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What taxes you pay in Vietnam as an English teacher

There are two categories of English teachers in Vietnam. The first category is the English teachers who work legally in Vietnam and the second category is the English teachers who work illegally in Vietnam. The question is “What kind of taxes do they pay?”

English teachers who work legally in Vietnam

Working legally means that the company you work for (or the school, since we are talking about English teachers) obtained a working permit for you therefore your working contract is registered with Vietnamese authorities. Of course you have to pay tax for your income and of course you get a receipt for the money you paid. How many taxes and how much money you have to pay for those taxes? I have no idea! But I know that they are somewhere around 10% – 20% of your income according to different factors.

English teachers who work illegally in Vietnam

Working illegally means that you signed a contract that is not registered with the Vietnamese authorities, it will never be (because the crappy school that hired you either doesn’t have the right to hire foreigners nor the money to pay for your working permit), and you can use the contract you have just signed as a toilet paper. The vast majority of English teachers falls into this category.

Although you work illegally, the school asks you to pay tax (usually they ask for 10%).

You may wonder why in the world I have to pay tax then.

Here is the thing! You work illegally so the school has to justify the money it pays for you. In order to justify the money, the school has to buy an invoice from the black market. Since there is VAT involved which can not be recovered (or maybe it can be, I have no idea to be honest with you), you have to pay for it.

So, the tax an English teacher pays is the VAT that the school pays for when it buy the invoice to justify the money they give to you as salary for working illegally. Does it make sense?

I have been living and working in Vietnam since 2005 and everything I have just said is my own opinion based on my own experience, based on other teachers’ opinion, and based on my observation as a teacher and “tax” payer. I might be wrong so take this information with a grain of salt.


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