Is the mid-shift meal allowance subject to personal income tax in Vietnam?

Is the mid-shift meal allowance subject to personal income tax in Vietnam?

Pursuant to point g.5, clause g, section 2, Article 2 of Circular 111/2013/TT-BTC stipulating as follows:

Taxable Income Items

Pursuant to Article 3 of the Personal Income Tax Law and Article 3 of Decree No. 65/2013/ND-CP, taxable personal income includes:

....

2. Income from wages and salaries

....

g.5) Mid-shift meal expenses, lunch organized by the employer for employees in forms such as direct cooking, buying meals, providing meal vouchers.

In cases where the employer does not organize mid-shift or lunch meals but provides money to employees, it is not counted towards the taxable income of the individual if the expense complies with the guidance of the Ministry of Labor, Invalids and Social Affairs. If the amount exceeds the guidance of the Ministry of Labor, Invalids and Social Affairs, the excess amount must be included in the individual’s taxable income.

The specific amount applied to state-owned enterprises and organizations under administrative agencies, the Communist Party, unions, and associations shall not exceed the guidance of the Ministry of Labor, Invalids and Social Affairs. For non-state enterprises and other organizations, the amount is determined by the head of the unit in agreement with the union president but shall not exceed the amount applied to state-owned enterprises.

....

Therefore, according to the regulations mentioned above, the mid-shift meal allowance, when organized by the employer for the employee in forms such as direct cooking, buying meals, or providing meal vouchers, is not counted toward taxable personal income.

Furthermore, if the employer does not organize mid-shift meals but provides money to the employee, it is not counted toward the individual's taxable income if the expense complies with the guidance of the Ministry of Labor, Invalids and Social Affairs. If the amount exceeds, the excess must be included in the individual’s taxable income.

Is the mid-shift meal allowance subject to personal income tax in Vietnam? (Image from the Internet)

Is the mid-shift meal allowance subject to social insurance in Vietnam?

According to clause 3, Article 30 of Circular 59/2015/TT-BLDTBXH as amended by clause 26, Article 1 of Circular 06/2021/TT-BLDTBXH on the monthly salary for compulsory social insurance contributions as follows:

Monthly Salary for Compulsory Social Insurance Contributions

....

3. The monthly salary for compulsory social insurance contributions does not include policies and other benefits such as bonuses as stipulated in Article 104 of the Labor Code, initiative bonuses; mid-shift meals; allowances for fuel, phone, travel, housing, child care, and small child upbringing; support when the employee has a family member died, a family member marries, the employee's birthday, allowances for employees in difficult circumstances due to a work accident, occupational diseases, and other allowances and allowances separately stated in the labor contract specified in point c2, clause c, section 5, Article 3 of Circular No. 10/2020/TT-BLDTBXH..”

Thus, based on the regulations, the mid-shift meal allowance will not be included in the monthly salary for social insurance contributions.

What is the maximum amount of the mid-shift meal allowance provided by employers in Vietnam?

Based on clause 4, Article 22 of Circular 26/2016/TT-BLDTBXH guiding the management of labor, salary, and bonuses for employees in a single-member limited liability company with 100% charter capital held by the State:

Effectivity

1. This Circular takes effect from October 15, 2016. Policies stipulated in this Circular are applied from January 1, 2016.

2. Circular No. 18/2013/TT-BLDTBXH dated September 9, 2013, of the Ministry of Labor, Invalids and Social Affairs on guiding the management of labor, salary, and bonuses for employees in single-member limited liability companies wholly owned by the State shall cease effect as of the effective date of this Circular.

3. Companies that have approved the planned salary fund for 2016 before this Circular takes effect must review the determination of the planned salary fund for 2016 as a basis to determine the actual salary fund for 2016 according to the provisions of this Circular.

4. Companies shall implement mid-shift meal expenses for employees not exceeding 730,000 VND/person/month. The mid-shift meal policies shall be implemented following Circular No. 22/2008/TT-BLDTBXH dated October 15, 2008, of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of mid-shift meal policies in state companies.

5. The Parent Company - Military Telecommunications Group shall continue to apply the pilot salary management for employees in accordance with the Government of Vietnam’s regulations.

In addition, point g.5, clause g, section 2, Article 2 of Circular 111/2013/TT-BTC is stipulated as follows:

Taxable Income

According to Article 3 of the Personal Income Tax Law and Article 3 of Decree No. 65/2013/ND-CP, taxable personal income includes:

....

2. Income from salaries and wages

....

g.5) Mid-shift meal or lunch expenses organized by the employer for employees in forms such as direct cooking, buying meals, meal vouchers.

If the employer does not organize mid-shift or lunch meals but provides money to employees, it is not included in the individual’s taxable income if the amount complies with the guidance of the Ministry of Labor, Invalids and Social Affairs. If the amount exceeds the guidance, it must be included in taxable income.

Specific amounts applied to state-owned enterprises and organizations within administrative agencies, the Communist Party, unions, associations must not exceed the guidance of the Ministry of Labor, Invalids and Social Affairs. For non-state enterprises and other organizations, the amount is decided by the unit head in agreement with the union president but must not exceed the amount applied to state-owned enterprises.

....

The mid-shift meal allowance for employees in a single-member limited liability company with 100% charter capital held by the State is a maximum of 730,000 VND/person/month. For non-state enterprises and other organizations, the amount is decided by the head of the unit in agreement with the union president but must not exceed the amount applied to state-owned enterprises. Thus, employees will be paid a mid-shift meal allowance of a maximum of 730,000 VND/person/month.