Avoid Costly Termination Mistakes: 9 Insights From Employment Dispute Law Firms

  Employment termination can look simple on paper. In real life, it often becomes confusing and stressful. Employers worry about business risk and paperwork. Employees worry about income, final payments, and what happens next.

As employment dispute law firms in Vietnam, we tend to look from both sides, the employers and employees. We bring in steps and cases examples to illustrate what usually goes wrong and what usually fixes it.

9 Insights From Employment Dispute Law Firms in Vietnam to Avoid Costly Termination Mistakes

If a dispute becomes serious or complex, employment dispute law firms in Vietnam may help with negotiation and settlement drafting, but many disputes can be reduced early if you follow the steps below.

Introduction

In today’s interconnected global economy, businesses in Vietnam face increasing pressure to adapt to challenges brought on by global geopolitical tensions and shifting market dynamics.

Workforce reductions and terminations have become more common, as companies navigate shrinking markets and strive to remain competitive.

For employees, however, a termination is rarely just a professional matter, it can have significant emotional, financial, and personal repercussions. They would seek most cost effective legal help.

Quick Reference

Fast answers people usually use for reference:

• What causes most termination disputes in Vietnam? Unclear termination reason, unclear process, or unclear final payment calculation.
• What is the fastest way to solve a dispute? Confirm the reason, write down the facts, calculate money clearly, document handover, settle in writing if possible.
• Who is this for? Employers and employees, including expatriates.

3 Quick Cases You Can Learn From

In here we show short and simple cases that show common patterns and practical fixes.

Case 1: The reason changed

In some instances, when the employee has been informed about the contract termination due to unsatisfactory performance in the meeting, but the termination letter said restructuring reason.

Why it became a dispute? Because the story did not match, so trust broke down.

To avoid employment disputes, both parties need to ensure and agree on one clear reason, written clearly, supported by documents.

Case 2: The payment is not clarified

The employee got one lump-sum offer with no breakdown.

This became a dispute because the employee suspected missing items i.e., leave, allowances, commission.

In order to avoid the disputes the employers were suggested to provide a clear line by line calculation with a simple formula and supporting records.

Case 3: The equipment’s hand-over

There were cases which the final payment was delayed because the employer said assets were not returned. The employee said they were.

This became a dispute because there was no signed handover list.

Now, to solve this, both the employers and the employee would have a basic handover minutes document signed with asset list and confirmation by signature or email.

Why You Should Care

You can find below the guide to avoid disputes and why it matters.

• A dispute costs time and money for both sides.
• A dispute also damages reputation, especially for managers and professionals.
• Most disputes grow because the facts, documents, and numbers are not clear.

We based on common dispute patterns in Vietnam. The cases are anonymous and simplified. Real outcomes depend on your contract, documents, and facts.

What Usually Matters in Termination Disputes

This is the basic building blocks that most disputes are made of.

Fact 1: Most disputes have 4 parts

1. Legal reason why the contract ends
2. Process include notice and required steps
3. Money including final salary, unused leave, severance if any, bonus/commission if any
4. Practical issues i.e. handover, access, reputation, timing

Fact 2: Documents often decide the outcome

Written records reduce confusion. They also stop people from arguing about what was said.

Fact 3: Both sides can lose even if they feel right

Employers lose continuity and control. Employees lose stability and clean exit options.

Why Disputes Grow

The simple reasons small issues become big disputes.

Disputes grow when there is uncertainty:

• The termination reason is unclear or changes.
• The money calculation is not explained.
• The process feels rushed or inconsistent.
• Someone is under time pressure.

Hence it is important to find ways to ensure to reduce uncertainty early and you reduce conflict.

9 Insights from Employment Dispute Law Firms

A practical checklist you can follow.

Step 1: Confirm the termination type first

You cannot solve the dispute if you do not know what type of termination it is.

Employer

• Choose the reason you rely on i.e., expiry, mutual agreement, restructuring, performance, misconduct, etc.
• Make sure documents support this reason.

Employee

• Ask for the reason in writing.
• Check consistency across meeting notes, emails, and notice letters.

