October 2021 Tax Updates: Assisting foreign professionals and employees entering Vietnam and instructions for use of e-invoices.

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October 2021 Tax Updates: Assisting foreign professionals and employees entering Vietnam and instructions for use of e-invoices

This October 2021 publication of our Tax and Accounting Updates looks at Directive 27 on assisting foreign professionals and employees entering Vietnam, Decision 28 policies on aid for employees and employers affected by COVID-19 from the Unemployment Insurance Fund, instructions for use of e-invoices for business households and individuals, Decision 3022 on support for Trade Union members and employees, Decree 85 regulating required information of goods and services introduced on e-commerce platforms, proposal to no longer force e-commerce platforms to pay taxes on behalf of sellers, and instructions for testing SARS-CoV-2 with production and business facilities.

Foreign professionals and employees to be provided assistance to enter Vietnam

On 3 October 2021, the Prime Minister released Directive 27/CT-TTg on the recovery of production activities in industrial manufacturing sectors in the COVID-19 prevention and control context. Accordingly, the Prime Minister requested the Ministry of Foreign Affairs to work in conjunction with the Ministry of Public Security and its relevant units on removing difficulties and obstacles, and creating favourable conditions for foreign experts and workers to enter and quarantine according to regulations of the Ministry of Health.

In addition, the Prime Minister also requested the Ministry of Finance and the State Bank of Vietnam to review and promptly provide instructions on tax exemptions and reductions, and a mechanism for interest rate and credit support for businesses in accordance with Resolution 105/NQ-CP dated 9 September 2021.

The Ministry of Health is requested to promptly issue:

  • Social distancing and testing requirements during production and business activities of enterprises;
  • Regulations on production conditions and actions to be taken in response to the situation in which employees at industrial parks infected with COVID-19; and
  • Regulations on methods of managing close contacts with patients for ultimate safety for business and production activities.

Decision 28 policies on aid for employees and employers affected by COVID-19 from the Unemployment Insurance Fund

The Vietnamese Government issued Decision 28/2021/QD-TTg on 1 October 2021 to support employees and employers in Vietnam facing difficulties due to COVID-19, with financial aid, reductions in contributions for the Unemployment Insurance (UI) Fund and procedures for entitlement. Decision 28 entered into force as of 1 October 2021.

Financial aid for employees:

i.    Listed as those participating in Unemployment Insurance up until 30 September 2021 (except those working for state agencies, and organisations stipulated in the Decision), and

ii.   Whose employment contracts were terminated between 1 January 2020 and 30 September 2021, and whose UI contribution periods were maintained (except monthly old-age pensioners)

are entitled to one-off financial aid. The aids are range from VND1,800,000 to VND3,300,000 depending on the UI contribution period of the employee.

Process and procedures to be entitled to the financial aids for employees who are participating in Unemployment Insurance:

  • Social Insurance agencies send lists of employees participating in the UI to employers, and publicize the list of employees eligible for support on the website of the provincial social insurance agency by 20 October 2021.
  • Within 5 business days, employers announce the received lists to their employees to check and adjust information (if any). Then, employers compile the lists of employees with correct and sufficient information (and mark the employees who voluntarily refuse the support) by using Form No.02 and send it to Social Insurance agencies.

Employers compile a list of employees with corrected/supplemented information according to Form No.03 and submit it with proof documents for the changes to Social Insurance agencies by 10 November 2021.

  • Social Insurance agencies remit the financial aid within 10 working days from the receipt of the lists of employees with correct and sufficient information and within 20 days from the receipt of the lists of employees with corrected/supplemented information. Payments made via bank accounts are encouraged.

Reductions in contributions to the Unemployment Insurance Fund for employers affected by the COVID-19 pandemic:

Employers under Article 43 of the Employment Law (excluding state agencies, political organisations, socio-political organisations, people’s armed forces, and public non-business units due to the state budget guaranteeing recurrent expenditure), which were participating in Unemployment Insurance before 1 October 2021, are entitled to a reduction in UI contribution rate from 1% to 0%) for 12 months, from 1 October 2021 until 30 September 2022.

We have released a Client Alert summarising key points of this Decision, please find the article at https://vietnam.acclime.com/news-insights/decision-28-covering-financial-aid-and-support-measures-for-employees-and-employers-in-vietnam/ .

Instructions for use of e-invoices for business households and individuals

On 17 September 2021, the Ministry of Finance released Circular 78/2021/TT-BTC providing instructions on implementing several articles in the Law on Tax Administration and Decree 123/2020/ND-CP on invoices and evidence documents.

Accordingly, business households and individuals will have access to e-invoices from 1 July 2022 in the following cases:

  • Those paying taxes according to the tax declaration method are required to issue e-invoices;
  • If those paying taxes according to the lump-sum tax payment method need to issue invoices, tax authorities may provide them with e-invoices separately on an on-demand basis;
  • If those declaring taxes as they need to issue invoices, tax authorities may provide them with e-invoices separately on an on-demand basis.

Except for cases under clause 1 of Article 14 in Decree 123/2020/ND-CP where paper invoices provided by tax authorities may be used within 12 months if the business households and individuals have no electronic transaction with tax authorities, no IT infrastructure or accounting software, or e-invoicing software to issue e-invoices and to transmit the data to buyers and tax authorities.

The 12-month period existing in a one-off manner starts from:

  • 1 July 2022 for business households or individuals that carry on business before 1 July 2022; or
  • The registration date of invoices of business households and individuals set up in business from 1 July 2022.

