Vietnam raises freelance tax withholding threshold to 5 million VND

Inside the draft decree on freelance withholding

Vietnam's Ministry of Finance has proposed raising the per-payment threshold for 10% personal income tax withholding on freelance and short-term income from 2 million VND to 5 million VND (about $192). The draft decree has been submitted to the Government but remains under consultation and isn't yet binding.

The threshold sits inside a decree implementing the 2025 Personal Income Tax Law (Law No. 109/2025/QH15), passed Dec. 10, 2025. The law takes full effect July 1, 2026, though some employment and business provisions apply from the 2026 tax year. Vietnamese entities paying freelancers without a labor contract or with contracts under three months, would withhold 10% only once a single payment hits 5 million VND. The rule covers post-contract payments too, such as delayed bonuses or final commissions.

Who feels the change

Resident freelancers, designers, consultants and interpreters working for Vietnamese clients face the most direct impact. Smaller invoices would escape automatic withholding, easing cash flow and cutting refund paperwork at year-end.

Expats counted as tax residents, generally those staying 183 days or more, fall under the same rules when they take local gigs. The shift pairs with higher personal deductions arriving in 2026: 15.5 million VND per month for taxpayers and 6.2 million VND per dependent, which already pushes many low and mid-income residents below the taxable line.

Short-stay nomads and tourists working remotely for foreign clients usually sit outside this regime. Non-residents pay a flat 20% on Vietnam-sourced employment income and offshore-paid work typically never touches Vietnamese withholding at all.

Practical steps for freelancers

• Track payments per invoice, not per month. The 5 million VND trigger applies per payment, so splitting larger fees across smaller invoices avoids automatic withholding.
• Request voluntary 10% withholding on smaller payments if prepaying tax simplifies the annual settlement.
• Submit a written commitment to the payer if total estimated income after deductions falls below the taxable threshold, allowing temporary non-withholding. False declarations carry sanctions under tax administration law.
• Watch for the final decree before July 1, 2026. The 2 million VND threshold still applies until promulgation.

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