PIT for foreign experts in Vietnam: residency, finalisation and leaving the country

The short answer

A foreign expert's PIT obligations depend first on tax residency:

• Residents: present in Vietnam for 183 days or more in a calendar year or in 12 consecutive months from arrival, or having a habitual residence in Vietnam as prescribed. Residents are taxed on worldwide income at progressive rates of 5% to 35%, with family deductions.

• Non-residents: taxed at 20% on employment income arising in Vietnam, with no family deductions.

The three most common risks are:

• salary and bonuses paid by the overseas parent but not declared in Vietnam;

• miscalculating special benefits (housing, children's school fees, airfares);

• failing to finalise PIT before leaving Vietnam.

Under Decree No. 252/2026/ND-CP, foreigners with overdue tax debts may be subject to an exit ban.

Why is this a constant issue for foreign-invested businesses?

Foreign-invested businesses rotate foreign managers and engineers regularly. Their income often has several components:

• salary paid in Vietnam;

• salary paid abroad (split payroll);

• bonuses and shares from the parent;

• benefits such as housing, cars and school fees.

Each component is taxed differently. Meanwhile, the tax authority can cross-check information from work permits, contracts, immigration records and payment data.

Determining residency

Criterion	Resident	Non-resident
Time in Vietnam	183 days or more in a calendar year or in 12 consecutive months from arrival	Under 183 days and no habitual residence
Habitual residence	Permanent residence registration, a temporary residence card, or a rented home meeting the prescribed conditions	None
Scope of taxable income	Worldwide income	Only income arising in Vietnam
Rate on employment income	Progressive 5% to 35% after deductions	20% of gross income
Family deductions	Yes	No

Dual residence. Where an individual is resident in both Vietnam and another country, the applicable tax treaty (if any) determines residence using tie-breaker rules. Circular No. 95/2026/TT-BTC adds guidance for this situation.

What income must be declared in Vietnam?

• Salary and bonuses paid by the Vietnamese employer: withheld monthly by the employer.

• Salary and bonuses paid by the parent or another overseas entity for work in Vietnam: still taxable in Vietnam. The individual self-declares as prescribed, or the Vietnamese company declares on their behalf if so agreed. This is the most frequently missed component.

• Benefits in kind or paid on the employee's behalf: housing, transport, children's school fees, insurance, home-leave airfares and so on. Some items have specific rules on determining taxable income. Businesses should check Decree No. 253/2026/ND-CP.

• Group shares and options: usually give rise to taxable income on receipt or exercise, depending on the plan structure.

• For residents: foreign-source income too, with credit for tax paid abroad as prescribed.

"Net" salary contracts: the gross-up burden

Many foreign experts are paid net, with the employer bearing all PIT. In that case, the tax paid by the employer is itself taxable income, and the salary must be grossed up before tax is calculated.

With the 5-bracket schedule and higher deductions, employers' gross-up costs fall significantly in 2026. Businesses should recalculate their expatriate budgets accordingly.

When the expert leaves Vietnam

1. Finalise PIT on income up to departure. The individual may authorise the employer or an adviser to do this as prescribed.

2. Pay any outstanding tax, or claim a refund of any overpayment.

3. Terminate the work permit and social insurance (if participating) and settle entitlements as prescribed.

4. Check for tax debts before the flight. Foreigners with overdue tax debts may be subject to an exit ban under Article 28 of Decree No. 252/2026/ND-CP.

Illustrative case

Mr H, a Japanese national, was general director of a manufacturing company in Binh Duong for three years. His salary had two parts:

• 60% paid in Vietnam, with tax withheld by the company;

• 40% paid by the parent in Japan, not declared in Vietnam.

The company also rented his home and paid his child's international school fees.

As he prepared to return home, the company requested a review. It found that the salary paid in Japan and some benefits had not been correctly taxed. The company and Mr H dealt with this as follows:

• they filed amendments for the years still within the permitted period;

• they paid the additional tax and late-payment interest;

• they claimed credit for tax paid in Japan on income taxed twice;

• they completed finalisation before the departure date.

As a result, Mr H left Vietnam as planned, with no risk of an exit ban.

FAQs

How long must a foreigner stay to become a Vietnamese tax resident?

183 days or more in a calendar year or in 12 consecutive months from arrival, or having a habitual residence in Vietnam as prescribed.

Is salary paid by an overseas parent taxable in Vietnam?

Yes, if it relates to work performed in Vietnam, or if the individual is a resident (taxed on worldwide income).

What rate applies to non-residents?

20% on employment income arising in Vietnam, with no family deductions.

Can someone leave Vietnam without finalising PIT?

In principle, individuals must fulfil their tax obligations. Foreigners with overdue tax debts may be subject to an exit ban under the rules.

Legal basis

• PIT Law No. 109/2025/QH15 and Decree No. 253/2026/ND-CP.

• Law on Tax Administration No. 108/2025/QH15 and Decree No. 252/2026/ND-CP (Article 28 on exit bans).

• Circular No. 95/2026/TT-BTC on applying tax treaties.

• Labour Code 2019 and Law on Social Insurance 2024 (work permits and insurance).

How W&A can help

PIT for foreign experts sits at the intersection of tax, employment and immigration. W&A supports businesses and individuals with:

• Determining residency and tax obligations for each expert, including dual residence cases.

• Reviewing remuneration structures: offshore pay, benefits and group shares.

• Gross-up calculations for net salary contracts and optimising expatriate budgets.

• PIT finalisation, amendments and tax treaty applications.

• Arrival and departure procedures: work permits, insurance and pre-departure finalisation.