Tax Obligations for Resident and Non-Resident Property Owners in Vietnam

FAQ - Owning Properties in Vietnam as Foreigners

Is it true that tax responsibilities for foreigners with respect to owning an investment property are the same as those of local owners? I hear that foreigners and non-residents are subject to a flat PIT rate of 20 percent in Vietnam.

The 20 percent flat PIT rate applies specifically to non-resident individuals earning income from employment or contracting work in Vietnam. However, non-residents earning rental income from investment properties are subject to the same tax obligations as local property owners. This clarification was provided in Official Letter No. 5262/TCT-DNNCN, issued by the General Department of Taxation of Vietnam on December 11, 2020.

I am not a resident for tax purposes in Vietnam and my home country has a Double Tax Treaty with Vietnam. Can I claim tax exemption on rental income from my investment property in Vietnam?

To assess this, it’s essential to specify your home country. Vietnam currently maintains around 80 DTAs with other countries. Rental income is commonly addressed in Article 6 of these DTAs, which typically states that income from immovable property is taxed in the country where the property is located. However, provisions to eliminate double taxation may apply, allowing taxes paid in Vietnam to be used as credits against tax payable in your home country.

It’s important to note that double taxation relief under DTAs generally applies only to the income tax portion and is limited to the actual tax paid in Vietnam.

Example: Marcus, an Australian resident, earns a total rental income of VND 600 million from his property in Vietnam from Jan 1, 2026, to Dec 31, 2026. His tax obligations for this period include a VAT of VND 30 million and a PIT of VND 5 million. Under the Australia-Vietnam DTA, Marcus can offset the VND 5 million PIT paid in Vietnam against his tax payable on the apportioned foreign rental income in his 2026 individual tax return in Australia.

I don’t speak Vietnamese and don’t know how to do a tax registration and declaration in Vietnam. I’m not even in Vietnam at the moment. Who is empowered to help me with this?

You can appoint someone in Vietnam, such as your property manager, lessor, or a professional tax consultant, to handle tax compliance procedures on your behalf. To authorize this, you’ll need to complete a Power of Attorney. For the Power of Attorney to be legally effective in Vietnam, it must be:

• Signed by both you and the authorized representative and witnessed by a notary if you are physically in Vietnam; or
• Signed by you, legalized by the Vietnamese Consulate in your home country, then sent to Vietnam for certification by a local notary if you are residing outside of Vietnam.

I purchased a condo in Ho Chi Minh a few years ago but have not been issued a certificate of ownership yet. Why is this happening and what can be done to accelerate the process?

Obtaining certificates of ownership for foreign investors has been a contentious issue in Vietnam due to regulatory conflicts among government agencies. This challenge is particularly pronounced in Ho Chi Minh City, where a significant number of properties have been sold to foreigners.

The Real Estate Association has been actively urging the Ho Chi Minh City People’s Committee to issue ownership certificates to foreign property owners as mandated by the Housing Law, yet the issue remains unresolved. Currently, Hanoi is the only city in Vietnam issuing certificates of ownership to foreign homeowners, so those in Ho Chi Minh City and other provinces may need to wait.

In the meantime, you can consider collaborating with other homeowners to apply pressure on project developers to continue following up with the relevant authorities. If the delay is causing financial or legal complications, selling the property may be an option. However, it is advisable to consult with a legal expert beforehand to ensure compliance and safeguard your interests.

What are the key points for me, as a foreign investor, to consider before buying a property in Vietnam?

For foreign investors primarily interested in rental properties, the return on investment is often a top priority. However, there are several tax, legal, and logistical factors to carefully consider before making a purchase decision:

• Foreign ownership restrictions: In Vietnam, there are restrictions on foreign ownership of land. Foreigners can only buy and own apartments and condominiums for a maximum period of 50 years, after which ownership rights can only be renewed for another period of 50 years.
• The property’s legal status: Delays in the issuance of ownership certificates have been a common frustration among foreign property owners in Vietnam. Additionally, some project developers face unresolved licensing or tax issues, which may prevent them from signing valid purchase contracts. Without a valid purchase contract and ownership certificate, legally transferring property ownership becomes challenging.
• Taxation: Owning a property in Vietnam comes with tax obligations. You’ll need to register for a tax code and pay taxes on any rental income. Tax may also apply if you sell the property in the future (i.e. income from sales of real estate). Compliance is essential, as commercial banks require proof of tax payments before allowing overseas transfers of income earned in Vietnam.
• Property management: If you plan to lease out your investment property, consider how it will be managed in your absence. Reliable property management services can assist with tenant communications, maintenance, and rent collection. Proper insurance coverage for potential damages or losses is also advisable.
• Financing: Obtaining financing from Vietnamese banks may be challenging for foreigners. You may need to explore international banks or finance companies that lend to non-residents. Research and compare financing options carefully before proceeding.

To navigate these complexities, it is highly recommended to consult a professional real estate advisor and engage a legal expert to assist with the negotiation and purchase process.