Step 2: Send a neutral recap email ASAP

This step helps lock the facts early and prevents later arguments.

Include:

• Meeting date/time, attendees
• Stated reason
• Proposed last working day
• Documents promised including notice letter, payment breakdown, handover plan
• Next step and deadline

Suggest you keep it calm and factual without emotion and blame.

Step 3: Prepare a document pack

This step makes negotiation faster and reduces misunderstanding.

Employer pack

• Contract and amendments
• Job description / internal rules used
• Evidence supporting the reason
• Termination notice and proof of delivery
• Payroll breakdown and supporting records
• Handover minutes and asset list

Employee pack

• Contract and amendments
• Payslips/bank transfers
• Key emails/messages
• Termination notice and related emails
• Bonus/commission rules if any
• Handover proof

Step 4: Calculate money line-by-line

This step helps most disputes settle when both sides accept the numbers.

Use a list, not one total number:

• Salary up to last day
• Unused leave payment
• Allowances based on contract/policy
• Severance if applicable
• Bonus/commission if supported by policy/contract
• Deductions with reason and proof
• Payment date and method

Step 5: Separate money from handover

This step suggests both parties avoid mixing these two that turns payment into leverage and creates conflict.

Employer

• Use a handover checklist and confirm it in writing.
• Set a clear access cutoff plan.

Employee

• Return assets with a signed list or email proof.
• Request needed documents separately i.e. work confirmation, payslips, insurance records.

Step 6: If the employee is foreign, handle timing early

This step is about timing pressure makes disputes harder and faster.

Employer

• Align termination dates with paperwork steps.
• Keep HR, finance, and management consistent.

Employee

• Ask early about timelines and documents you need for your next steps.

Step 7: Choose a solution path based on goals

In our experience, not every dispute needs court. Many can be settled earlier.

Common options:

1. Negotiate directly
2. Sign a settlement agreement
3. Use conciliation or mediation or formal complaint steps if needed
4. Court litigation only if necessary

When the facts are complex or risk is high, employment dispute law firms in Vietnam may help draft settlement terms and guide strategy, mainly to avoid mistakes and close the dispute properly.

Step 8: Use a settlement agreement that truly closes the dispute

This step helps avoid a vague settlement often creates a second dispute later.

A settlement should often includes:

• What will be paid, when, how
• What must be returned and by when
• Mutual release with no further claims, if agreed
• Confidentiality
• What happens if someone breaches

Step 9: Escalate only when your timeline and documents are ready

This step reminds parties that escalation without documents usually wastes time.

Employer

• One consistent story across HR, management, finance.

Employee

• One clear timeline and specific requests on what you want, and why.

FAQs

Q1: What should I do first after termination?

Save documents, send a recap email, and request a clear payment breakdown.

Q2: What should an employer do first if the employee disputes termination?

Confirm the reason, check the process, and provide a clear calculation of final payments.

Q3: Are termination disputes always court cases?

No. Many cases settle after facts and numbers are clarified.

Q3: What makes disputes worse?

Changing reasons, missing documents, unclear notice, unclear calculations, and messy handover.

Q5: When should someone use employment dispute law firms in Vietnam?

When the case is high value, high risk, involves serious allegations, involves expatriate timing risk, or needs careful settlement drafting.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/update/employment-dispute-law-firms-in-vietnam-9.html

Contract Disputes in Vietnam: 8 Contract Matters Foreign General Counsels Must Get Right

  

Introduction: Contract Disputes in the Recognition and Enforcement of Foreign Arbitral Awards in Vietnam

When you discuss about contract disputes in Vietnam, most of the time, you might think about what happens when a deal goes wrong.  You could go on and discuss breaches, delays, non payment, termination, or damages.

We now take a different starting point.

We talk about what happens after a dispute has already been decided, often by arbitration, and one party believes it has won and now proceed to recognition and enforcement stages in Vietnam.

