Decision 23 providing regulations on implementation of policies to support businesses and individuals impacted by the COVID-19 pandemic in Vietnam.

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Decision 23 providing regulations on implementation of policies to support businesses and individuals impacted by the COVID-19 pandemic in Vietnam

Facing a complicated stage of the COVID-19 pandemic in Vietnam, which is significantly impacting businesses and people’s lives, the Vietnamese Government has commenced supporting actions in response to the situation through issuing a number of regulations to support businesses and individuals.

On 1 July 2021, the Government issued Resolution 68/NQ-CP indicating policies to decrease and defer contribution payments into a number of Social Insurance funds, provides funding support for businesses, and facilitates allowances for employees, individuals and business households impacted by COVID-19. We have released a Client Alert indicating details of notable points of Resolutions 68. Click here to read our article.

Following the Resolution 68, on 7 July 2021, the Government further issued Decision 23/2021/QD-TTg providing more details and guidance to implement the supporting policies of Resolution 68. In particular, the Decision has clarified the applicable subjects and provided guidance on required documents and processes for entitlement applications.

The Decision came into effect on the signing date, 7 July 2021.

Key elements of the Resolution are as follows:

1. REDUCTION IN SOCIAL INSURANCE CONTRIBUTIONS TO THE OCCUPATIONAL ACCIDENTS AND DISEASES FUND

Employers are entitled to a 0% payment rate of their salary fund to the Insurance fund for Occupational Accidents and Diseases (one of the three funds that together comprise the compulsory Social Insurance contributions, and which ordinarily requires a contribution of 0.5% from the employer) for 12 months (from 1 July 2021 to 30 June 2022).

Employers are to use the reduction in contributions to the Occupational Accidents and Diseases Fund to support their employees against the COVID-19 pandemic.

The Decision clarifies that, the period of payment reduction is still included in the period of entitlement of occupational accident and diseases insurance.

Comment: there is no significant additional specifics regarding guidance on the mechanisms to apply this reduction in Social Insurance contributions, as well as specifics on the use of these funds indicated in the Decision 23, in comparison to the corresponding regulation in the Resolution 68.

2. DEFERRAL OF CONTRIBUTIONS FROM EMPLOYERS AND EMPLOYEES TO THE RETIREMENT AND DEATH FUND

Applicable employers

Employers who have paid full Social Insurance contributions or have temporarily suspended contributions to the Retirement and Death Fund (one of the three funds that together comprise the compulsory Social Insurance contributions, and which ordinarily requires a contribution of 14% from the employer and 8% from the employee) after April 2021 but are affected by the COVID-19 pandemic, resulting in a downsizing by 15% of their employees participating in Social Insurance (as compared to April 2021), including:

i.    Number of employees terminating labour contracts minus the number of new employees entering into labour contracts during the period from 1 May 2021 until the date the employer has a written request.

ii.   The number of employees who are temporarily suspended from the performance of labour contract with the suspension time is of 14 working days or more in a month.

iii.  Number of employees who cease working (including cases of with or without salary) and the cessation period is 14 working days or more in a month.

Payment deferral period

Eligible employees and employers are entitled to deferral of payment to the Retirement and Death Fund for 6 months from application submission.

For the cases entitled to the deferral according to Resolution 42/NQ-CP dated 9 April 2020 and Resolution 154/NQ-CP dated 19 October 2020 by the Government, if being eligible, they are still entitled for deferral per this Resolution, provided that the total deferral period does not exceed 12 months.

Application process

  • During the period from the effective date of this Decision (7 July 2021) to 30 June 2022, the employer completes and submits written request according to Form No.1 (attached as an appendix to the Decision) to 2 authorities, including the Social Insurance Authority managing its social insurance for implementation, and the Department of Labour – Invalids and Social Affairs (“DoLISA”) for supervision of implementation.
  • Within 5 working days from the application document receipt, the Social Insurance Authority will consider and settle the deferral application. In case of failure to deferral, the Authority replies to the enterprises in writing and clearly state the reason.

Other cases of deferral request (according to Article 16 of Decree 115/2015/ND-CP) still follow the process stipulated in Circular 59/2015/TT-BLDTBXH dated 29 December 2015.

