Quarterly Vietnam HR & Payroll Updates in April 2022.

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Quarterly Vietnam HR & Payroll Updates in April 2022

Each quarter, Acclime Vietnam releases Quarterly HR & Payroll Updates focusing on relevant legislation and regulations, changes released in the previous quarter, Official Letters released by Vietnam Authorities, together with reminders for key dates for implementation of HR & Payroll changes coming into effect.

Proposed increases to Minimum Monthly Wages by 6% from 1 July 2022

On 12 April 2022, Vietnam’s National Wage Council finalised their proposal to increase Minimum Monthly Wage for employees in Vietnam at an average of 6% across the 4 regions, effective from 1 July 2022. This increase is subject to the Prime Minister’s final approval, which is expected to be procedural.

Zone Minimum Monthly Wage (VND)Increase (VND)
Prior to 1 July 2022From 1 July 2022
Zone 14,420,0004,680,000260.000
Zone 23,920,0004,160,000240.000
Zone 33,420,0003,630,000240.000
Zone 43,070,0003,250,000180.000

(Zone 1 covers areas including urban areas of Hanoi, Ho Chi Minh City and Hai Phong, along with certain industrial areas of Binh Duong, Dong Nai and Ba Ria – Vung Tau. Zone 2 covers rural areas of Hanoi and Ho Chi Minh City, along with major urban areas in the country)

How does the change impact costs of employers and employees?

Once the change is effective:

  • Employers should ensure that their staff are not paid less than the monthly minimums.
  • This increase also impacts the maximum cap for the monthly calculation of Unemployment Insurance for employer and employee portions. The maximum cap is 20 times the Minimum Monthly Wage of the Zone the employer is in.

Example for Zone 1:

InsurancesMaximum Monthly Cap
Prior to 1 July 2022From 1 July 2022
Unemployment Insurance (UI)88,400,000 VND

(20 x 4,420,000 VND)

93,600,000 VND

(20 x 4,680,000 VND)

Employers should factor in these changes into their budget.

Guidelines for finalisation of Personal Income Tax for the 2021 tax year

On 24 March 2022, the General Department of Taxation issued Official Letter 883/TCT-DNNCN guiding Personal Income Tax (PIT) finalisation. Some highlights from the Official Letter are:

Deadline to directly finalise PIT with tax authorities

Accordingly, based on the provisions at Points a and b, Clause 2, Article 44 of the 2019 Tax Administration Law, the deadline for declaring and submitting PIT finalisation documents is as follows:

  • For income-paying organisations: The deadline for submitting tax finalisation declarations is the last day of the third month from the end of the calendar year, i.e., 31 March 2022.
  • For individuals who directly finalise tax: The deadline for submitting tax finalisation documents is the last day of the fourth month from the end of the calendar year (i.e., 30 April). In 2022, this deadline is extended to May 4th 2022 due to Public holiday.
  • If an individual has a refund for PIT but submits the tax finalisation declaration late, no penalty will be applied for administrative violations in tax filing.
  • Where the deadline for tax finalisation coincides with a prescribed holiday, the deadline will be the next working day of that holiday according to the provisions of the Civil Code.

Applications for PIT self-finalisation

According to the Official Letter, an application submitted by a taxpayer who directly finalises PIT with a tax authority will include:

  1. PIT finalisation using form No. 02/QTT-TNCN enclosed with Circular 80/2021/TT-BTC dated 9 September 2021.
  2. An attached list of registered dependents for deductions according to form No. 02-1/BK-QTT-TNCN issued together with Circular 80/2021/TT-BTC dated 29 September 2021.
  3. Photocopies of proof documents for the amount of tax withheld or provisionally paid during the year or paid overseas (if any). If the income-paying organisation has closed down and therefore, could not provide PIT withholding documents for the taxpayer, the tax office must consider using the taxation database and processing the taxpayer’s finalisation without requiring the documents. If the income-paying organisation or individual (employer) uses electronic PIT withholding documents, the taxpayer must print and submit the hard copies of the documents.
  4. A copy of the tax withholding certificate issued by the employer or a copy of the bank documents for the overseas tax payment and the taxpayer’s certificate, if the foreign authority does not send a written confirmation for the tax payment according to the law of that country.
  5. Proof documents for donations to charitable funds, humanitarian funds, or scholarship funds (if any).
  6. Proof documents for the amount paid by the overseas income-paying organisation if the taxpayer was paid from abroad by an international organisation, Embassy, or Consulate.
  7. Dependant registration documents if the taxpayer claims a deduction for unregistered dependants at the time of finalisation.