Contract Disputes in Vietnam: 8 Contract Matters Foreign General Counsels Must Get Right

In practice, many foreign companies in Vietnam follow a familiar path:
1. A contract is signed and performed.
2. A dispute arises.
3. The parties go to arbitration.
4. An arbitral tribunal issues an award.
5. The winning party moves to enforce or recognize and enforce that outcome in Vietnam under New York Convention.

At this final stage, something unexpected would happens.

Vietnamese courts do not simply look at the arbitral award.
They may look back at the contract itself, sometimes in detail, to assess whether the agreement was valid, properly authorized, and compliant with Vietnamese law.

This means that even when:
• the contract has been used for years,
• the parties have fully performed,
• and an arbitral tribunal has ruled on the merits,

the contract can still become the central issue again at the recognition and enforcement stage in Vietnam.

Why Need To Think Early About Enforcement in Contract Disputes in Vietnam

When it comes to the time to enforce an arbitral awards issued by Vietnam arbitration or to recognize and enforce a foreign arbitral awards in Vietnam, the issue would arise.  Although many contract disputes in Vietnam do not fail on commercial merits, they fail because the contract itself cannot survive judicial review.

Vietnamese courts and arbitral tribunals emphasize:

• authority,
• written consent,
• legal form,
• and documentary integrity.

As a result, contract disputes in Vietnam often shift away from who breached question to more basic questions:

• Did a valid contract exist?
• Who had authority to bind the company?
• Can the agreement be proven cleanly?

For foreign general counsels, it is important to think about enforceability long before a dispute arises.

How Contract Design Shapes Contract Disputes in Vietnam

International arbitration theory emphasizes autonomy, separability, and minimal court intervention. But in contract disputes in Vietnam, decision makers often apply a stricter, document driven approach.

Vietnamese courts typically ask:

1. Was the contract validly formed?
2. Was it signed by the right person?
3. Is the arbitration clause clearly binding?
4. Does the contract comply with mandatory law?
5. Can the contract be proven without ambiguity?

If any answer is uncertain, the dispute escalates regardless of commercial fairness.

8 Contract Matters That Define Contract Disputes in Vietnam

1. Authority to Sign the Contract

One of the most frequent triggers of contract disputes in Vietnam is lack of signing authority.

We see in many cases, contracts are often signed by sales managers, project leaders, or foreign executives without valid authorization.

Vietnamese law applies a strict test that authority must exist at the time of signing.

For instance, in a Hanoi court case, an arbitral award was annulled because the contract was signed by a project director without proper authorization. The company had performed the contract for years, but the court focused solely on authority at signing, not later conduct.

Therefore, the general counsels need to make sure they verify the legal representative or require a valid Power of Attorney before execution. Authority risk is dispute risk.

2. Power of Attorney: Form, Scope, and Legalization

In cross border contract disputes in Vietnam, defective Powers of Attorney are a recurring problem.

Common issues include:

• expired POAs,
• POAs lacking arbitration authority,
• foreign POAs not consularly legalized.

Vietnamese courts treat representation capacity as a foundational legal requirement.

For instance, a Ho Chi Minh City court set aside an arbitral award after finding that a foreign Power of Attorney used in the arbitration had not been properly legalized. The court viewed this as a violation of basic legal order.

Therefore, the company’s general counsels should treat POAs as jurisdictional documents, and not forget to legalize, authenticate properly.

3. Contract Formation: Clear Written Consent Matters More Than Performance

Foreign companies often assume that performance proves agreement.

In contract disputes in Vietnam, this assumption is risky.

Problems arise when:

• contracts are unsigned,
• arbitration clauses appear only on invoices or many times in small letters in terms and conditions,
• email exchanges are treated as final agreements.

Vietnamese courts prioritize clear written consent.

For instance, in a dispute involving long term supply, a court rejected arbitration jurisdiction because the arbitration clause appeared only on delivery notes. Continuous performance did not cure the lack of formal agreement.

Therefore, if it is not clearly agreed in writing, the general counsels expect it to be challenged in a contract dispute in Vietnam.

4. Arbitration Clause Quality and Party Binding

Defective arbitration clauses are a major source of escalation in contract disputes in Vietnam.

