Uni 06-07-2026 - Some new points regarding personal income tax

Some new points of Decree 253/2026/ND-CP on personal income tax::

1. Mid-shift meal allowances and lunch allowances under VND 1.2 million are tax-exempt 

Previously, according to Decree 65/2013/ND-CP and guidance in Circular 26/2016/TT-BLDTBXH, the maximum mid-shift meal allowance was VND 730,000/person/month. However, this regulation has been abolished according to Circular 03/2025/TT-BNV.

From July 1st, 2026, according to Article 8 of Decree 253/2026/ND-CP, if an employer provides lunch or mid-shift meal allowances for employees, only the portion exceeding VND 1.2 million per employee per month will be subject to personal income tax..

If the meal is provided through other forms such as direct cooking, purchasing meal sets, or providing meal vouchers, this benefit will not be included in the employee's taxable personal income.

Thus, the new regulation has raised the mid-shift meal allowance to VND 1.2 million per person per month, an increase of approximately 1.64 times compared to the previous VND 730,000, to reflect fluctuations in income and prices

At the same time, the principle of not taxing mid-shift meals remains unchanged.

Benefits from housing built by the employer are not taxable, regardless of location

Regarding housing, electricity, water, and related services (if any) paid by the employer to the employee, point h, clause 2, Article 8 of Decree 253 states:

In cases where an employee benefits from housing built by the employer for the employee working at the unit, this benefit, including electricity, water, and related services (if any), is not included in the employee's taxable personal income.

Previously, Decree 65/2013 only exempted personal income tax on benefits related to housing, electricity, water, and related services (if any) for housing built by employers to provide to employees working in industrial zones, or housing built by employers in economic zones, areas with difficult socio-economic conditions, or areas with particularly difficult socio-economic conditions for employees.

Furthermore, according to Decree 253/2026, if the employer pays for housing rent, electricity, water, and related services (if any), the amount paid is included in the taxable income of the individual, but not exceeding 15% of the employee's total taxable income generated at the unit, excluding housing rent, electricity, water, and related services (if any).

3. Excess severance pay is not taxable if there is an internal regulation

This is a new regulation in point h, clause 3, Article 8 of Decree 253, specifically:

If an organization or enterprise has specific regulations in its financial regulations, internal regulations, labor contract, or collective bargaining agreement regarding severance pay or unemployment benefits exceeding the legally prescribed amount, the actual amount paid in excess will not be included in the taxable income of the employee.

Previously, only unemployment benefits and severance pay as stipulated in the Labor Code and the Social Insurance Law were exempt from personal income tax; the excess amount was still taxable.

4. Increasing the Maximum Deduction for Voluntary Pension Fund Contributions

According to point a, clause 2, Article 46 of Decree 253, the maximum deduction from total income from salaries and wages for these insurance contributions is no more than 3 million VND/month, including both the amount contributed by the employer for the employee and the amount contributed by the employee themselves (if any) for calculating personal income tax..

Previously, Decree 65/2013 only stipulated a maximum of 1 million VND/month.

5. Additional Taxable Income for Other Income

These are all new income items subject to personal income tax, added to the Personal Income Tax Law 2025. Specifically, Article 16 of Decree 253 provides guidance on the following::

- Income from the transfer of Vietnamese national domain names “.vn” is income received from transferring the right to use Vietnamese national domain names “.vn” to other organizations or individuals.

- Income from the transfer of greenhouse gas emission reduction results and carbon credits of individuals owning such results, except for income from the first transfer of greenhouse gas emission reduction results and carbon credits of individuals who have been granted or recognized such results.

- Income from the transfer of vehicle license plates won through auction according to the law.

- Income from the transfer of digital assets includes virtual assets, crypto assets, and other digital assets as stipulated by the law on the digital technology industry.

6. Raising the 10% tax deduction threshold for incidental income to VND 5 million/transaction

Compared to the previous regulations in Decree 65/2013, the Government has adjusted the income threshold to be used as the basis for tax deduction..

