Is Salary Transferred From Overseas To A Vietnamese Bank Account Subject To Tax In Vietnam?

A foreign national temporarily resides in Vietnam and opens a bank account there. The individual subsequently moves to Japan to work under an employment contract and receives their salary in the Vietnamese bank account previously opened. When paying the salary, the Japanese company withholds the applicable taxes in accordance with Japanese law.

Ms. Le Thi Bich Tram from Ca Mau asks whether the salary transferred to Vietnam is subject to any additional taxes under Vietnamese law.

The Ca Mau Provincial Tax Department provides the following guidance:

Pursuant to Articles 4, 5 and 6 of Decree No. 253/2026/ND-CP dated June 30, 2026, issued by the Government, detailing certain provisions and measures for the implementation and guidance of the Law on Personal Income Tax:

Article 4. Tax Residents

A tax resident is an individual who satisfies one of the conditions specified in Clause 2, Article 2 of the Law on Personal Income Tax, as further detailed below:

1. Presence in Vietnam for 183 days or more: An individual is present in Vietnam for at least 183 days in a calendar year or within 12 consecutive months from the date of their first arrival in Vietnam. For individuals entering and leaving Vietnam, both the arrival date and departure date are counted as days of presence. If an individual enters and exits Vietnam on the same day, it is counted as one day of residence. Arrival and departure dates are determined based on the certification of the immigration authorities recorded in the individual’s passport, travel document, or other documents relating to the purpose of entry into or exit from Vietnam.

For the purposes of this provision, an individual’s presence in Vietnam means their physical presence within Vietnamese territory.

1. Having a regular place of residence in Vietnam, under either of the following circumstances:
   a) Having a registered permanent residence, specifically:
   • For foreign nationals, this means the permanent residence recorded on their Permanent Residence Card or the temporary residence declared when applying for a Temporary Residence Card issued by the competent authority under the Ministry of Public Security.
2. b) Having a rented residential property in Vietnam in accordance with housing regulations, with a total lease term of at least 183 days in the tax year.
   An individual who does not have a regular place of residence as specified in Point a of this Clause, but whose total rental period under one or more residential lease agreements is at least 183 days during the tax year, is also considered a tax resident, including cases involving rentals at multiple locations. Residential accommodation includes hotels, guesthouses, motels, boarding houses, workplaces, and office premises, regardless of whether the individual rents the accommodation personally or their employer rents it on their behalf.
3. Where an individual has a regular place of residence in Vietnam as specified in Clause 2 of this Article but is physically present in Vietnam for fewer than 183 days during the tax year and cannot prove tax residency in any other country, that individual is considered a tax resident of Vietnam.

Tax residency in another country must be substantiated by a Certificate of Tax Residence. Where an individual is a resident of a country or territory that has concluded a Double Taxation Avoidance Agreement with Vietnam and the relevant jurisdiction does not provide for the issuance of such certificates, the individual may submit a copy of their passport to demonstrate their period of residence.

Article 5. Non-Residents

A non-resident, as defined in Clause 3, Article 2 of the Law on Personal Income Tax, is an individual who does not satisfy the conditions specified in Article 4 of this Decree.

Article 6. Taxable Income

Under Clause 2, the scope of taxable income for residents and non-residents is determined as follows:

1. a) For tax residents, taxable income includes income arising both within and outside Vietnam, regardless of where the income is paid or received.
2. b) For non-residents, taxable income includes income arising within Vietnam, regardless of where the income is paid or received.

Based on the above provisions and the information provided by Ms. Bich Tram, the personal income tax (PIT) obligations in Vietnam applicable to the salary received are determined as follows:

1. Where the foreign national is a tax resident of Vietnam

For tax residents, taxable income includes income arising both within and outside Vietnam, regardless of where the income is paid or received. Accordingly, salary paid by a company in Japan to a foreign national who qualifies as a tax resident of Vietnam is subject to PIT in Vietnam.

The taxpayer may claim a foreign tax credit for income tax paid in Japan against the PIT payable in Vietnam. The credit available in Vietnam cannot exceed the amount of Vietnamese PIT, calculated under the progressive tax rates, attributable to the income arising in Japan.

If the PIT payable in Vietnam exceeds the tax paid in Japan, the taxpayer must pay the shortfall to the Vietnamese state budget.

2. Where the foreign national is a non-resident of Vietnam

This income is not subject to PIT in Vietnam. The transfer of salary to a bank account maintained in Vietnam does not, in itself, give rise to a PIT liability in Vietnam in respect of that income.