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A foreign expert's package rarely consists of salary alone. Housing, children's school fees, home-leave flights and international health insurance often make up a significant share. Correctly identifying which expat benefits are subject to personal income tax (PIT/TNCN) helps the company avoid under-withholding and avoids expats paying tax they do not owe. This article provides an item-by-item reference table compiled by the accounting services team at ACCA Consulting Vietnam.
1. General principle: cash and non-cash benefits can both be taxable
Income from salaries and wages includes non-cash benefits the employee receives, such as rent, school fees or membership fees paid by the company. Exceptions apply only to items that the PIT regulations expressly list as excluded from taxable income, subject to specific conditions.
The right approach is therefore not to memorize a list of "exempt items", but for each item to find the corresponding provision in the current regulations, check the conditions and keep supporting documents. The PIT regulations are being amended, so the table below only shows the usual treatment, to help you know what to look up.
2. Reference table: common expat benefits and PIT
| Benefit | Usual treatment | What to check | Documents to keep |
|---|---|---|---|
| Rent paid by the company | Included in taxable income, subject to a cap | The cap as a percentage of total income under current regulations | Lease, invoices, payment records |
| Electricity, water and services with housing | Usually combined with the housing benefit | Whether the lease itemizes these charges separately | Utility invoices |
| Children's school fees | In some cases excluded from taxable income | Level of education, place of study and eligible persons under the regulations | School contract/invoices, proof of relationship |
| Home-leave air tickets | In some cases excluded from taxable income | Number of trips, home-leave purpose, provisions in the employment contract | Tickets, invoices, employment contract stating the benefit |
| Voluntary health insurance | Depends on the type of insurance | Whether premiums accumulate; individual or group policy | Insurance contract, list of insured persons |
| Relocation costs | Requires analysis of the substance | One-off payment on taking up the post or a recurring payment | Moving invoices, assignment decision |
| Club or gym membership | Usually taxable if for a named individual | Card in the individual's name or shared use | Invoices, membership card |
| Training, Vietnamese language classes | May be excluded if work-related | Purpose of improving professional skills | Training plan, invoices |
For items that are "in some cases excluded", the conditions are usually in the details: who the beneficiary is, whether the payment is stated in the employment contract, and whose name is on the invoice. If one condition is missing, the item reverts to taxable income.
- Housing50%
- Children's school fees30%
- Air tickets10%
- Health insurance10%
Illustrative example, not statistical data. Most of the value lies in housing and school fees, so these two items should be checked first.
View as table
| Housing | 50% |
| Children's school fees | 30% |
| Air tickets | 10% |
| Health insurance | 10% |
3. The two largest items: housing and school fees
Housing
Rent paid by the company on behalf of an expat is included in taxable income, but not above a percentage of total taxable income set by current regulations. The accountant needs to calculate the cap each month, compare it with the actual rent and take the lower figure. If the contract states a net salary, the housing amount included in income must also be grossed up, as explained in grossing up net salaries.
Children's school fees
The guidance contains provisions on school fees paid by the employer for children of foreign nationals studying in Vietnam at certain levels of education. Check the level of education, the place of study and how the documents are prepared. University fees, fees for study abroad or cash paid to the expat to pay the fees themselves usually need to be considered separately.
4. Process for checking which expat benefits are subject to PIT
- 1Break down the package
List each item in the offer letter, employment contract and group policy.
- 2Look up the provision
For each item, find the corresponding rule in the current PIT regulations and record the document reference.
- 3Design the documentation
Agree that invoices are issued in the company's name, with payment made directly to the supplier where appropriate.
- 4Add to payroll
Add taxable items to monthly income, gross up if the salary is net, and keep the calculation sheet.
5. Documents and deductible expenses for the company
Expat benefits also affect corporate income tax (CIT/TNDN). For a payment to be a deductible expense, the company must state the benefit clearly in the employment contract or internal policy and hold valid invoices and documents. Invoices of VND 5 million or more (including VAT) must be paid by non-cash means for the input VAT to be deductible.
- Employment contract or assignment letter stating each benefit.
- The company's salary, bonus and benefits policy.
- Lease agreement, school contract, insurance contract.
- Invoices and bank payment records.
- Monthly calculation of the benefits included in taxable income.
- Notes on the regulation consulted for each item excluded from taxable income.
FAQ
If the company pays rent directly to the landlord, is the expat still taxed?
It may still be included in taxable income, within the statutory cap. Paying the landlord directly keeps the documentation clear, but does not automatically make the item exempt.
Are benefits provided to all employees subject to PIT?
General expenses where no named beneficiary can be identified are usually treated differently from expenses specific to an expat. Review the internal policy and how the documents are prepared.
Must benefits be included in income for a non-resident expat?
Yes. Benefits linked to work in Vietnam are still income arising in Vietnam and are taxed using the method that applies to non-resident individuals.
Review your expat packages before finalization
Send your contracts and benefits policy to ACCA Consulting Vietnam for a free preliminary review. Accounting services based in Ho Chi Minh City, working bilingually in Vietnamese and English.
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