Circular 78 will enter into force as of 1 July 2022.

Decision 3022 on support for trade union members and employees

On 9 August 2021, the General Confederation of Labour issued Decision 3022/TD-TLD amending Decision 2606/QD-TLD dated 19 May 2021 on emergency support expenses for union members and employees affected by the COVID-19 pandemic.

Accordingly, additional cases where union members and employees affected by COVID-19 are supported by Trade Unions include:

  1. Union members and employees (including enterprises with or without a Trade Union) who are F0 and do not violate the epidemic prevention and control requirements are entitled to up to 3,000,000 VND/person.
  2. Trade Union members and employees (at agencies, units and enterprises with Trade Union contributions) who are F1 and undergo medical isolation at the request of competent state agencies, without violating regulations on epidemic prevention and control, are entitled up to 1,500,000 VND/person.
  3. Union members and employees (at agencies, units and enterprises with Trade Union contributions) who must cease working for medical isolation, or are residing in blocked areas at the request of the Government or competent state agencies, are entitled up to 500,000 VND/person if being in one of the following cases:

a.    Having difficult circumstances; or
b.    Pregnant or raising a child under 06 years old.
c.    Union members and employees (at agencies, units and businesses that pay union fees) who die due to infection with the SARS-CoV-2 virus since 27 April 2021 will be supported at 5,000,000 VND/person (excluding the support mentioned in the above items).

Decision 3022/QD-TLD took effect from the date of signing, 9 August 2021, and promulgation.

Goods information must be on the e-commerce website for sales

On 25 September 2021, the Vietnamese Government issued Decree 85/2021/ND-CP adjusting and supplementing a number of Articles of Decree 52/2013/ND-CP on 16 May 2013 on e-commerce.

Accordingly, the regulation on the information of goods and services introduced on e-commerce websites has the following changes:

  • Information about goods published on websites must include mandatory contents on the goods label as prescribed in Clause 1, Article 10 of Decree 43/2017/ND-CP such as goods name, origin, etc. (Except for product-specific information such as manufacture date; expiry date; production batch number, chassis number, and engine number).
  • The seller must meet the investment and business conditions on the list of conditional investment and business lines and must announce the number, date and place of issuance of the license, certificate of eligibility, and written certification, or other forms of documents according to regulations on business conditions of that business line.

In addition, the seller must continue to comply with the current regulations of providing information so that customers can accurately determine the characteristics of the goods and services to avoid misunderstandings when deciding on entering into a contract.

Decree 85/2021/ND-CP takes effect from 1 January 2022.

Proposal to no longer force e-commerce platforms to pay taxes on behalf of sellers

The Ministry of Finance has drafted a Circular amending Circular 40/2021/TT-BTC guiding value-added tax, personal income tax and tax administration for business households and individuals.

Accordingly, it proposes to amend the provisions at Point đ, Clause 1, Article 8 of Circular 40/2021 as “The organisation that is the owner of an e-commerce platform shall declare and pay tax on behalf of the individual based on authorisation following the provisions of the civil law.”

Thus, the e-commerce enterprise will not have to declare and pay tax on behalf of the seller if the seller does not authorise.

However, the draft proposes the responsibility of the organisation as the owner of the e-commerce platform are as follows:

  • In case the organisation that is the owner of the e-commerce platform does not declare or pay tax on behalf of a business individual under authorisation following civil law, it is responsible for providing information of individuals doing business through the platform. Required information may include the full name of the seller, personal identification number or identity card or citizen identification number or passport number, tax code, address, phone number, sales revenue through the platform, and the seller’s bank account.
  • The provision of information is to be quarterly, no later than the last day of the first month of the following quarter or upon each request arising of the tax authority by the electronic method in accordance with regulations on electronic transactions in the tax field or connect directly with tax authorities if the technical infrastructure conditions are met.

Instructions for testing SARS-CoV-2 with production and business facilities

On 30 September 2021, the Ministry of Health issued Official Letter 8228/BYT-MT guiding the testing of SARS-CoV-2 for production and business facilities.

Accordingly, it is requested that Ministries, Branches and People’s Committees of provinces and cities urgently direct the implementation of regulations on testing for SARS-CoV-2 at production and business facilities as follows:

  • Carry out screening tests for all cases of employees with suspected symptoms of COVID-19 such as cough, fever, difficulty breathing… or related epidemiological factors.
  • Carry out periodic testing for employees:
    • Provinces and cities at very high risk: Perform weekly testing at least 20% of high-risk employees; weekly testing for all employees providing direct services for business and production facilities.
    • Provinces and cities at high risk and risk: Test every 02 weeks at least for 5-10% of high-risk employees; testing every 02 weeks for all employees providing direct services for production and business facilities.
    • It does not apply to those who are fully vaccinated (with the last dose received at least 14 days and not longer than 12 months) or have recovered from COVID-19 within 06 months.
  • Test technique by RT-PCR or Rapid antigen test.
  • The test results must be immediately reported to the District Health Centre, where the production and business facility is located.

(Within about 2 hours after the end of the day of testing and reporting immediately after having a positive SARS-CoV-2 case).

 

For more information on tax updates and other compliance requirements for businesses operating in Vietnam, follow our monthly releases on the website and social media channels at vietnam.acclime.com.

Last updated on October 14, 2021
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