Vietnam tax decree offers 5‑year income‑tax exemption for AI and semiconductor workers

Effective 1 July 2026, Vietnam’s Decree 253/2026 NĐ‑CP on personal income tax introduces a five‑year exemption from personal income tax for workers engaged in artificial‑intelligence, semiconductor and other high‑tech digital projects. The exemption applies to both Vietnamese citizens and foreign specialists whose income derives from projects in designated digital‑technology zones, R&D programmes, or strategic‑technology lists such as AI, big data, cloud computing, IoT, chips and quantum tech. Eligibility is limited to wages and salaries and lasts for five consecutive years from the month the qualifying income is earned.

The decree also revises several other tax rules: the threshold for a 10 % withholding tax on ad‑hoc payments is raised to VND 5 million per payment; taxpayers can submit a commitment to the payer to avoid immediate withholding when total taxable income remains below the filing threshold. Meals provided by employers are exempt from tax if they do not exceed VND 1.2 million per employee per month, up from the previous VND 730 000 limit. The maximum deductible contribution to voluntary pension funds is increased to VND 3 million per month. Severance payments that exceed statutory limits are not taxed if covered by internal company policies. These measures aim to attract and retain high‑skill tech talent and improve overall compensation incentives in Vietnam’s burgeoning digital economy.