Specifically, according to Clause 2, Article 50 of Decree 253/2026/ND-CP:

Organizations and individuals paying salaries, wages, fees, or other payments to resident individuals who do not have a contract or have a labor contract of less than 3 months (including cases of paying salaries and other income to employees whose labor contracts have been terminated) with an income payment of 5 million VND or more per payment must deduct tax and pay the deducted tax amount at a rate of 10% on the income before paying the income to the individual.

In cases where the income payment amount is less than 5 million VND per payment, the organization or individual paying the income may deduct tax at a rate of 10% upon the individual's request.

In cases where an individual only has income subject to tax withholding at the aforementioned rate, but the estimated total taxable income after personal deductions is below the tax threshold, the individual with income may submit a commitment (using the form issued with the tax management guidance document) to the income-paying organization. This commitment will serve as a basis for the income-paying organization to temporarily refrain from withholding personal income tax.

7. Individuals are entitled to a maximum deduction of VND 47 million/year for medical and educational expenses.

This is a completely new policy in Clause 2, Article 49 of Decree 253/2026/ND-CP, specifically:

Individual taxpayers residing in Vietnam are entitled to a deduction from their taxable income before calculating tax on income from salaries and wages for expenses related to healthcare and education/training for the taxpayer and their dependents, including:

- Expenses for medical examination and treatment at domestic medical facilities within the scope of the list covered by health insurance, totaling no more than VND 23 million/year;
- Expenses for education and training at domestic educational institutions totaling no more than 24 million VND/year, specifically: Tuition fees for preschool education, general education, vocational education, and higher education as prescribed by law on education and training, and other professional skills training at educational institutions.
The deductible expenses must meet the following conditions:
- There must be invoices and supporting documents as prescribed by law; for medical expenses, a list of medical examination and treatment costs incurred at medical facilities as prescribed by the Minister of Health must also be provided;
- The invoices and supporting documents for deduction must show the information of the taxpayer or their dependents;
- Payments from other sources are not permitted, including those from sponsorships, support, or payments made by organizations or individuals, state budget funds, social insurance funds, health insurance funds, or insurance payments in any form.
8. Exemption from personal income tax for wages and salaries paid for non-leave days
This is a new regulation in Article 26 of Decree 253:
- Exemption from personal income tax for wages and salaries paid for non-leave days in accordance with the regulations on conditions and levels of wages and salaries paid for non-leave days as stipulated in Clause 3, Article 113 of the Labor Code and the provisions of the Law on Civil Servants and the Law on Public Employees.
- In cases where wages and salaries paid for non-leave days exceed the legally prescribed limit, the excess amount shall be included in the taxable income of the individual.
Previously, Decree 65/2013 did not have this regulation.
9. Tax Exemption for the Transfer of Open-Ended Fund Certificates
Article 43 of Decree 253 stipulates the tax exemption for the transfer of open-ended fund certificates as follows:
- Personal income tax is exempted on income from the transfer of open-ended fund certificates established under securities law, provided that at the time of sale, the certificate has been held for at least two years from the date of purchase.
- In cases where an individual owns open-ended fund certificates purchased before July 1, 2026, and transfers them from July 1, 2026 onwards, they are exempt from personal income tax when transferring those certificates if they have held them for at least two years from the date of purchase.
- In cases where an individual transfers fund certificates purchased at different times, the two-year holding period mentioned above is determined according to the principle that the certificate purchased first is considered the first to be sold.
This is a new regulation, not previously stipulated in Decree 65/2013 or any earlier documents.
10. Guidance on applying the law for tax declaration before and after July 1, 2026
Article 70 of Decree 265 stipulates the following transitional provisions:
- The deadline for registering dependents and the deadline for submitting supporting documents for dependents for tax periods of 2025 and earlier shall be implemented according to the regulations in legal documents on personal income tax before July 1, 2026.

- Cases where taxes on income from salaries and wages for the tax period of 2026 have been declared and paid between January 1, 2026 and before July 1, 2026, according to the regulations in legal documents on personal income tax applicable before July 1, 2026, do not need to resubmit monthly or quarterly tax declarations but should make adjustments in the 2026 annual tax finalization declaration.