3. TRAINING FUNDING SUPPORT

Applicable employers

Employers are entitled to financial support for training, re-training and improvement of vocational skills from the Unemployment Insurance Fund once:

i.    Fully paying Unemployment Insurance contributions for employees for 12 months or more up to the date of requesting support;

ii.   Changing the structure or technology according to the provisions of Clause 1, Article 42 of the Labour Code: changes in the organisational structure, personnel rearrangement, processes, technology, equipment associated with the employer’s business lines, products or product structure;

iii.  Having revenue of the preceding quarter before requesting support decreasing by 10% or more compared to the same period in 2019 or 2020; and

iv.  Having a plan or cooperating with a vocational education institution in developing a plan for training, retraining and improving vocational skills and qualifications in order to maintain jobs for employees.

Entitlements and applicable period

The entitlement is maximum 1,500,000 VND per employee/month, based upon the actual months of training. Entitlement period is for a maximum support term of 6 months.

In case the training lasts less than 1 month, the entitlement will be calculated for (i) half a month for under 15 days training, and (ii) 1 month for under 1 month training.

Application documents

i.    Written request for training funding support to be prepared according to Form No.3 attached in the Decision.

ii.   Documents of the employer on the change of structure and/or technology.

iii.  Training plan to be prepared according to the Form No.2 attached in this Decision.

iv.  Written confirmation from Social Insurance Authority on the full payment of Unemployment Insurance contribution of employer for 12 months or more up to the date of requesting support, and full Unemployment Insurance contribution payment for the employees to be trained.

Application process

i.    Employer requests Social Insurance Authority for written confirmation on full Unemployment Insurance contribution payments as mentioned above. The Social Insurance Authority will provide the written confirmation within 2 working days from the request date.

ii.   Employer submits the required application documents to DoLISA.

iii.  Within 7 working days from the submission date, DoLISA answers the employer. In case of approval, DoLISA informs the provincial Social Insurance Authority to remit the approved financial funding support amount to the employer.

iv.  Within 3 working days from the date of receipt of requesting approval from DoLISA, the provincial Social Insurance Authority remits the lump-sum supporting amount to the employer.

v.   Within 2 working days from the date of receiving the support funding, the employer transfers the funding to the training institution according to the approved plan.

vi.   Within 45 days from the training completion date, the employer must complete the actual payment with the vocational education institution and report the implementation results to DoLISA. Within 5 working days from the date of receipt of the employer’s implementation report, DoLISA issues a decision to withdraw the remaining/redundant training funding (if any) to the provincial Social Insurance Authority and the employer to refund the Unemployment Insurance Fund.

Applications are to be submitted by 30 June 2022.

4. ALLOWANCES FOR EMPLOYEES TEMPORARILY CEASING WORKING WITHOUT SALARY

Applicable employees

Employees of enterprises, cooperatives, public non-business units, and educational institutions who:

  • temporarily cease working without salary for 15 consecutive days or more, in the period from 1 May 2021 to the end of 31 December 2021, by the reason of business operation cessation of the organisations they are working for, following the requirement of competent authority in response to COVID-19, and
  • participate in compulsory Social Insurances (up to the date right before their cessation date)

Entitlement

Eligible employees are entitled to a lump- sum allowance of:

  • 1,855,000 VND per person if the cessation period is 15 consecutive days or more
  • 3,710,000 VND per person if the cessation period is 1 month or more

Employees who are (i) pregnant, or (ii) parents or substitute caregiver taking care of children less than 6 years old, are entitled to additional amount of 1,000,000 VND per child (under 6 years old), and the entitlement is only applicable to either mother or father of the child.

Application documents

Required documents for employer’s application cover:

i.    A copy of the written agreement to suspend the labour contract or cease working without salary

ii.   The list of employees certified by the Social Insurance Authority according to Form No. 05 attached in this Decision.

iii.  For additional entitlement of pregnant woman, parents or substitute caregiver: a certified copy or a copy enclosed with the original for comparison of one of the following documents: (i) document showing that the employee is pregnant; (ii) child’s birth certificate; (iii) certificate of adoption; (iv) a competent agency’s decision on substitute caregiving.

