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.
Resolutions on policies to support employees and employers in difficulty due to COVID-19 pandemic from Unemployment Insurance Fund
On 24 September 2021, the Government issued the Resolution 116/NQ-CP and the National Assembly promulgated Resolution 03/2021/UBTVQH15 on support policies for employees and employers in difficult situations due to COVID-19 by means of the Unemployment Insurance (UI) Fund.
Financial aid for employees paying UI contributions to ease COVID-19 impacts
According to this Resolution, financial aid is given to the following beneficiaries:
- Employees listed as those participating in Unemployment Insurance up until 30 September 2021; (Except those working for state agencies, political organisations, socio-political organisations, units of people’s armed forces and public service delivery units whose recurrent expenditures are financed by the state budget).
- Employees whose employment contracts were terminated between 1 January 2020 to end of 30 September 2021, and whose UI contribution periods are reserved (except monthly old-age pensioners).
Financial aid varies according to the UI contribution period of the unemployed will be calculated as follows:
|UI contribution period||Financial aid (VND/person)|
|UI contribution period||Financial aid (VND/person)|
|1 full year – <5 years||2,100,000|
|5 full years – <7 years||2,400,000|
|7 full years – <9 years||2,650,000|
|9 full years – <11 years||2,900,000|
The funding source of the circa 30,000 billion VND is from the Unemployment Insurance Fund balance at the end of 2020. Financial aid commences on 1 October 2021 and will be completed by 31 December 2021 at the latest.
Reduction in UI contributions for employers impacted by COVID-19
Applicable employers: Employers (excluding state agencies, political organisations, socio-political organisations, units of people’s armed forces and public service delivery units whose recurrent expenditures are financed by the state budget, and in accordance with article 33 of employment law) participating Unemployment Insurance prior to 1 October 2021.
Entitled reduction: Applicable employers are entitled to reduction in the UI contribution rate from 1% to 0% of the monthly salary fund of employees who are subject to Unemployment Insurance.
Reduction period: 12 months, from 1 October 2021 to 30 September 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 and units without a trade union) who are F0 and do not violate the provisions on epidemic prevention and control, are entitled 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. Being pregnant or raising a child under 6 years old.
4. Union members and employees (at agencies, units and businesses that pay union fees) who die due to infection with 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 takes effect from the date of signing, 9 August 2021 and promulgation.
Instructions for implementation of regulations on compulsory Social Insurance
On 7 July 2021, the Ministry of Labour – Invalids and Social Affairs released Circular 06/2021/TT-BLDTBXH amending and supplementing Circular 59/2015/TT-BLDTBXH providing instructions on the implementation of regulations on compulsory Social Insurance.
Incomes calculated for compulsory Social Insurance contributions
According to Clause 26, Article 1 of this Circular, from 1 January 2021, the monthly salary on which Social Insurance premiums are based is specified at Point a, Item b1 of Point b and Item c1 of Point c, Clause 5, Article 3 in the Circular 10/2020/TT-BLDTBXH, specifically:
- Salary by job or title:
- The time-based salary of the job or title according to the salary scale, the salary table developed by the employer in accordance with the provisions of Article 93 of the Labour Code;
- For employees who receive a salary based on products or a package salary, the salary is calculated by time to determine the product unit cost or a package salary amount;
- Salary allowance as agreed by both parties: Salary allowances to compensate for factors such as working conditions, job complexity, living conditions and level of employment attraction that is not point of the base salary.
- Other additional amounts as agreed by the two parties: The additional payment with a specific amount along with the base salary agreed in the labour contract and are paid regularly in each pay period.
Incomes to be exempted from compulsory Social Insurance contributions
Also, in Clause 26 of the Circular, monthly pay subject to Social Insurance contributions will not include the following fringe benefits:
- Bonuses prescribed in Article 104 of the Labour Code;
- Rewards for innovation;
- Mid-shift meal allowance;
- Fuel costs and mileage allowance;
- Phone allowance;
- Travel allowance;
- Accommodation allowance;
- Babysitting benefit;
- Childcare benefit;
- Death benefit inherited from employee’s relative;
- Marriage allowance paid to employee’s relative;
- Employee’s birthday benefit;
- Benefits granted to employees in a difficult situation due to an accident at work or occupational disease; and
- Other support and allowances that are regulated as additional payments with non-specific amounts in conjunction with the base salary agreed under the employment contract and to be paid regularly or irregularly in every pay period, associated with the job process and performance of the employee.
Circular 06/2021/TT-BLDTBXH entered into force as of 1 September 2021.
Support for businesses, cooperatives and household businesses in the context of COVID-19
On 9 September 2021, the Government released Resolution 105/NQ-CP to support businesses impacted by COVID-19. Resolution 105 breaks the support into four main groupings:
- Prioritising vaccines, focussing on health and testing, and promoting the development of further vaccines and treatments.
