The Ministry of Finance is currently seeking public comments on a draft Decree detailing a number of provisions of the Personal Income Tax (PIT) Law 2025. Notably, the draft introduces a proposed change regarding mid-shift meal allowances.
Under the proposal, mid-shift or lunch allowances paid by employers to employees in excess of VND 1.2 million per person per month will be subject to PIT from 2026.
Specifically, pursuant to Point g, Clause 2, Article 8 of the draft Decree, where companies do not provide meals directly (e.g., through in-house catering, purchased meal portions, or meal vouchers) but instead provide cash allowances, any amount exceeding VND 1.2 million per person per month will be treated as taxable income of the employee.
Under current regulations, there is no fixed cap on cash-based meal allowances. Employers are permitted to determine appropriate allowance levels, provided such amounts are clearly stipulated in labor contracts, collective labor agreements, or internal policies. Any portion exceeding these stipulated levels is treated as taxable income for PIT purposes. However, the absence of a specific cap has created practical challenges in determining reasonable allowance levels. Accordingly, the draft Decree proposes a threshold of VND 1.2 million per person per month as a basis for PIT calculation.
