1. Issuance and Background

On 30 June 2026, the Government issued Decree No. 253/2026/NĐ-CP, detailing certain articles and implementing measures of the 2025 Personal Income Tax (PIT) Law, taking effect simultaneously with the new PIT Law from 1 July 2026. The Decree devotes an entire chapter to tax-exempt income, formally listing 22 categories of income exempt from PIT.

2. Key Changes Compared to Prior Regulations

The Decree both preserves long-standing exemptions aimed at social welfare (income from the transfer of an individual’s sole residential property; real estate transfers between family members; pension income; unprocessed or minimally processed agricultural, forestry, and aquaculture income) and introduces several entirely new exemption categories targeting priority development sectors:

• Salaries, wages, and copyright income of individuals performing science, technology, and innovation tasks (whether state-budget funded or enterprise-funded).
• Capital investment income of individuals investing in innovative start-ups, start-up enterprises, or venture capital funds; and income of experts supporting start-up innovation.
• Dividend income of agricultural cooperative members and farmers participating in “large-scale field” contract farming, production forestry, and aquaculture models.
• Income of private business owners and owners of single-member limited liability companies.

Compared to the previous framework under the 2007 PIT Law (as amended) and its implementing guidance, the scope of exemptions has been significantly expanded, with a clear policy shift toward promoting science and technology, green transition, and start-up innovation.

3. Amended or Superseded Legal Instruments

Decree 253/2026/NĐ-CP replaces prior decrees and circulars implementing the PIT Law, to the extent consistent with the scope of the 2025 PIT Law. It also cross-references related instruments for consistent application, including Decree No. 181/2025/NĐ-CP (on value-added tax) for determining minimally processed agricultural products, and Decree No. 265/2025/NĐ-CP (on finance and investment in science, technology and innovation) for determining exempt remuneration for science and technology tasks.

4. Effective Date and Transitional Guidance

The Decree takes effect from 1 July 2026, concurrently with the 2025 PIT Law. For income arising before 1 July 2026, tax exemption treatment follows the law in effect at the time the income arose. Taxpayers and income-paying organizations should carefully determine the timing of the tax obligation to apply the correct legal basis during this transitional period, avoiding confusion between old and new rules.

5. Practical Notes for Businesses and Taxpayers

• For many exempt income categories, taxpayers must satisfy the statutory conditions and retain supporting documentation (task approval decisions, research contracts, acceptance minutes, etc.) as evidence for claiming the exemption.
• Enterprises carrying out science and technology tasks not funded by the state budget must establish a research-task management process and maintain complete records to qualify their employees’ income for exemption.
• Exemption for a sole residential property is based on the individual’s self-declaration and self-responsibility; inaccurate declarations will result in tax collection and penalties.
• Income-paying organizations should update their withholding practices to reflect the 22 exemption categories, to avoid over- or under-withholding tax.