Exchange Rates for Converting Foreign-Currency Taxable Income for PIT Purposes from 1 July 2026

From 1 July 2026, the rules for converting foreign-currency income into Vietnamese Dong for personal income tax (PIT) purposes have become more flexible for businesses, while the applicable exchange rate where no bank account is maintained in Vietnam has changed entirely. These changes directly affect all enterprises paying salaries in foreign currency to experts and foreign employees - particularly where remuneration is split between an overseas parent company and a company in Vietnam.

1. Two cases for applying exchange rates

The conversion principles are set out in Clause 1, Article 17 of Decree No. 253/2026/ND-CP (issued on 30 June 2026 and effective from 1 July 2026). Previously, these principles were provided in Article 5 of Circular No. 111/2013/TT-BTC (as amended by Article 13 of Circular No. 92/2015/TT-BTC).

Case 1 - A bank account is maintained in Vietnam

Apply the buying exchange rate of a commercial bank at either of the following:

The second option has significant practical value: an enterprise may choose between two relevant banks rather than being required to use each employee’s bank as before. For enterprises with many experts maintaining accounts at different banks, this provides a basis for applying a single, consistent exchange rate.

Case 2 - No bank account is maintained in Vietnam (new)

Apply the central exchange rate of the Vietnamese Dong against the US Dollar, or the cross rate of the Vietnamese Dong against certain other foreign currencies, as published on the website of the State Bank of Vietnam (Clause 1, Article 17 of Decree No. 253/2026/ND-CP).

The previous rules prescribed Vietcombank’s buying exchange rate.

2. Practical scenario: salary paid from two sources

At an online Q&A session on tax and customs policies for Korean businesses held on 23 July 2026, the tax authority addressed a case in which a foreign expert received salary in two parts: one paid into a bank account opened in Vietnam, and the other remitted by the parent company to an account in the expert’s home country.

Recommended treatment: consistently apply the principles under Article 17 of Decree No. 253/2026/ND-CP. Any portion of income for which either the individual or the payer maintains an account in Vietnam should be converted using the corresponding commercial bank’s buying exchange rate; any portion for which neither the payer nor the individual maintains an account in Vietnam should be converted using the central exchange rate or the State Bank of Vietnam’s cross rate.

💡 Recommendations for Businesses

1. Establish an internal exchange-rate policy: consider using the new option - the company’s paying bank rather than each employee’s bank - and document it clearly in the finance or payroll policy to ensure consistent application and provide supporting justification during audits or inspections.
2. Review payroll periods from July 2026: make adjustments if Vietcombank’s exchange rate is still being applied to income not paid through a bank account in Vietnam.
3. Separate income by payment source for experts receiving remuneration from multiple sources, as each portion may be subject to a different exchange rate.
4. Incorporate the State Bank of Vietnam’s exchange-rate source into the document-retention process: retain extracts of the central exchange rate and cross rates for each payment date.

This newsletter has been prepared by Crowe Vietnam for general information purposes only and does not constitute advice for any specific case. Businesses should consult the original legal instruments and seek professional advice before applying the information to their particular circumstances.