PERSONAL INCOME TAX-EXEMPT EMPLOYMENT INCOME

Pursuant to Decree No. 253/2026/ND-CP and Circular No. 87/2026/TT-BTC, the following types of employment income are exempt from Personal Income Tax (PIT):

1. Wages and Salaries for Night Work and Overtime

Wages and salaries paid to employees for night work and overtime work in accordance with the provisions of the labor laws are exempt from Personal Income Tax (PIT).

To qualify for the PIT exemption, employers must satisfy the following conditions:

• Overtime work must be arranged in compliance with the Labor Code and with the employee's consent, except for cases otherwise provided by law.
• The employer must separately identify and keep records of the wages and salaries paid for night work and overtime.

Under the Labor Code:

Night working hours:

• From 10:00 p.m. to 6:00 a.m. of the following day.

Overtime limits:

• No more than 50% of the normal working hours in one day (for enterprises applying daily working hours).
• Where weekly working hours are applied, the total normal working hours and overtime must not exceed 12 hours per day.
• No more than 40 overtime hours per month.
• No more than 200 overtime hours per year, except for certain industries, occupations, and special cases where employees may work up to 300 overtime hours per year in accordance with Government regulations.

Note: Where wages or salaries for night work or overtime are paid in excess of the levels prescribed under labor laws, the excess amount remains subject to Personal Income Tax.

2. Payment for Unused Annual Leave

Wages and salaries paid in respect of unused annual leave are exempt from PIT where such payments are made in accordance with the Labor Code upon termination of the labor contract or in other cases where payment for unused annual leave is permitted by law.

3. Income of Seafarers Engaged in International Shipping

The following income is exempt from PIT:

Wages and salaries earned by Vietnamese seafarers working for:

• Foreign shipping companies; or
• Vietnamese shipping companies engaged in international maritime transportation.

4. Income of Experts and Personnel Working for International Projects and Organizations

PIT is exempt on employment income earned by individuals eligible for tax incentives under international treaties or Government regulations, including:

• Vietnamese or foreign experts working for programs and projects funded by Official Development Assistance (ODA) in accordance with applicable regulations;
• Individuals working at Representative Offices of United Nations organizations in Vietnam;
• Individuals participating in United Nations peacekeeping missions under decisions of competent Vietnamese authorities.

5. Compensation for Occupational Accidents and Diseases

The following compensation or allowances are exempt from PIT:

• Compensation paid by the employer in accordance with labor laws;
• Benefits paid by the Social Insurance Fund in accordance with social insurance regulations,

where such payments arise from occupational accidents or occupational diseases.

6. Income of High-Quality Human Resources in the Digital Technology Sector

Employment income earned by high-quality professionals who directly participate in investment projects located in concentrated digital technology parks is exempt from PIT, provided that all statutory conditions are satisfied.

The PIT exemption may be granted for up to five (05) years from the date on which the individual becomes eligible under applicable regulations.

7. Income of Sole Proprietors and Owners of Single-Member Limited Liability Companies

The following income is exempt from PIT:

• Income received by the owner of a sole proprietorship; and
• Income received by an individual who is the owner of a single-member limited liability company,

after the enterprise has fully fulfilled its Corporate Income Tax (CIT) obligations in accordance with Vietnamese tax laws.

This income is exempt from Personal Income Tax in order to prevent double taxation of the same income at both the corporate and individual levels.