Vietnam AI Law: Game-Changing Talent Incentive

On March 15, 2026, Vietnam's Law on Artificial Intelligence took effect, establishing a comprehensive framework for AI development, governance, and workforce incentives. The most impactful provision for employers: 5-year personal income tax (PIT) exemption for qualified AI professionals.

This effectively increases AI professionals' take-home pay by 5-35% (depending on salary level) without increasing employer costs—a powerful retention and recruitment tool in Asia's competitive AI talent market.

Why This Matters: The AI Talent War

Regional Competition for AI Talent

Vietnam competes with Singapore, Hong Kong, and emerging hubs like Indonesia for limited AI expertise:

Singapore AI Salaries:

• Junior ML Engineer: SGD 60,000-90,000 (~VND 1.08B-1.62B)
• Senior ML Engineer: SGD 100,000-150,000 (~VND 1.8B-2.7B)
• AI Architect: SGD 150,000-250,000 (~VND 2.7B-4.5B)

Vietnam AI Salaries (Before AI Law):

• Junior ML Engineer: VND 600M-900M
• Senior ML Engineer: VND 1.2B-1.8B
• AI Architect: VND 2B-3B

Vietnam's base salaries are 40-50% lower than Singapore, but cost of living is also lower. However, top talent still chooses Singapore for higher absolute earnings.

Impact of AI Law PIT Exemption

Example: Senior ML Engineer, VND 1.5B annual salary

Without AI Law:

• Gross: VND 1,500,000,000
• PIT (progressive 5-35%): ~VND 350,000,000
• Take-home: VND 1,150,000,000

With AI Law (5-year exemption):

• Gross: VND 1,500,000,000
• PIT: VND 0
• Take-home: VND 1,500,000,000

Gain: VND 350M annually = VND 1.75B over 5 years (~USD 70,000)

This narrows the Vietnam-Singapore gap significantly, making Vietnam competitive without employers raising gross salaries.

Who Qualifies as an "AI Professional"?

The AI Law defines qualified professionals by role, work content, and employer certification.

Qualifying Roles (Article 12, Vietnam AI Law)

Core AI Development:

• Machine Learning Engineers
• AI Research Scientists
• Deep Learning Specialists
• Natural Language Processing Engineers
• Computer Vision Engineers
• AI Model Training Specialists

AI Infrastructure & Deployment:

• MLOps Engineers
• AI Platform Engineers
• AI Data Engineers (if primarily supporting AI systems)

AI Product Management (conditional):

• AI Product Managers spending >50% time on AI product strategy and roadmap

Work Content Requirement

Employee must spend >50% of working time on AI-related activities:

• Developing AI/ML models
• Training and optimizing algorithms
• Researching AI techniques and applications
• Deploying and maintaining AI systems
• Building AI infrastructure

Does NOT Qualify

• General software engineers occasionally using AI libraries
• Data analysts using AI tools but not building models
• Project managers overseeing AI projects (unless majority time on AI strategy)
• Business roles in AI companies (sales, marketing, HR)
• DevOps engineers supporting AI teams but not building AI systems

Employer Requirements and Process

Step 1: Register as AI Enterprise (If Applicable)

To claim AI professional exemptions, companies should ideally register as "AI Enterprise" with Ministry of Science and Technology.

Criteria (Decree 20/2026/ND-CP):

• Minimum 30% of revenue from AI products/services
• Minimum 10% of workforce in AI roles
• Minimum VND 5B annual investment in AI R&D or infrastructure

Benefits:

• Streamlined PIT exemption approval for AI employees
• Access to other AI Law incentives (R&D grants, priority licensing)
• Corporate Income Tax preferences

Non-AI companies can still claim exemptions: You don't need AI Enterprise status to employ qualified AI professionals, but approval process is more rigorous.