Application process

i.     Employer requests Social Insurance Authority on written confirmation on list of employees participating in Social Insurance. The Social Insurance Authority will provide the written confirmation within 2 working days from the request date.

ii.    Employer submits the application documents to District-level People’s Committee. Deadline for submission is 31 January 2022.

iii.   Within 2 working days from application documents receipt, District-level People’s Committee appraises and submits to the provincial People’s Committee.

iv.   Within 2 working days, provincial People’s Committee answers the employer and directs stakeholders for payment implementation.

5. ALLOWANCES FOR EMPLOYEES SUSPENDED FROM WORK TO IMPLEMENT COVID-19 QUARANTINE

Applicable employees

Employees working under labour contracts and:

  • Suspended from work and subject to quarantine or in blocked areas at the request of a competent authority for 14 days or more during the period from 1 May 2021 to the end of 31 December 2021, and
  • Participating in compulsory Social Insurance (up to the month right before the working cessation month)

Entitlement

Eligible employees are entitled to a one-off support of 1,000,000 VND per person.

Employees who are (i) pregnant, or (ii) parents or substitute caregiver taking care of children less than 6 years old, are entitled to additional amount of 1,000,000 VND per child (under 6 years old), and the entitlement is only applicable to either mother or father of the child.

Comments: note that according to the Clause 3, Article 99 of the 2019 Labour Code, the above applicable employees also are to receive negotiated salaries from employers for the cessation period, following the stipulated process. Further details are provided in the guidance from the Ho Chi Minh City Labour Union through Official Letter 420/LDLD-CSPL.

Application documents

i.    A copy of the request for quarantine/isolation from a competent state authority.

ii.   The list of employees certified by the Social Insurance Authority according to Form No. 06 attached in this Decision.

iii.   Required documents of employees as pregnant woman, parents or substitute caregiver for additional entitlement (if any)

Application process

i.    Employer requests Social Insurance Authority on written confirmation on list of employees participating in Social Insurance. The Social Insurance Authority will provide the written confirmation within 2 working days from the request date.

ii.   Employer submits the application documents to District-level People’s Committee. Deadline for submission is 31 January 2022.

iii.  Within 2 working days from application documents receipt, District-level People’s Committee appraises and submits to the provincial People’s Committee.

iv.  Within 2 working days, provincial People’s Committee answers the employer and directs stakeholders for payment implementation.

v.   Within 2 working days from the allowance receipt, the employer remits allowances to its entitled employees.

6. ALLOWANCES FOR EMPLOYEES SUBJECT TO LOSS OF EMPLOYMENT BUT INELIGIBLE FOR UNEMPLOYMENT BENEFITS

Applicable employees

Employees of enterprises, cooperatives, public non-business units, and educational institutions who:

  • working for employers that have to cease operation during the period from 1 May 2021 to 31 December 2021, under the requirements of a competent authority in response to COVID-19;
  • Participate in compulsory Social Insurance (up to the month right before their cessation).
  • Have their labour contract terminated between the period from 1 May 2021 to 31 December 2021 but ineligible for unemployment benefits, except for:
    • Employees who unilaterally terminate the labour contract illegally.
    • Employees who are entitled to monthly pensions and allowances for loss of working capacity.

Entitlement

Eligible employees are entitled to one-time allowance of 3,710,000 VND per person.

Employees who are (i) pregnant, or (ii) parents or substitute caregiver taking care of children less than 6 years old, are entitled to additional amount of 1,000,000 VND per child (under 6 years old), and the entitlement is only applicable to either mother or father of the child.

Application documents

i.    Written request prepared according to Form No.07 attached in the Decision

ii.   A certified copy or a copy enclosed with the original for comparison of one of the following documents:

    • The expired labour contract, or
    • Resignation decision, or

iii.   Notice or agreement on labour contract termination.

iv.   A copy of the Social Insurance Book or the Social Insurance Authority’s confirmation on the employee’s participation in compulsory Social Insurance and Unemployment Insurance.

v.    Required documents of employees as pregnant woman, parents or substitute caregiver for additional entitlement (if any)

Application process

i.    Employee is to submit application documents to Employment Service Center under the DoLISA where the employee terminates the labour contract. The deadline for submission is 31 January 2022.

ii.   Before the 5th and 20th of each month, the Employment Service Center reviews and submits the list of employees eligible for support to DoLISA.

iii.  Within 2 working days, DoLISA reviews and submits to provincial People’s Committee

iv.  Within 3 working days, the provincial People’s Committee answers the employee and directs stakeholders for payment implementation.

