Compare taxes and see how much you save moving from Indonesia to Vietnam
Indonesia and Vietnam are the two largest Southeast Asian economies outside Singapore and Thailand, and increasingly popular destinations for regional business operations, expat professionals, and digital nomads. Both countries have nearly identical nominal top income tax rates (35%), but important differences in effective burdens, social contribution systems, and residency rules. Indonesia's non-taxable income threshold (PTKP: IDR 54M/year) is equivalent to approximately $3,300 — low by international standards. Vietnam's family deduction system (VND 11M/month + dependents) is more generous for families but complex to administer. Social contribution comparison: Vietnam's 10.5% total employee contribution is significantly higher than Indonesia's approximately 5% — a meaningful effective rate difference. Both countries have similar 183-day residency rules. A key difference: Indonesia allows expatriate workers in certain sectors to be taxed only on Indonesia-source income for the first 4 years of residency ('expatriate tax exemption' for foreign-source income under certain conditions), while Vietnam taxes residents on worldwide income from day one of residency. Indonesia has a more developed digital economy and e-commerce infrastructure (Tokopedia, Gojek, Bukalapak), while Vietnam has emerged as a major manufacturing and technology outsourcing hub.
PPh21 Progressive; BPJS 2% Employee Health + 3% Pension
Indonesia's PPh 21 (income tax on employment): progressive 5–35% from 2022. Non-taxable income (PTKP): IDR 54M/year for individuals. BPJS Kesehatan (health): 1% employee. BPJS Ketenagakerjaan (employment): 2% JKK + 2% pension employee. Total employee social: ~5%. Resident worldwide income; non-residents taxed at 20% flat withholding on Indonesia-source income.
PIT Progressive; Social Insurance 8% + Health 1.5% Employee
Vietnam PIT: progressive 5–35% on employment income. Family deduction VND 11M/month taxpayer + VND 4.4M/month per dependent. Social insurance 8% employee. Health insurance 1.5% employee. Unemployment insurance 1%. Total employee burden: ~10.5%. Residents taxed on worldwide income; non-residents at 20% flat on Vietnam-source income.
At $50,000 / IDR 775M / VND 1.25B income:
At $50,000 equivalent: Indonesia effective rate ~21% (including BPJS contributions). Vietnam effective rate ~24% (including 10.5% social insurance). Difference primarily driven by Vietnam's higher social insurance rate. Both countries represent moderate-tax SE Asian options — significantly cheaper than Singapore or Japan.
| Income | ID Tax | VN Tax | Savings | 10-Year |
|---|---|---|---|---|
| $20,000 / IDR 310M / VND 500M | ~IDR 48M Indonesia (15.5% effective inc. BPJS) | ~VND 65M Vietnam (13% effective after deductions) | Similar; Vietnam marginally lower at this level | Both countries: low cost of living makes dollar savings very efficient |
| $50,000 / IDR 775M / VND 1.25B | ~IDR 163M Indonesia (21% effective) | ~VND 300M Vietnam (24% effective) | Indonesia ~3% lower effective rate | Vietnam: higher social insurance burden at this level |
| $100,000 / IDR 1.55B / VND 2.5B | ~IDR 390M Indonesia (25.2% effective) | ~VND 740M Vietnam (29.6% effective) | Indonesia ~4.4% lower effective rate | Indonesia 4-year expat exemption may fully eliminate foreign income tax |
| $200,000 / IDR 3.1B / VND 5B | ~IDR 840M Indonesia (27.1% effective) | ~VND 1.7B Vietnam (34% effective) | Indonesia ~7% lower effective at high income | Indonesia still benefits from PTKP threshold even at high income |
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Hire or Get Hired Globally →Indonesia: Yes — Indonesia introduced the Digital Nomad Visa (E30G) in 2023, targeting remote workers earning foreign-source income. The visa allows stays of up to 60 days (extendable). More significantly, Bali's regional tourism authorities actively support digital nomad communities. For longer stays: Indonesia's KITAS (temporary stay permit) with sponsored employer or business can work for those setting up Indonesia-based companies. Vietnam: No formal digital nomad visa exists. Foreign workers typically use tourist e-visas (90 days) extended, or business visas. Working on a tourist visa is technically prohibited but widely practiced. For legal work: a work permit (GIAY PHEP LAO DONG) and temporary residence card are required, which requires employer sponsorship. Both countries are evolving their digital nomad frameworks — check current embassy requirements.
For a regional holding company or operating entity: Singapore remains the preferred jurisdiction (17% corporate tax, extensive DTA network, no withholding on dividends paid to non-residents). Between Indonesia and Vietnam: Indonesia is generally preferred for larger consumer market access (270M population; Tokopedia/Shopee ecosystem); Vietnam for manufacturing, export, and technology outsourcing. Corporate tax comparison: Indonesia 22% standard rate (10% reduced for listed companies; 11% for SMEs); Vietnam 20% standard (17% for SMEs; 10–15% for qualifying high-tech/priority sectors). Both countries have FDI incentive frameworks. Indonesia's Omnibus Law (2020) improved ease of doing business; Vietnam actively competes for FDI in manufacturing (Samsung, LG, Intel have major Vietnam operations).