Comprehensive summary of new regulations on Social Insurance, Personal Income Tax, and Electronic Invoices (Effective from July 1, 2026)

Author: RBox | Category: News & Events

1. Social Insurance Participation Policy for Household Businesses

In accordance with Official Dispatch No. 2220/BHXH-QLT issued by Vietnam Social Security, the criteria for insurance participation for individual household businesses have been clearly adjusted:

- Household business owners with an annual revenue of less than 1 billion VND (applicable under the declaration method) will not be subject to compulsory Social Insurance participation.

- However, the law still encourages and allows this group to participate in voluntary Social Insurance if they wish to accumulate for their future.

2. A series of changes regarding personal income tax (PIT)

New Tax Exemption Limit for Lunch Allowances

Decree 253/2026/ND-CP (Point g, Clause 2, Article 8) has eliminated the concept of "unlimited exemption based on business expenditure" for mid-shift meal allowances.

- The PIT exemption ceiling for lunch allowances is now fixed at a maximum of 1,200,000 VND/person/month.

- Any payment exceeding this 1.2 million VND must be added to the employee's taxable income for PIT purposes.

Raising the 10% PIT Deduction Threshold

Based on Clause 2, Article 50 of Decree 253/2026/ND-CP, the tax deduction policy for individuals who do not sign a labor contract or sign a contract of less than 3 months has undergone a major change:

- Starting from July 1, 2026, businesses are only required to deduct a 10% tax if the income payment is from 5 million VND/time or more, a significant increase compared to the old regulation of 2 million VND/time.

- For payments under 5 million VND/time, the 10% deduction is only carried out at the explicit request of the income-receiving individual.

- The 10% deduction rule for payments from 5 million VND/time or more also applies similarly to salaries, bonuses, or other income paid to officially resigned employees (terminated labor contracts), even if they previously paid tax according to the progressive schedule.

Regulations on the Deadline for Submitting Dependent Profiles

To create consistency in family circumstance deductions, Clause 2, Article 48 of Decree 253/2026/ND-CP requires taxpayers to complete registration and submit dependent proof profiles before December 31 of that tax year. This regulation applies generally to all deductible subjects such as children, parents, grandparents, aunts, and uncles.

Tax Exemption Policy for Overtime and Night Shift Income

- According to Article 26 of Decree 253/2026/ND-CP, the additional income generated from working night shifts or overtime in accordance with the Labor Code will be fully exempt from PIT.

- The valid overtime limits (based on Article 107 of the 2019 Labor Code) are: A maximum of 4 hours/day (total working hours not exceeding 12 hours/day), not exceeding 40 hours/month, and 200 hours/year (specific industries such as textiles and electronics are allowed a maximum of 300 hours/year).

- To validate this tax exemption, businesses must maintain complete documentary records, including timesheets, overtime calculation sheets, and relevant supporting documents.

3. New regulations on electronic invoices and tax management

Supplemental Guidelines for the 2025 Law on Tax Administration

Through Decree 252/2026/ND-CP, the Government has supplemented a series of specialized management regulations, including: the electronic tax declaration mechanism, tax management methods for digital platforms, procedures for handling supplementary declaration profiles, tax management for household businesses, and solutions for overpaid tax amounts.

Updates on the Timing of Issuing Electronic Invoices (Decree 254/2026/ND-CP)

- Deposit transactions: Businesses are not required to issue electronic invoices when merely receiving a deposit or a service contract guarantee. Invoices are only issued when the service is completed or when collecting advance payment for a partially completed service where revenue can be determined.

- Construction and installation sector: The mandatory time to issue an invoice is upon the handover and acceptance of the project or construction item, regardless of whether the contractor has collected payment from the customer.

- Handling after-hours transactions: In cases where a business is not equipped with a 24/7 automated invoicing software system, if a transaction occurs at night, on weekends, or outside of working hours, the entity is permitted to issue the invoice no later than the next working day.

Conclusion

In summary, the new series of regulations on Social Insurance, PIT, and Electronic Invoices effective from July 1, 2026, will directly impact the accounting work and operational processes of all businesses. To optimize costs and avoid unnecessary legal risks or penalties, accountants as well as business owners need to proactively update, review their documentation systems, and adjust internal policies to ensure accurate and timely compliance.