7. ALLOWANCES FOR CHILDREN AND PEOPLE TREATING COVID-19 OR MEDICAL ISOLATION (F0 AND F1)

Applicable individuals

Children (under 16 years old) and individuals, who are in COVID-19 treatment (F0), and who have to undergo medical isolation (F1) under a decision of a competent authority, from 27 April 2021 to 31 December 2021.

Entitlement and applicable period

  • A food allowance of 80,000 VND per person per day for F0 and F1. The entitlement period is no more than 45 days for F0 and 21 days for F1.
  • An additional one-time allowance of 1,000,000 VND per child for children as F0 or F1.
  • Children are guaranteed by the state budget for treatment expenses.

Application documents

For F0 and F1 under treatment/medical isolation at hospital/isolation premises:

i.   List of F0/F1 prepared according to Form No. 8a (attached in the Decision)

ii.  Hospital discharge letter of F0, or written decision of competent authority on medical isolation for F1

iii. A copy of one of the following papers: birth certificate, or passport, identity card, or health insurance card.

For F0 and F1 completed treatment/medical isolation before the effective date of this Decision:

For F0:

i.    Hospital discharge letter

ii.   Receipt/bill of meal at the hospital

iii.  A copy of one of the following papers: birth certificate, passport, identity card, health insurance card.

For F1:

i.    Decision of competent authority on medical isolation

ii.   Written confirmation on completion of isolation

iii.   Receipt/bill of meal at isolation premises

iv.   A copy of one of the following papers: birth certificate, or passport, or identity card, or health insurance card.

Application process

i.    For F0/F1 under treatment/medical isolation at hospital/isolation premises: hospital/isolation premises prepare a list of F0/F1 according to Forms No. 08a, 8b and submit to provincial People’s Committee. Submission deadline is 31 March 2022.

For F0/F1 completed treatment/medical isolation:

    • Children’s parents or legal guardian, or F0/F1, submit the application documents to Commune-level People’s Committee where individuals reside. Submission deadline is 31 March 2022.
    • Prior to the 5th and 20th of each month, the Commune-level People’s Committees send a list of eligible individuals to the District-level People’s Committee.
    • Within 2 working days, District-level People’s Committee summarise and submit the list to provincial People’s Committee.

ii.   Within 2 working days from document receipt date, provincial People’s Committee answers in writing, direct stakeholders for payment implementation in case of approval, and inform the reason in case of failure to support.

iii.   The hospital/isolation premises/Commune-level People’s Committee is responsible for making allowance payments to eligible children and individuals according to the approved list of provincial People’s Committee.

8. SUPPORT FOR TOUR GUIDES AND ARTISTS

Lump-sum support of 3,710,000 VND per person for:

  • Art directors, actors, and painters holding professional titles at level 4 in public non-business units engaged in performing arts (excluding art units of the armed forces) which must stop working for 15 days or more due to the impact of COVID-19 from 1 May 2021 to 31 December 2021.
  • Tour guides holding tourist guide practice cards affected by COVID-19 during the period from 1 May 2021 to the end of 31 December 2021.

Further details, application documents and process are stipulated in Article 28-34 of the Decision.

9. SUPPORT FOR BUSINESS HOUSEHOLDS

Applicable business households

Business households with business registration and tax registration that cease operating for 15 consecutive days or more from 1 May 2021 to 31 December 2021 at the request of s competent authority in response to COVID-19.

Entitlement

A one-time support of 3,000,000 VND per eligible business household.

Application documents and process

i.    Business household completes written request according to Form No. 11 (attached in this Decision) and submit to Commune-level People’s Committee where the business household is located. Submission deadline is 31 January 2022.

ii.   Within 3 working days, Commune-level People’s Committee certifies the business household’s business suspension, implements public posting, and reports to the District-level Tax Department.

iii.  Within the next 4 working days, District-level Tax Department and stakeholders appraises, then the District-level People’s Committee submits to provincial People’s Committee.

iv.   Within 2 working days, provincial People’s Committee answers in writing and direct stakeholders for implementation.

