Compare taxes and see how much you save moving from Vietnam to China
Vietnam and China are two of Asia's most significant manufacturing and investment destinations β and increasingly compared by multinationals and expat professionals as Vietnam has rapidly grown as a China+1 alternative. Vietnam's PIT (5β35%) combined with VSS social insurance contributions (~10.5% employee, capped) produces total effective rates of approximately 30β40% at professional salary levels. China's IIT (3β45%) combined with Five Insurances and Housing Fund (~15.5% employee) produces broadly similar or slightly higher effective rates at comparable incomes. At $80,000β$120,000 equivalent, Vietnam and China produce similar combined burdens, with Vietnam marginally cheaper at lower incomes due to VSS caps being reached earlier. The critical differences are structural: China's 6-year foreign income exemption rule is a major planning tool for shorter-term assignments; Vietnam's rapidly growing economy and lower cost base make it increasingly attractive for manufacturing, tech, and regional roles.
Top Rate (above VND 960M/yr)
VSS employee ~10.5% (pension 8% + health 1.5% + unemployment 1%); contributions capped
Top Rate (above CNY 960,000)
Five Insurances + Housing Fund ~15.5% employee; 6-year foreign income rule
At $80,000 income:
That is $250/month back in your pocket!
| Income | VN Tax | CN Tax | Savings | 10-Year |
|---|---|---|---|---|
| $40,000 (~VND 1B / ~CNY 288K) | ~VND 224M PIT (~22%) + ~VND 105M VSS (~10.5%, partially capped) = ~VND 329M (~33%) | ~CNY 52,500 IIT + ~CNY 44,640 social = ~CNY 97,140 (~34%) | Similar (within 1β2%) | $10,000 |
| $60,000 (~VND 1.5B / ~CNY 432K) | ~VND 390M PIT (~26%) + ~VND 117M VSS (capped) = ~VND 507M (~34%) | ~CNY 96,000 IIT + ~CNY 58,320 social = ~CNY 154,320 (~36%) | Vietnam saves ~$2,000 | $20,000 |
| $80,000 (~VND 2B / ~CNY 576K) | ~VND 584M PIT (~29%) + ~VND 117M VSS (capped) = ~VND 701M (~35%) | ~CNY 113,000 IIT + ~CNY 71,000 social = ~CNY 184,000 (~32%) | Vietnam saves ~$3,000 | $30,000 |
| $120,000 (~VND 3B / ~CNY 864K) | ~VND 965M PIT (~32%) + ~VND 117M VSS (capped) = ~VND 1,082M (~36%) | ~CNY 200,000 IIT + ~CNY 80,000 social (capped) = ~CNY 280,000 (~32%) | Similar β China slightly better at higher incomes | $10,000 |
| $200,000 (~VND 5B / ~CNY 1.44M) | ~VND 1,750M PIT (~35%) + ~VND 117M VSS (capped) = ~VND 1,867M (~37%) | ~CNY 390,000 IIT + ~CNY 88,000 social (capped) = ~CNY 478,000 (~33%) | China saves ~$8,000 at high incomes | China better at this level |
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Hire Compliantly in Vietnam or China βVietnam's Personal Income Tax uses seven progressive brackets for employment income: 5% up to VND 60M/year; 10% from VND 60Mβ120M; 15% from VND 120Mβ216M; 20% from VND 216Mβ384M; 25% from VND 384Mβ624M; 30% from VND 624Mβ960M; and 35% above VND 960M/year (approximately $38,400 USD at current rates). Foreign nationals who are Vietnamese tax residents (physically present 183+ days in a tax year, or with a permanent address in Vietnam) are taxed on worldwide income using these rates. Non-residents pay a flat 20% on Vietnam-source income. Personal deductions: VND 11M/month for the individual plus VND 4.4M/month for each dependent. Employers withhold monthly; residents file an annual settlement return.
Under Chinese IIT law, foreign nationals who have been Chinese tax residents for fewer than 6 consecutive years generally pay IIT only on China-source income. Non-China-source income not remitted to China is exempt. Once a foreign national completes 6 consecutive years of Chinese tax residency without a qualifying break, they become liable for IIT on worldwide income. To reset the 6-year clock: the individual must either leave China for 31+ consecutive days in a single trip, or spend 91+ days outside China in total in a calendar year. This rule drives many long-term expats and multinationals to carefully plan annual absence from China. In practice: expats on 2β4 year assignments typically have no issue; those on longer placements need deliberate break-planning in year 5.
Yes β since January 2018, foreign workers employed under Vietnamese labour contracts are required to participate in Vietnam's social insurance scheme (VSS). Employee contributions: compulsory social insurance (pension + death benefit) 8%, health insurance 1.5%, unemployment insurance 1% β total 10.5%. These apply on salary up to 20Γ the base minimum wage per month, which is approximately VND 46.8M/month (VND 561.6M/year = approximately $22,400 USD annually at current rates). Above this ceiling, no VSS is payable on the incremental salary. Foreigners working in Vietnam under intra-company transfer or business visitor arrangements (under specific conditions) may be exempt β the VSS requirement applies specifically to those with Vietnamese employment contracts.
China remains the global manufacturing hub by scale β the world's largest factory ecosystem, sophisticated supply chains, and unmatched infrastructure. For manufacturing professionals in electronics, automotive, and heavy industry, China provides the deepest career ecosystem. Vietnam is the leading China+1 destination β Samsung (world's largest smartphone factory in Vietnam), Intel, LG, and Apple supplier networks have established major production in northern Vietnam (Hanoi/Bac Ninh). Ho Chi Minh City is the commercial hub. For expats specifically: Vietnam offers a lower tax burden at mid-income levels (particularly due to VSS caps), lower cost of living, and a less complex regulatory environment for foreign professionals. Compensation levels are rising rapidly. For a 2β4 year assignment in supply chain or manufacturing, Vietnam increasingly competes with China on both economics and career development.
US citizens in both countries must file US federal returns on worldwide income. China: the US-China tax treaty provides for elimination of double taxation; FTC applies for Chinese IIT paid. At mid-professional salaries, China's effective rates (32β36%) typically cover or approximate US liability. FBAR required for accounts over $10,000. Vietnam: the US-Vietnam bilateral investment treaty and income tax arrangements apply; Vietnam's rates at mid-incomes (33β36%) provide meaningful FTC offset against US tax. Non-resident treatment in either country (under 183 days) produces lower local tax but potentially lower FTC, leaving higher residual US tax. For professionals on rotating assignments between Vietnam and China (common in supply chain roles), careful day-counting and treaty analysis is essential β specialist US expat preparation is strongly recommended.