Typical issues include:

• incorrect party names,
• references to affiliates instead of contracting entities,
• conflicting dispute resolution clauses.

Vietnamese courts could interpret arbitration clauses narrowly and literally.

For instance, a Vietnamese court refused to recognize arbitration jurisdiction where the clause named a parent company instead of the actual contracting party, even though the commercial relationship was clear.

Therefore, general counsels would note that arbitration clauses are not boilerplate

5. Contract Scope and Dispute Scope Alignment

Many contract disputes in Vietnam arise when tribunals are asked to decide matters outside the contract’s scope.

Examples include:

• reliance on side letters,
• NDAs not covered by the arbitration clause,
• claims based on improperly executed amendments.

Tribunal authority derives strictly from party consent.

For instance, in one annulment case in Vietnam, a court held that the tribunal exceeded its mandate by deciding issues not expressly submitted by the parties, even though the issues were commercially connected.

It is important for the general counsels to remember to align contract scope and dispute scope carefully.

6. Mandatory Vietnamese Law and Contract Legality

Some contract disputes in Vietnam arise because the contract violates mandatory law.

High risk areas include real estate, financial, banking and other conditional sectors.

Even a favorable arbitral award cannot legitimize illegality.

For instance, a court in Vietnam declined to support an arbitral outcome where the underlying contract involved an unlicensed business activity, holding that enforcement would violate fundamental legal principles.

Therefore, for general counsels, compliance review is part of contract governance, not a post dispute exercise.

7. Contract Amendments and Post-Signing Governance

Disputes often arise from what happens after signing.

Common issues include:

• amendments signed by unauthorized persons,
• side letters contradicting the main contract,
• informal email modifications.

Courts may question whether such changes were validly made.

Therefore, for general counsels, it is necessary to apply the same authority and execution standards to amendments as to the original contract.

8. Contract Execution and Documentary Integrity

In Vietnam, a contract must not only exist, it must be provable.

This is not about litigation evidence created later.

It concerns execution discipline from day one.

Weaknesses include:

• inconsistent language versions,
• missing annexes,
• poor document retention.

For instance, in Vietnam, a court questioned enforcement where the parties submitted inconsistent versions of the contract, with unsigned annexes and unclear signing sequences. The dispute shifted from breach to existence.

Therefore, for the general counsels, documentary integrity is a contract issue, not a litigation issue.

Step-by-step: Manage Contract Disputes in Vietnam

Step-by-step: Manage Contract Disputes in Vietnam

Step 1: Confirm the parties and the signing authority

• Verify the Vietnamese counterparty’s legal name, registration number, and legal representative.
• Decide who will sign on your side and whether a Power of Attorney is needed.

Step 2: Lock the commercial deal terms

• Scope of work.
• Acceptance criteria.
• Payment milestones.
• Delivery terms.

Step 3: Choose governing law and dispute resolution strategy early

• Governing law of the contract.
• Arbitration vs court; if arbitration, specify institution, seat, language, number of arbitrators.

Step 4: Draft the arbitration clause like it’s the most valuable paragraph

• Ensure the clause binds the correct entities
• Ensure it covers contract, non contract claims, side letters, and amendments.

Step 5: Check Vietnam mandatory law

• Conditional sectors, foreign exchange, payment flows, interest, penalties, data protection and privacy regulations if relevant.
• If something is sensitive, add compliance representations and a lawful performance clause.

Step 6: Control amendments and side communications

• Make sure no amendment unless in writing and signed by authorized representatives.

Step 7: Execute cleanly and preserve documentary integrity

• Signed signature pages, stamped where used, annexes initialed, signed.
• Consistent bilingual versions and specify which language prevails.
• Centralized storage, originals and signing evidence.

Step 8: Build a dispute ready record while the relationship is still friendly

• Delivery, acceptance records, change orders, meeting minutes, payment confirmations.

FAQ: Questions Relevant to Contract Disputes in Vietnam

Q1: What causes contract disputes in Vietnam most often?

Authority issues, unclear formation, weak arbitration clauses, amendment chaos, mandatory law conflicts, and poor documentary integrity.

