividends, interest, royalties and service fees paid from Vietnam to a US recipient are taxed under Vietnam’s domestic rules, not a treaty-reduced rate, because there is no treaty to invoke.
No treaty tie-breaker for dual residency. Individuals who could be tax resident in both countries under domestic law have no treaty article to fall back on to determine a single “home” jurisdiction — the analysis has to be built from each country’s domestic law plus the US Foreign Tax Credit and Foreign Earned Income Exclusion mechanisms.
No totalization agreement either. There is also no social security totalization agreement between the two countries, so US expats and their employers can face social insurance contributions in Vietnam on top of US self-employment or social security tax exposure.
Increased scrutiny on substance. Vietnam’s Circular No. 95/2026/TT-BTC, effective 1 July 2026, tightened how the tax authorities assess treaty and cross-border tax positions generally, placing more weight on beneficial ownership, economic substance and documented business purpose — relevant even where no treaty claim is being made, because it shapes how aggressively authorities probe cross-border payments.
What US individuals and companies can still do
Use the Foreign Tax Credit and FEIE strategically. Careful sequencing of Vietnamese and US filings can meaningfully reduce — though rarely eliminate — double taxation exposure for individuals.
Structure intercompany flows deliberately. Without treaty relief, the withholding tax cost of dividends, royalties, and management fees becomes a real line item that should be modelled before, not after, a Vietnamese entity is capitalized.
Watch the negotiation track. US Treasury and Vietnamese counterparts have periodically discussed renegotiating the 2015 text; businesses with material Vietnam exposure should build treaty ratification into their long-range tax planning, not assume it.
Get a Vietnam-side and US-side view aligned. The costliest mistakes we see are structures planned only from the US side, without a Vietnamese tax agent confirming how the position actually lands under Vietnamese domestic law.
How W&A Consulting helps
W&A Consulting advises US companies entering Vietnam and US individuals working or investing here on exactly this gap — structuring cross-border payments, employment arrangements, and entity setup to legally minimize the cost of operating without a treaty. Our Managing Partner is a licensed tax agent, FCCA, CPA and former Tax and Legal Director at KPMG Vietnam, with direct experience advising US multinationals on Vietnam market entry.
Need a Vietnam-side tax review before you commit capital or relocate staff? Contact W&A Consulting for a consultation.
FAQ
Is there a US-Vietnam tax treaty in 2026?
No. A treaty was signed in 2015 and ratified by Vietnam in 2017, but it has never been ratified by the US Senate and is not in force.
Does this mean US expats in Vietnam are double-taxed?
Not necessarily — the US Foreign Tax Credit and Foreign Earned Income Exclusion still apply, but without a treaty tie-breaker, planning has to be done more carefully than in treaty countries.
Are dividends from a Vietnamese subsidiary to a US parent taxed at treaty rates?
No — Vietnam’s standard domestic withholding tax rates apply, since there is no treaty to claim a reduced rate under.
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