10. LOAN SUPPORT TO PAY SALARIES FOR EMPLOYEES CEASING WORKING AND SALARIES DURING BUSINESS RECOVERY

Applicable employers

Employers are permitted to receive supporting loans once they meet the following conditions:

For loan support to pay salaries for employees ceasing working:

  • have employees participating in compulsory Social Insurances cease working for 15 consecutive days or more (as prescribed in Clause 3, Article 99 of the Labour Code) from 1 May 2021 to 31 March 2022, and
  • have no bad debts at credit institutions or foreign bank branches.

For loan support to pay salaries during business recovery:

  • Either suspending operations from 1 May 2021 to 31 March 2022 under the request of a competent authority in response to COVID-19 returning operations; or operating in transportation, aviation, tourism, and accommodation services send Vietnamese workers to work abroad under contracts to recover business and completed 2020 tax finalisation.
  • have employees working under labour contracts and participating in Social Insurance (up to the time of loan request);
  • have a plan to recover business; and
  • have no bad debts at credit institutions or foreign bank branches.

Loan, loan term, and disbursement term

Eligible employers are permitted to receive loans from the Vietnam Bank of Social Policies at a 0% interest rate without security to pay salaries for employees participating in compulsory Social Insurances.

For loan support to pay salaries for employees ceasing working:

The maximum loan amount is equal to the regional minimum wage for the number of employees according to the actual period for employees ceasing working, but no more than 3 months. The loan term is for less than 12 months.

For loan support to pay salaries during business recovery:

The maximum loan amount is equal to the regional minimum wage for the number of employees who are working under a labour contract, for up to 3 months. The loan term is for less than 12 months.

Disbursement term: the disbursement of the Bank for Social Policies to the employer for the months of May, June, and July of 2021 is made once. The disbursement period is until 5 April 2022 or when the disbursement of VND 7,500 billion is complete, whichever comes first.

Application documents

i.     Written loan request prepared according to Form No. 12a, 12b, 12c (attached in the Decision)

ii.    List of employees participating in Social Insurance prepared according to Form No. 13a, 13b, 13c.

iii.   A certified copy or a copy enclosed with the original for comparison of one of the following papers: Certificate of business registration, or Investment Certificate, or Operation License/Practice Certificate (for conditional business lines).

iv.   Authorisation letter (if any)

Additional required documents for employers applying for loan support to pay salaries during business recovery, including:

v.    A copy of the written request of a competent state authority on operation cessation of employer in response to COVID-19 between the period from 1 May 2021 to 31 March 2022.

vi.   Business recovery plan.

vii.  A copy of the written notice/confirmation from Tax Authority’s on completing 2020 corporate income tax finalisation (only required for employers operating in transportation, aviation, tourism, and accommodation services)

Application process

i.     Employer is to prepare a list, take legal responsibility for the accuracy and truthfulness of the number of employees who cease working, and participating in compulsory Social Insurance.

ii.    Employer requests Social Insurance Authority on written confirmation on list of employees participating in Social Insurance. The Social Insurance Authority will provide the written confirmation within 2 working days.

iii.   Employer submits the application documents to Bank of Social Policies where the business is located. Submission deadline is 25 March 2022.

iv.   Within 4 working days, the Bank answers the employer in writing.

v.    Within 3 working days from the date of receiving the refinancing, the Bank will disburse funds to the employer.

Overdue debts and loan risks

When the loan is due, if the employer fails to pay the loan or the employer violates the signed credit contract, the Bank for Social Policies will transfer the entire remaining balance of the loan to overdue debt and apply the overdue debt interest rate of 12% per year.

11. SUPPORT FOR OTHER INDIVIDUALS WITHOUT LABOUR CONTRACTS

Regarding support for other individuals without labour contracts, the Resolution 68 stated that: individuals working without labour contracts that cease working due to operational cessation under the request of a competent authority in response to COVID-19, depending on specific conditions and budgetary capabilities of the provinces/cities, are entitled to allowance of no less than 1,500,000 VND per person per time or 50,000 VND per person per day based on the actual number of cessation days.

However, Decision 23 has no specific regulations concerning this support.

Please contact Acclime Vietnam if you would like to discuss how this Decision may apply to you, and planning techniques to manage tax exposures.

Last updated on July 14, 2021
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