Vietnam Tax for Non-Residents: 2026 Rates and Rules

Two entirely different questions get filed under this heading, and merging them is the reason so much of the available guidance is confusing.

The first is what a foreign company pays when it earns money in Vietnam without an entity there. The second is what an individual pays when they are not tax resident. Different regimes, different rates, different filings.

Both changed in 2026. This page separates them and gives the current position for each.

183 dayspresence that makes an individual tax resident, though not the only route

20%flat rate on a non resident's Vietnam sourced employment income

5 bandsin the resident scale from 2026, reduced from seven

Which question are you actually asking

1. 1
   Is the taxpayer a company or an individual?A company without a Vietnamese entity falls under foreign contractor tax
2. 2
   Company: what is being paid for?Goods, services, construction, interest or royalties each carry their own deemed rates
3. 3
   Individual: were you present 183 days, or do you have habitual residence here?Either one makes you resident. Habitual residence does not depend on day count
4. 4
   Non resident individual: 20 percent flatOn Vietnam sourced employment income only, not on worldwide income

Foreign contractor tax, for companies with no Vietnamese entity

A foreign company paid for goods or services connected to Vietnam is taxed through a withholding mechanism, made up of a deemed corporate income tax element and a deemed value added tax element.

Three features of this table matter more than the numbers.

• The rates are deemed, not real. They apply to gross revenue rather than to profit, so a low margin contract can carry a high effective rate.
• The ranges are not optional. Which end applies depends on the nature of the contract, and a mixed contract can attract different rates to different components.
• The Vietnamese payer usually withholds and remits, which makes your counterparty the enforcement point.
• Services, e-commerce and digital platforms sit in the same row, which is a deliberate alignment with the permanent establishment change described below.

Outside the contractor regime, the standard non treaty rate is 5% on interest and 10% on royalties.

The residence test for individuals

Vietnam has two routes into tax residence, and the second one catches people who are carefully counting days.

• Presence of at least 183 days in a calendar year, or in twelve consecutive months from the date of first arrival.
• Or habitual residence, meaning a registered permanent residence or accommodation rented under a fixed term lease.

The second route does not depend on the day count at all. A person who spends well under 183 days in Vietnam but holds a long term lease can be treated as resident, which changes the tax base from Vietnam sourced income to worldwide income.

For a founder who plans to be the company's resident legal representative, this is not an incidental consequence. The residence card that solves the filing problem tends to establish the tax residence at the same time.

The rates for individuals, and the law that changed them

Non resident, employment incomerate, percent20

Resident, lowest bandrate, percent5

Resident, top bandrate, percent35

Dividends to an individualrate, percent5

Dividends to a companyrate, percent0

Law No. 109/2025/QH15 rewrote the resident scale. It takes effect on 1 July 2026, but the rules on salaries, wages and business income apply from 1 January 2026.

• The direction is downward for most taxpayers, through wider bands and larger deductions.
• The top rate is unchanged at 35%, but it starts later.
• A guide describing seven bands is describing the position before 2026.
• Whether the flat 20% for non residents was altered by the new law is not addressed in the sources reviewed for this page, and should be confirmed rather than assumed.

Getting money out: dividends and interest

Here the published sources genuinely disagree, and the difference is large enough to matter.

• The majority position, including PwC, is that there is no withholding tax on dividends paid to corporate shareholders, and 5% on dividends paid to individual shareholders whether resident or not.
• A minority formulation states that dividends to non resident shareholders bear withholding of 0% to 20% depending on the treaty, with 20% as standard.
• The second reads like a generic template rather than a description of Vietnamese law, and it is inconsistent with the detailed rate tables in the same body of guidance.
• This page follows the majority position, and flags that a distribution large enough to matter deserves confirmation in writing before it is made.

Whichever applies, the practical constraint is upstream of the rate. Profit cannot leave Vietnam until the audited financial statements and the annual tax finalisation are filed, and the tax authority has been notified at least seven working days before the transfer.

E-commerce and digital platforms became a permanent establishment

The 2025 corporate income tax law widened the net for businesses that serve Vietnam without being in it.

• E-commerce platforms and digital platforms are now recognised within the definition of a permanent establishment.
• A foreign enterprise without a permanent establishment is still taxable on Vietnam sourced income, wherever the activity is carried out.
• Tax in those cases is a percentage of total revenue, under government regulation, rather than a charge on profit.
• The contractor tax table already reflects this, grouping e-commerce and digital platforms with services.

If you sell into Vietnam digitally and have concluded that no Vietnamese entity means no Vietnamese tax, that conclusion needs re testing against the 2025 law.

Treaties

Vietnam has an extensive treaty network, and treaty rates on interest and royalties are often lower than the domestic ones.

• Treaty relief is not automatic. It has to be claimed, with documentation, and the conditions have to be met.
• The domestic fallback is 5% on interest and 10% on royalties, which is what applies where no treaty is invoked.
• Contractor tax and treaty relief interact awkwardly, because the deemed VAT element is not an income tax and is not covered by a treaty.
• The counterparty withholds, so any treaty position has to be agreed with them before the invoice is paid.
• Residence certificates have a shelf life, and a claim supported by an out of date certificate is refused rather than queried.
• The claim is usually made by the Vietnamese payer, on the foreign party's documentation, which makes it a joint administrative task rather than a unilateral one.
• The treaty has to cover the payment type, and coverage of services is narrower than coverage of interest and royalties.

The four ways a foreign parent takes money out, and what each costs

For most readers this is the practical question. A Vietnamese subsidiary generates cash, and the group wants it. There are four routes and they are taxed very differently.

The comparison usually surprises people, because the dividend looks free and the service fee does not.

• The dividend is cheapest at the point of payment, but it is the slowest, because it waits for the audit and the annual finalisation.
• A service fee moves cash during the year, which is often the real objective, at the cost of contractor tax on the gross amount.
• A royalty needs substance. A charge for intellectual property that the parent does not demonstrably own or maintain is the first thing a related party review tests.
• A shareholder loan is the cheapest headline rate at 5%, and the most exposed to the interest deductibility rules on the Vietnamese side.

Choosing among them on the withholding rate alone is a mistake. The deductibility of the payment in the Vietnamese company, and its treatment in the parent's country, usually move the total further than the Vietnamese rate does.

Who actually pays the withholding

This is a contract drafting question that becomes a pricing question.

• The Vietnamese payer withholds and remits, so the foreign supplier receives a net amount unless the contract says otherwise.
• A gross up clause shifts the cost back to the Vietnamese party, which then bears the tax on top of the fee.
• A contract silent on the point leaves the foreign party absorbing it, which is a discovery usually made at the first payment.
• Mixed contracts get split. A single agreement covering equipment supply, installation and training can attract three different deemed rates to its three components.
• Splitting a contract deliberately is visible, and an artificial allocation between components is the first thing a review tests.
• The deemed value added tax element may be creditable to a Vietnamese payer registered for value added tax, which changes the real cost to them and is worth raising in the negotiation.

The practical instruction is to price the contract on the net receipt you need and to state expressly which party bears Vietnamese taxes. Both are ordinary drafting, and both are routinely omitted.