1. The issue: foreigners working remotely for Vietnamese companies — where is tax due?
Cross-border remote work is increasingly common: a software engineer in India, a designer in the Philippines working full-time remotely for a company in Vietnam, paid by the Vietnamese company but never setting foot in Vietnam. Question: is this income subject to Vietnamese PIT?
2. Legal basis
- Law 109/2025/QH15 (effective 01/7/2026) — taxable scope for non-residents: Vietnam-source income, regardless of where it is paid or received.
- The employment article in double tax treaties (OECD model): employment income taxable only in the residence state if the worker is not present in the work state and meets the 183-day/permanent-establishment conditions.
- Circular 80/2021/TT-BTC (point b, clause 1, Article 62) — treaty application procedures (COR + notification dossier, form 01/HTQT).
3. Three scenarios
Scenario 1 — fully remote from abroad, never in Vietnam: under the treaty’s employment article (if the residence country has a treaty with Vietnam), income is taxable only in the residence state. Example: a Korean IT expert working remotely from Seoul on a Vietnamese company’s project, paid by the Korean parent, never in Vietnam — no Vietnamese PIT, only Korean tax. Scenario 2 — no treaty: income paid by the Vietnamese company is Vietnam-source — the non-resident faces a flat 20% on gross income, withheld by the Vietnamese company. Scenario 3 — remote but occasional Vietnam visits: presence days must be counted; exceeding 183 days in 12 months (or meeting other residency criteria) makes the individual a Vietnamese tax resident, taxable on worldwide income.
4. Obligations of the Vietnamese company
A Vietnamese company paying remote workers abroad must determine the recipient’s tax residency and treaty status before deciding whether to withhold. If the recipient qualifies for treaty relief (COR + notification dossier), the company withholds nothing or at the treaty rate. Otherwise, it withholds 20% (non-resident) and is responsible for correct withholding.
5. Key takeaways
Remote work does not mean “nobody taxes it”. The keys are tax residency + treaty + actual physical presence. Companies and individuals should clarify all three in writing before signing a remote contract.
6. Frequently asked questions
1. A designer in the Philippines works remotely for a Vietnamese company, never visited Vietnam: Vietnamese tax?
If the Philippines has a treaty with Vietnam and the person qualifies (COR, no Vietnam presence), income is taxable only in the Philippines. Without a treaty, the Vietnamese company withholds 20%.
2. Remote from abroad but visiting Vietnam one month per quarter?
Presence days over 12 months must be cumulated. At 183 days or more, the individual may become a Vietnamese tax resident, taxable on worldwide income — review before hitting the threshold.
3. Must a Vietnamese company withhold when paying remote workers abroad?
Yes, unless the recipient proves treaty relief (valid COR + notification dossier). Without a treaty dossier, withhold 20% for non-residents.
4. Is remote salary a deductible expense for the Vietnamese company?
Yes, with a proper contract, payment documents, and withholding obligations fulfilled (if any). Remote salary is booked like normal personnel costs.
This article has been quality-reviewed by the FLAW AI Legal Council