Q2: Can we sign a contract by email or scanned PDF in Vietnam?

Often yes in practice, but enforceability depends on clear evidence of mutual consent and authority. For higher risk deals, use clean execution formalities and preserve a reliable signing trail.

Q3: If we performed the contract, can the other side still argue the contract is invalid?

Yes. In contract disputes in Vietnam, performance does not always cure defects in authority, formation, or mandatory legal requirements.

Q4: What is the number one signing mistake foreign companies make in Vietnam?

Letting a counterparty’s commercial head sign without verifying legal authority or a valid Power of Attorney.

Q5: Do we need a Power of Attorney for a foreign director or manager to sign?

If the signer is not the legal representative shown on the business registry, a Power of Attorney is typically needed.

Q6: Should we choose Vietnam law or foreign law as governing law?

It depends on value of contract, deal type, regulatory exposure, assets location, and enforcement strategy. If performance and assets are in Vietnam, Vietnam law may reduce friction; but many cross border deals choose foreign governing law with a Vietnam seat or offshore seat depending on risk tolerance and of course the cost of disputes in relation to the value of the contract.

Q7: Where should we seat the arbitration (Vietnam vs others)?

Vietnam seat can be efficient for Vietnam centric disputes but is more formalistic. In the region, Singapore and Hong Kong are benchmark pro-arbitration seats with strong non intervention traditions. Choose based on where enforcement will happen and how much court supervision you can accept. 

Q8: Do Vietnamese courts enforce arbitration awards?

Vietnam is a New York Convention state, and enforcement is available, but outcomes depend heavily on clean procedure and strong contract documents.

Q9: What makes an arbitration clause invalid or risky in Vietnam practice?

Wrong party names, conflicting clauses, unclear seat, institution, clauses hidden in unsigned documents, or lack of proof both parties agreed.

Q10: Can a side letter or email change the contract?

It can unless your contract does not allow it.

Conclusion: Contract Governance Is Dispute Strategy

In Vietnam, contract disputes are rarely won by arguments alone.

They are decided by preparation, formality, and discipline.

Strong contracts:

• reduce jurisdictional challenges,
• simplify arbitration,
• improve enforceability.

For foreign general counsels, mastering these eight contract matters is the most effective way to manage contract disputes in Vietnam.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/disputes/contract-disputes-in-vietnam-8-facts.html

Vietnam PIT Reform for Foreign Employees in 2026, What Benefits Expats Can Actually Feel?

  If you are a foreign expat in Vietnam with work permit, temporary residence card (TRC), employer sponsorship, you might be interested to learn about the new law on personal income tax (PIT) that impact your payslip.  You would also concern when this new law will become effective and whether you would take home less or more money, or you just want to make sure labour compliance is strictly followed by the company.

In here we continue the theme from our earlier post on the proposal on PIT changes, what was coming is now law, and the real question becomes how the Vietnam PIT reform for foreign employees shows up on a payslip, in payroll withholding, and at year end finalization, especially for higher income foreign professionals.

What the Vietnam PIT Reform for Foreign Employees Actually Changed

1. The amended PIT Law was passed on Dec 10th, 2025 and the main effective date is Jul 1st, 2026

Vietnam passed the amended Personal Income Tax law on Dec 10th, 2025, with effect from Jul 1st, 2026. 

2. Some salary or wage provisions apply from the 2026 tax period

The tax authority notes that certain provisions related to wages or salaries for tax resident individuals apply from the 2026 tax period.

3. Family deductions increase from Jan 1st, 2026

Resolution 110/2025/UBTVQH15 raises deductions to:

• VND 15.5m/month for the taxpayer
• VND 6.2m/month per dependent

Effective and applied from the 2026 tax period. 

4. The progressive schedule becomes simpler, and the 35% threshold shifts higher

From Jul 1st, the progressive PIT schedule moves from 7 brackets to 5, and the top 35% rate applies above VND 100m/month (instead of above VND 80m/month under current rules). 

