Group policy lets the expert send children to an international school in Ho Chi Minh City with fees paid by the company directly to the school. Accounting asks whether this several-hundred-million-dong yearly amount joins the expert taxable income. Under Circular 111/2013/TT-BTC, school fees for children of foreign workers studying in Vietnam — from kindergarten to high school — paid by the employer are not counted in the expert taxable income.
1. Applicable legal framework
- Circular 111/2013/TT-BTC (Article 2) — children school fees of foreign workers: school fees for children of foreign employees working in Vietnam, studying in Vietnam, at levels from kindergarten to high school, paid by the employer, are not counted in the employee taxable income.
- Scope conditions: the exemption attaches to three elements — the child studies in Vietnam, the level sits within kindergarten to high school, and the money is paid by the company (directly or against the school invoice) under a stated policy.
- Outside the scope: university and postgraduate fees; fees for children studying abroad; and surcharges not of a tuition nature (transport, boarding, separately charged extracurriculars) fall outside this exemption and are tax-tested by their own nature.
- Symmetry with Vietnamese staff abroad: under the same clause, school fees for children of Vietnamese employees working abroad and studying abroad are likewise not taxable — showing the policy principle of supporting families on distant assignments.
2. Practical analysis
- Payment form decides exemption safety. Direct payment to the school against invoice is the cleanest structure; where the expert pays first and is reimbursed, the file must evidence the money flow and a school invoice naming the expert child — one missing link and the tax authority may treat the reimbursement as ordinary salary income.
- The “tuition” boundary needs contractual definition. International school packages bundle tuition, enrolment fees, facility fees, buses and lunches; company policy should list which components the company pays as exempt tuition and which are taxable support, so payroll treats them correctly from the start.
- This is a benefit with outsized negotiation value. Being statutorily tax-free, one dong of employer-paid tuition delivers far more net value to the expert than an equivalent gross salary increase taxed at progressive rates; HR teams should position it correctly in assignment package negotiations.
- Year-end finalisation review is where tax authorities test it. International school fees are large and visible in FDI ledgers; the standard file — company policy, a tuition clause in the labour contract, school invoices, payment evidence — is what keeps the exemption standing through inspection.
3. What the company should do
- Write the school-fee support clause into expert contracts/annexes and company policy: level scope (kindergarten to high school), schools in Vietnam, direct payment to the school against invoice.
- List school fee components separately in policy: tuition within the exemption and surcharges counted in taxable income, so payroll withholds correctly.
- Archive school-fee files per school year (school invoices, payment evidence, parent-child relationship papers) with the expert tax finalisation file.
This article provides general information only and is not legal advice for a specific case. Regulations may change; please check the current texts before acting.
Frequently Asked Questions
1. Are employer-paid school fees for expert children taxable?
They are not counted in taxable income where the Circular 111/2013/TT-BTC conditions are met: children of foreign workers studying in Vietnam, at kindergarten to high school levels, with fees paid by the employer under policy. Outside this scope the money is tax-tested by nature.
2. Up to what amount is expert children school-fee support exempt?
The current guidance sets no money cap on the exemption — all tuition within scope (studying in Vietnam, kindergarten to high school, employer-paid) is non-taxable. The exemption limits are level and place of study, not the fee amount.
3. Is school-fee support for staff children taxable in general?
For children of foreign workers studying in Vietnam from kindergarten to high school: not taxable under the specific clause of Circular 111/2013/TT-BTC. Other cases (university, studying abroad, or domestic Vietnamese staff) are tested as taxable benefits under the general rules.
4. How are bundled international school fees handled?
Split by nature: the core tuition falls in the exemption; non-tuition charges (transport, boarding, separately billed activities) sit outside the school-fee exemption and are tax-handled item by item. Company policy should list components in advance for consistent payroll treatment.
5. If the expert pays first and is reimbursed, is it still exempt?
In principle yes where the substance is employer-paid tuition within scope, but the file must fully evidence it: the school invoice for the expert child and matching reimbursement records. Direct payment to the school against invoice is the safest structure at finalisation.
This article has been quality-reviewed by the FLAW AI Legal Council