- Ensuring production and supply chain maintenance and promotion, using “green channels’ to ensure supply chains are not interrupted and essential goods are circulated. This also direct the accepted of scanned copies of documents to ensure clearance of goods.
- Providing support for businesses facing financial difficulties by way of relief measures.
- Assisting employment, including relaxing regulations for employment of foreign experts and permitting employers to negotiate with employees for additional overtime. The Resolution instructs the Labour Ministry to reduce the requirement that foreign degrees and experience must be exactly relevant to the employment of foreign experts in Vietnam, and that previous Work Permits in Vietnam can again be used as evidence of experience for Work Permit applications.
The Resolution directs a range of Ministries and similar to implement the policies from the four groupings, and therefore we will expect to see specific solutions and implementations in the coming period.
Resolution 68 and Decision 23 implementing support for businesses and individuals impacted by the COVID-19 pandemic in Vietnam
The Vietnamese Government issued a number of regulations to support businesses and individuals in recent weeks.
On 1 July 2021, the Government issued Resolution 68/NQCP indicating policies to decrease and defer contribution payments into Social Insurance funds, provides funding support for businesses, and facilitates allowances for employees, individuals and business households impacted by COVID-19. Please read our detailed discussion on Resolution 68 here: Resolution 68 implementing policies to support businesses and individuals impacted by COVID-19 | Acclime Vietnam
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.
Notable points of the Resolution & Decision include:
- Reduction in Social Insurance contributions to 0% to the Occupational Accidents and Diseases Fund, for 12 months from 1 July 2021 to 30 June 2022.
- Deferral of contributions from employers and employees to the Retirement and Death Fund, for eligible employers for 6 months.
- Training funding support for stipulated eligible employers to improve employee’ vocational skills.
- Allowances for employees temporarily ceasing working without salary for 15 consecutive days or more.
- Allowances for employees suspended from work to implement COVID-19 quarantine for 14 days or more.
- Allowances for employees subject to loss of employment but ineligible for unemployment benefits.
- Allowances for children and people treating COVID-19 or medical isolation (F0 and F1).
- Financial support for tour guides and artists.
- Financial support for eligible business households.
- Loan support from the Vietnam Bank of Social Policies at a 0% interest rate to pay salaries for employees ceasing working and salaries during business recovery.
- Support for other individuals without labour contracts.
We have released a Client Alert indicating details of notable points of Decision 23. Click here to read our article.
Guidance on entry for foreign experts/individuals
On July 5, 2021, the National Steering Committee for COVID-19 Prevention and Control issued Official Letter 5322/CV-BCD guiding the entry of foreign experts/individuals invited or guaranteed by agencies or organisations (employer/inviting party/sponsor) during the COVID-19 pandemic.
The competent authority for entry approval
Foreign experts (including technical engineers, investors, managers, etc.) invited by agencies or organisations to enter Vietnam and their relatives; other foreign individuals (including exchange students and other cases of entry for humanitarian immigration, emergency, local treatment, etc.) are subject to the entry approval by the provincial People’s Committee.
Foreign experts/individuals invited by Diplomatic Missions, Foreign Consular Offices, Central Agencies and Ministries and other selected cases are subject to the entry approval by National Steering Committee.
Guidance for inviting parties/sponsors – requirements for written entry requests
Agencies or organisations as inviting parties or sponsors for foreign experts/individuals subject to entry approval by provincial People’s Committee need to submit written requests for entry of foreign experts/individuals including required information as follows:
- List of foreign experts/individuals and accompanying relatives expected to enter, purpose, entry and stay period (in which clearly states the necessity of entry in these cases);
- Plan for the transportation and the isolation at the isolation facility designated and selected by the provincial People’s Committee;
- The program, work plan, place of residence of the foreign experts/individuals and accompanying relatives in the locality;
- Contact information (address, phone number, email);
- A written commitment of the inviting parties/sponsors to be responsible for ensuring safety against COVID-19 when inviting foreign experts/individuals and their accompanying relatives to Vietnam, ensuring that:
- Foreign experts/individuals and their accompanying relatives are tested for SARS-CoV-2 by PCR technique within 3 days before the date of entry into Vietnam;
- Having international Health Insurance, or the inviting parties/sponsors commit to paying the costs of treatment in case of being infected with COVID-19; and
- Other documents (if any)
The implementation process for cases under the approval of the provincial People’s Committee is as follows:
- Based on the needs of agencies and organisations, the provincial People’s Committee will consider approving the list of foreign experts/individuals and their accompanying relatives and send the list to the Ministry of Public Security (Immigration Management Department) for consideration and settlement.
- Inviting parties/sponsors apply for an entry visa for the foreign experts/individuals and their accompanying relatives, enclosed with the written approval of the provincial People’s Committee to the Ministry of Public Security.