A table illustrating Vietnam’s progressive personal income tax rates by income level

Why the Vietnam PIT Reform Matters More to High Incomers

High income expats feel the Vietnam PIT reform more because:

•       When income is high, even small payroll settings i.e. deductions, thresholds, benefit treatment can change withholding by millions per month.
•       High income packages usually include bonuses and benefits, which are exactly where classification mistakes happen.
•       The reform has split timing which parts apply from 2026 while a broader effective date arrives later, which increases the chance of payroll applying the wrong rule for months.
•       At high income, any mismatch becomes a cashflow issue now and a finalization headache later.

What the Vietnam PIT Reform Means in Real Life

Benefit 1: Higher deductions reduce taxable income every month

From the 2026 tax period, the family deduction rises to 15.5m/month for the taxpayer and 6.2m/month per dependent. 

For high income expats, deductions matter because they reduce taxable income at the top end of the progressive system, where your marginal rate is highest. This is the most visible part of the Vietnam PIT reform.

Benefit 2: Less of your income is taxed at the top rate (35% starts later)

The top PIT rate remains 35%, but the top band threshold shifts to above VND 100m/month (instead of above 80m/month). 

Even if you are well into the top band, the Vietnam PIT reform for foreign employees still helps because a slice of income that previously entered the 35% layer earlier is now taxed at the layer below first.

Benefit 3: Fewer brackets simplify

A 5 bracket structure is easier to implement consistently than a 7 bracket structure, especially for multinational payroll operations handling allowances, bonus cycles, and split month employment changes. 

This is an underrated advantage of the Vietnam PIT reform for foreign employees, which is stability.

Benefit 4: Dependents become a meaningful lever for long term expats

If you have settled in Vietnam with spouse, children, the dependent deduction increase can be material, but only if you register properly and on time. 

In practice, for many high income expats, the Vietnam PIT reform becomes real only when dependent files are appropriate.

What the Vietnam PIT Reform Means in Real Life

What Can Go Wrong for Expats

Here are the top high income expat risks under the Vietnam PIT reform for foreign employees:

Risk 1: timeline confusion leads to wrong withholding

• Main effective date: Jul 1st, 2026 
• Certain wage/salary rules for residents: applied from 2026 tax period 
• Deduction increase: Jul 1st, 2026 (2026 tax period) 

If payroll updates late, you might overpay for months and only recover or reconcile later. For high earners, that is not just a tax issue, it is a cashflow and trust issue. 

Risk 2: resident vs non-resident assumptions are left unverified

High income expats travel a lot. Resident or non-resident status changes the tax approach dramatically. The Vietnam PIT reform for foreign employees does not remove this risk, if anything, it makes it smarter to confirm your status rather than assume.

Risk 3: gross packages contain quiet taxable items

Senior expat packages often include housing support, education support, relocation benefits, flights, per diem structures, and one off awards. When these are not consistently classified and documented, year end finalization becomes painful, leading to lost trust and leading to potential labour disputes in Vietnam.

Risk 4: dependent deductions are missed in practice

The deduction amount is clear but the execution is not always. If dependent documentation is incomplete or delayed, the Vietnam PIT reform for foreign employees may not translate into reduced withholding during the year. 

Risk 5: not sufficient information

Payroll can apply rules, but payroll cannot guess:

• your travel days,
• your family status documentation,
• the tax classification of certain payments unless HR structures them correctly.

The information has to be updated accordingly, and document support is required to ensure the correct information is used.

Step by Step on Allowance and Benefits Stress Test

Step 1:  Inventory every benefit

Start with a simple list. If it shows up in your offer letter, HR policy, or payslip, even vaguely,  capture it.

Common expat benefits to list:

• Housing: rent, service apartment, utilities, agent fees
• Schooling: tuition, enrollment fees, school transport
• Travel: home leave, relocation flights, baggage, temporary accommodation
• Meals and transport: meal allowance, taxi, car allowance, driver
• Insurance: international health, life, accident
• Devices and work tools: laptop, phone, internet
• One-off items: sign-on bonus, settling-in allowance, relocation package

Step 2: What evidence you must keep

For each benefit, verify:

• Is it cash paid as allowance or in-kind which company pays directly?
• Does it need specific conditions to qualify for a favorable treatment?
• What are the minimum documents needed to defend the treatment?