Tax payers are encouraged to submit applications via online tax management system. To submit online documents, individuals can access website of the General Department of Taxation at: www.thuedientu.gdt.gov.vn with an electronic tax account registered with the tax authority. To be able to register this account, tax payers need to have a registered mobile phone number in Vietnam to receive OTP.

Increase in overtime hours from 200 hours to 300 hours per year

On 23 March 2022, the Standing Committee of the National Assembly approved Resolution 17/2022/UBTVQH15 on the annual and monthly overtime hours of employees while ensuring COVID-19 prevention and control and socio-economic recovery and development.

According to the Resolution, an employer may assign employees to work overtime for 200-300 hours per year if it is agreed by the employees, except for the following cases:

  • Employees aged between full 15 and under 18
  • Employees with mild disabilities with work capacity reduction of at least 51% or employees with severe disabilities or extremely severe disabilities
  • Employees doing arduous, hazardous, dangerous, or extremely arduous, hazardous works
  • Female employees in their 7th month of pregnancy onward or in the 6th month of pregnancy onward, in case they work in the highlands, remote areas, border areas, or islands.
  • Female employees nursing children under 12 months old

Although the employer is allowed to assign the employee to work overtime for a maximum of 300 hours in a year, the employer may assign the employee, with the employee’s consent according to Article 107 of the Labour Code to work overtime for more than 40 hours but not more than 60 hours in a month. (The maximal overtime in a month is previously 40 hours).

Resolution 17/2022/UBTVQH15 took effect from 1 April 2022 but the regulations on overtime hours in this Resolution apply from 1 January 2022.

Ceasing support for union members and employees affected by COVID-19 by trade unions from 1 March 2022

This is the content of Decision 4292/QD-TLD on ceasing the implementation of Decision 3749/QD-TLD on support for union members and employees affected by the COVID-19 epidemic.

Accordingly, the Presidium of the Vietnam General Confederation of Labour has decided to cease implementing Decision 3749/QD-TLD dated 15 December 2021 on support for union members and employees affected by the COVID-19 epidemic from 1 March 2022.

The receipt of dossiers of settlement of support payments for subjects infected with COVID-19 before 1 March 2022 according to Decision 3749/QD-TLD were to be completed by 31 March 2022 at the latest.

From 1 March 2022, support payments for union members and employees affected by the COVID-19 epidemic (including F0 deaths) will be made according to regulations on expenses for support, visits, and subsidies in Decision 4290/QD-TLD regulating revenue, expenditure, financial management, and assets of grassroots trade unions; and Decision 4291/QD-TLD regulating on standards and norms of spending regimes in trade unions.

Decision 4292/QD-TLD took effect from 1 March 2022.

Rent support for employees in industrial zones, export processing zones and key economic zones

On 28 March 2022, the Prime Minister released Decision 08/2022/QD-TTg on implementation of policies on rent support for employees.

Specifically, an employee who is working for an enterprise in an industrial zone or an export processing zone, or a key economic zone (including economic zones established according to conditions, orders, and procedures prescribed in the Government’s Decree 82/2018/ND-CP on management of industrial zones, and economic zones in 24 provinces and centrally affiliated cities of 4 key economic zones, which are in the master plan and established under the Prime Minister’s Decisions such as Hanoi, Ho Chi Minh City, Danang, Hai Phong,…) will be eligible for support if the employee satisfies all of the following conditions:

  • Rent accommodation from 1 February 2022 to 30 June 2022.
  • Have an indefinite-term employment contract or a fixed-term employment contract for at least 1 month which was concluded and executed before 1 April 2022.
  • Participating in compulsory Social Insurance (included in the list of participants in compulsory Social Insurance of Social Insurance Agency) in the preceding month of the month in which the enterprise makes the list of employees applying for rent support.

Where the employee is not participating in compulsory Social Insurance, as specified in Clause 4 Article 2 of Decree 115/2015/ND-CP, the employee must be included in the enterprise’s payroll for the preceding month of the month in which the enterprise prepares the list of employees applying for rent support.

Employees working in enterprises meeting all of the above conditions will receive a support of 500.000VND per person per month from the State. The support duration is up to 3 months and the support will be provided monthly.

Decision 08/2022/QD-TTg came into force on 28 March 2022.

 

For more information on HR & Payroll 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 July 7, 2022
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