- The provincial People’s Committee designates and selects concentrated isolation facilities for foreign experts/individuals and their accompanying relatives.
- The provincial People’s Committees shall direct and organise to take sampling for testing, control of concentrated isolation and medical supervision after the end of the concentrated isolation period according to regulations and requirements of the Ministry of Health.
Requirements and processes for cases under the approval of the National Steering Committee are also stipulated at item 2, section III, part of Guidance.
This Official Letter took effect from the date of signing.
Official letters released
Official Letters are releases showing the interpretation and application of Vietnam’s Taxation Laws by applicable authorities, providing guidance to enterprises and individuals in Vietnam. In this update, we will focus on Official Letters indicating HR & Payroll matters.
PIT declaration is not required if there is no income subject to PIT
This is the highlight of the Official Letter 2393/TCT-DNNCN dated 1 July 2021, regarding PIT declaration, issued by the General Department of Taxation.
According to this document, Clause 6, Article 1 of the 2012 amended Law on PIT states that organizations and individuals paying income are responsible to declare, withhold, pay to the State Budget and finalise PIT for all income subject to PIT on behalf of the taxpayers.
This means only organizations and individuals that pay income subject to PIT must declare PIT. Those who do not pay income subject to PIT in a month/quarter will not be subject to the PIT declaration for that month/quarter.
This Official Letter 2393/TCT-DNNCN was issued on 1 July 2021.
Guideline for determining expenses related to COVID-19 when calculating PIT
On 13 August 2021, The Tax Departments of Hanoi issued Official Letter 31557/CTHN-TTHT answering questions about determining costs related to COVID-19 prevention when calculating PIT and CIT.
Along with determining CIT deductible expenses, The Tax Departments of Hanoi stipulated PIT deductible expenses determined as below:
Where a company incurs expenses to prevent the COVID-19 pandemic as prescribed by law, if these expenses clearly state the name of the beneficiary, they are to be included in taxable income subject to PIT as prescribed in Item đ.3.2, Clause 2, Article 2 of Circular 111/2013/TT-BTC.
Reducing the time of concentrated medical quarantine to 7 days for fully COVID-19 vaccinated arrivals
On 4 August 2021, the Ministry of Health issued Official Letter 6288/BYT-MT on reducing the time of concentrated medical quarantine for immigrants/arrivals who are fully COVID-19 vaccinated after previously reducing the period from 21 days to 14 days in Official Letter 5599/BYT-MT dated 14 July 2021.
Accordingly, a 7-day concentrated medical quarantine will be carried out and medical observation will continue for the next 7 days for those entering Vietnam who fully meet the following conditions:
- Received required COVID-19 vaccine doses (the last dose must be administered at least 14 days but no more than 12 months before the time of entry) and had a certificate of vaccination; and
- Received a negative test result for SARS-CoV-2 (by RT-PCR/RT-LAMP method) within 72 hours before departure and certified by the competent authority of the country conducting the test; or
- Have ever been infected with SARS-CoV-2 (have a certificate of a positive test for SARS-CoV-2 by one-step RT-PCR method within the last 6 months by the time of entry) and have a certificate of recovery from COVID-19 or equivalent documents confirming recovery issued by the competent authority in the country of treatment.
The guidance does not apply to cases of people entering to work for less than 14 days and cases of quarantine according to other regulations of the National Steering Committee for COVID-19 Prevention and Control and the Ministry of Health.
No penalty for late submission of tax returns during the lockdown period
The Tax Departments of Ho Chi Minh City and Hanoi issued Official Letter 6770/CTTPHCM-KK dated 19 July 2021 and Official Letter 29592/CTHN-KK dated 29 July 2021, respectively, guiding the submission of tax returns during the social distancing period.
The Official Letters apply to taxpayers being an organisation or individual whose head office and address (permanent or temporary residence) is in a locked-down area according to a decision/notice of a competent State agency due to the COVID-19 epidemic, and has a tax declaration obligation during the quarantine period (including the period of social distancing under direction/decision of the Government or local agency).
When the taxpayer is unable to submit the tax declaration, which may result in a late submission, the taxpayer will not be fined for administrative violations according to regulations, since this is considered as a force majeure event.
Reminder of selected key regulations coming into effect in Quarter 4, 2021
|Regulations||Issued date||Effective date||Key HR & Payroll items|
|Resolution 116/NQ-CP and Resolution 03/2021/UBTVQH15 on the policy to support employees and employers affected by the covid-19 from the Unemployment Insurance Fund||24 September 2021||1 October 2021||· Using 30,000 billion VND from the Unemployment Insurance Fund to support employees and employers impacted by COVID-19|
· Financial aid for employees paying UI contributions to ease COVID-19 impacts
· Applicable employers are entitled to 0% payment to Unemployment Insurance Fund for 12 months, from 1 October 2021 to 30 September 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.