Evidence checklist example:

• Written policy: company benefit policy, assignment letter, HR handbook excerpt
• Labour contract and appendix mentioning benefit terms.  If needing to review labour contract, do it now.
• Invoices and receipts with names, dates, service period
• Payment proof: bank transfer, reimbursement record

Step 3:  Fix weak documentation

Treat this like a compliance check, to correct or fix the following typical weak spots:

• Receipts without names or service period
• Payments made in cash with no trace
• Allowance paid as a lump sum with no policy basis
• School/housing paid by the employee but claimed informally
• Mixed personal vs business expenses

Fix actions:

• Ask HR for a benefits policy
• Convert informal benefits into formal payroll line items with descriptions
• Standardize invoices with named recipient, period, address for housing if relevant
• Create a simple benefit claim form for reimbursements

Step 4:  Decide the payroll reporting method

Benefits should be handled consistently, month to month.

Pick the method that fits your company’s system:

• Payroll included method: benefits appear clearly on payslip.  This is best for transparency
• Reimbursement method: strict claim and  documentation workflow
• Direct-payment method: company pays vendors and keep contracts, invoices centrally

Step 5:  Prepare for audits

Think of this explanation that HR, Finance, and the employee can all repeat without contradicting each other, including:

• Why the benefit exists: assignment support, employment package
• Who is eligible and under what conditions
• How it’s paid and documented
• Where it appears in payroll records
• Where evidence is stored and who owns it

FAQs: the Vietnam PIT Reform for Foreign Employees

1: Does the Vietnam PIT reform apply to foreigners or only Vietnamese citizens?

PIT rules apply based on taxpayer status and income conditions, not nationality. This is why the Vietnam PIT reform for foreign employees matters for expats.

2: When do I feel the change, January 2026 or July 2026?

Both can be true:

• Deduction increases apply from Jul 1st, 2026 for the 2026 tax period. 
• The amended PIT Law is effective from Jul 1st,2026, and some wage/salary provisions are applied from the 2026 tax period. 

This split timing is the reason the Vietnam PIT reform for foreign employees causes confusion in office chats.

3: What are the new deduction levels?

• Taxpayer: VND 15.5m/month
• Dependent: VND 6.2m/month

From the 2026 tax period. 

4. Does the top rate change under the Vietnam PIT reform?

The top rate remains 35%, but the threshold shifts to above VND 100m/month under the new schedule. 

5. I’m a high earner. Do deductions still matter?

Yes. High earners often benefit more from deductions because they reduce taxable income at higher marginal rates. Under the Vietnam PIT reform for foreign employees, higher deductions are one of the most practical benefits.

6. What’s the most common mistake for expats?

Assuming payroll can apply benefits and deductions without correct personal facts and documentation. Under the Vietnam PIT reform, documentation is the bridge.

7. Why do dependents matter so much in expat conversations?

Because the deduction is monthly and recurring, but the paperwork can be cross border and time consuming.

8. Can I wait to year end to reconcile?

Year end finalization may correct totals, but high income expats usually care about predictable monthly net pay and avoiding surprises. With deduction changes effective from Jul 1st,2026 for the 2026 tax period, it is reasonable to ask how monthly withholding reflects the Vietnam PIT reform for foreign employees. 

9. What about the 5 brackets instead of 7 change?

It is designed to simplify and widen bracket ranges, reducing friction and implementation complexity. It becomes effective from Jul 1st, 2026 in summaries of the amended law. 

Conclusion

If you are a long term foreign expat, the Vietnam PIT reform for foreign employees is not just about paying a bit less or a bit more. To prepare for 2026 tax finalization, for high income professionals, the best outcome for applying the PIT reform right is simple, which are predictable tax, documented facts, and no surprises.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.

Source: https://antlawyers.vn/update/vietnam-pit-reform-for-foreign-employees.html