We present improved constraints on an interacting vacuum model using updated astronomical observations including the first data release from Planck. We consider a model with one dimensionless parameter, α, describing the interaction between dark matter and vacuum energy (with fixed equation of state w=−1). The background dynamics correspond to a generalized Chaplygin gas cosmology, but the perturbations have a zero sound speed. The tension between the value of the Hubble constant, H0, determined by Planck data plus WMAP polarization (Planck+WP) and that determined by the Hubble Space Telescope (HST) can be alleviated by energy transfer from dark matter to vacuum (α>0). A positive α increases the allowed values of H0 due to parameter degeneracy within the model using only cosmic microwave background data. Combining with additional data sets of including supernova type Ia (SN Ia) and baryon acoustic oscillation (BAO), we can significantly tighten the bounds on α. Redshift-space distortions (RSD), which constrain the linear growth of structure, provide the tightest constraints on vacuum interaction when combined with Planck+WP, and prefer energy transfer from vacuum to dark matter (α<0) which suppresses the growth of structure. Using the combined data sets of Planck+WP+Union2.1+BAO+RSD, we obtain the constraint on α to be −0.083<α<−0.006 (95% C.L.), allowing low H0 consistent with the measurement from 6dF Galaxy survey. This interacting vacuum model can alleviate the tension between RSD and Planck+WP in the ΛCDM model for α<0, or between HST measurements of H0 and Planck+WP for α>0, but not both at the same time.