Step 2: Document AI Professional Status

For each employee claiming exemption, maintain:

Job Description:

• Clearly state AI-focused responsibilities
• List specific AI technologies/tools used
• Define deliverables (models, systems, research outputs)

Work Log (monthly):

• Hours spent on AI development activities
• Specific projects and contributions
• Proof of >50% time on qualifying activities

Skills Documentation:

• Relevant degrees (Computer Science, AI, ML, Data Science)
• Certifications (TensorFlow, AWS ML, Azure AI)
• Publication record (if research-focused)
• Portfolio of AI projects

Step 3: Submit to Tax Authorities

Initial Registration (within 30 days of hire or AI Law effective date):

Submit to local tax authority:

1. Application form for AI professional PIT exemption
2. Employee's job description and employment contract
3. Educational qualifications and certifications
4. Company's AI business registration (if AI Enterprise)

Annual Confirmation (by January 31 each year):

Confirm continued qualification:

1. Updated work log demonstrating >50% AI activities
2. Performance review confirming AI responsibilities
3. Any changes to role or focus

Step 4: Implement Payroll Exemption

Once approved:

• Set PIT withholding rate to 0% for qualified employee
• Continue normal social insurance contributions (no exemption)
• Track exemption end date (5 years from approval)
• Report in monthly PIT filings to tax authorities

Maximizing the AI Law Benefit

Strategy 1: Recruitment Positioning

Market the exemption aggressively:

In Job Postings:

• "Take-home salary 20-35% higher due to AI Law PIT exemption"
• Calculate net benefit explicitly: "VND 1.5B gross = VND 1.5B net (5-year exemption)"
• Position as unique Vietnam advantage over regional hubs

In Offer Letters:

• Highlight net earnings vs. gross
• Show 5-year cumulative benefit
• Compare to equivalent Singapore/HK salaries on net basis

Strategy 2: Retention Through Tax Optimization

Use the exemption for retention:

AI Career Path Development:

• Invest in upskilling non-AI engineers to qualify for AI roles
• Create AI specializations within teams
• Transition employees into AI-focused work to trigger exemption

5-Year Commitment Alignment:

• Structure compensation reviews to align with exemption period
• Offer retention bonuses payable in year 5 of exemption
• Time equity vesting with 5-year exemption benefit

Strategy 3: Combine with Training Subsidies

Maximize total benefit by stacking:

AI Law PIT Exemption (for employee)

• 5-year tax savings: VND 200M-500M per employee (depending on salary)

Decree 182 Training Subsidy (for employer)

• 50% reimbursement up to VND 100M per employee annually
• Focus on AI/ML training to qualify

Total Package Value:

• Employee gains VND 200M-500M over 5 years (net salary increase)
• Employer recovers VND 50M annually (VND 250M over 5 years) in training costs
• Combined benefit: VND 450M-750M per AI professional

Example: Train 10 AI engineers

• Training cost: VND 800M (VND 80M each)
• Decree 182 recovery: VND 400M
• Net training cost: VND 400M
• Employee PIT savings over 5 years: VND 3B-5B (across 10 people)
• Total system benefit: VND 3.4B-5.4B

This dramatically improves ROI on AI talent investment.

Strategy 4: International Talent Attraction

Vietnam's AI Law can attract foreign AI professionals:

Target: Overseas Vietnamese (Viet Kieu) AI talent or regional AI professionals

Pitch:

• PIT exemption makes Vietnam net salaries competitive with Singapore/US
• Lower cost of living amplifies purchasing power
• Growing AI ecosystem with Southeast Asian market access

Example: Foreign AI engineer, USD 100k salary expectation

• Vietnam gross: VND 2.4B (USD 100k)
• With AI Law: VND 2.4B net (vs. VND 1.8B net without exemption)
• Singapore equivalent net: ~SGD 80k (VND 1.44B) after tax
• Vietnam advantage: ~40% higher net purchasing power

Common Questions and Compliance

Ongoing Compliance Requirements

Monthly:

• File PIT declarations showing 0% withholding for AI professionals
• Update work logs documenting AI activities

Annually:

• Submit confirmation that employees continue qualifying
• Provide evidence of >50% time on AI work
• Tax audit preparation: maintain full documentation

Every 5 Years:

• Exemption expires; revert to normal PIT withholding
• Can potentially re-qualify if laws extend or renew incentives

Audit Risk Management

Tax authorities may audit AI professional exemptions. Protect yourself:

Strong Documentation:

• Detailed job descriptions clearly focused on AI
• Monthly time logs with specific AI projects listed
• Tangible outputs: models developed, research published, systems deployed
• Peer reviews confirming AI focus

Conservative Application:

• Only claim for clearly qualifying roles
• Don't stretch definitions for marginal cases (general developers)
• Maintain >60% AI time to have buffer above 50% threshold

Professional Advice:

• Consult with tax advisors on classification
• Have HR verify role descriptions meet criteria
• Consider third-party attestation for high-risk cases

What If Employee Changes Roles?

Scenario: AI engineer promoted to engineering manager (non-AI role)

Impact: Exemption ends when employee no longer spends >50% time on qualifying AI activities

Process:

1. Notify tax authorities within 30 days of role change
2. Resume normal PIT withholding from month of change
3. No repayment of previous exemptions (not retroactive)

Planning: If possible, keep AI responsibilities >50% even in management roles to maintain exemption.

What If Company Shifts Away from AI?

Scenario: AI company pivots to non-AI business

Impact: Employees may lose qualification if work content changes

Process:

1. Assess whether individual employees still >50% AI work
2. Some may continue qualifying even if company direction changes
3. Notify tax authorities of those who no longer qualify
4. Company may lose AI Enterprise status, making future exemptions harder

Real Company Examples

Case Study 1: AI Startup (Ho Chi Minh City)

Company: 28-person AI development startup, computer vision focus

AI Professionals: 18 employees (engineers, researchers)

Salary Range: VND 800M-2.5B

Total PIT Savings:

• Without AI Law: ~VND 5.6B in annual PIT
• With AI Law: VND 0
• 5-year employee benefit: VND 28B

Recruitment Impact:

• Hired 8 engineers from Singapore/US by highlighting net salary advantage
• Reduced salary negotiations (net focus vs. gross focus)
• 95% retention over first year (industry average: 70%)

Case Study 2: E-commerce Giant (Hanoi)

Company: 800-person e-commerce company, building AI recommendation engine

AI Professionals: 45 employees in AI division

Strategy: Transitioned 30 existing data scientists to AI-focused roles to trigger exemption

Results:

• Increased team retention 40% (from 60% to 84% annual retention)
• Positioned as "AI career accelerator" in recruitment
• Combined AI Law exemption + Decree 182 training subsidies = VND 1.2B total benefit per employee over 5 years

Case Study 3: Manufacturing Tech Company (Da Nang)

Company: 200-person manufacturing company adding AI-powered quality inspection

AI Professionals: 6 employees (hired specifically for AI system)

Challenge: Not an "AI company," so more documentation required

Solution:

• Created separate AI division within company
• Detailed job descriptions and work logs
• Documented AI system ROI to demonstrate business substance

Results: All 6 employees approved for exemption; saved VND 9M+ in recruiting costs by highlighting tax benefit

Working with Pertama Partners

The AI Law PIT exemption is powerful but requires careful administration. Pertama Partners helps:

Qualification Assessment:

• Evaluate which roles genuinely qualify
• Structure job descriptions to meet AI professional criteria
• Advise on AI Enterprise registration (if beneficial)

Tax Authority Liaison:

• Prepare and submit exemption applications
• Maintain compliant documentation
• Handle annual confirmations and audits

Integration with Training Programs:

• Combine AI Law benefits with Decree 182 subsidies
• Develop AI career paths that maximize both programs
• Calculate total compensation value for recruitment

Talent Strategy:

• Position exemption in recruitment marketing
• Develop retention plans aligned with 5-year benefit
• International talent attraction strategies

Typical Results:

• 100% approval rate for properly documented AI professionals
• VND 200M-500M net benefit per employee over 5 years
• 25-40% improvement in AI talent retention
• Zero audit issues with compliant documentation

Contact Pertama to leverage Vietnam's AI Law for competitive talent advantage.