Each quarter, Acclime Vietnam releases our 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 or upcoming reporting obligations to authorities.
Reminder for the return to the statutory rate of 1% for Unemployment Insurance
According to Resolution 116/NQ-CP issued by the Government on 24 September 2021 on utilising the Unemployment Insurance (UI) Fund to support employees and employers in difficult situations due to COVID-19, employers have been entitled to a reduction in the UI contribution rate from 1% to 0% of the monthly salary fund subject to Unemployment Insurance, for 12 months, from 1 October 2021 to 30 September 2022.
Employers need to update the Unemployment Insurance rate to 1% when preparing payroll and obligation calculations from 1 October 2022.
We have updated our Vietnam payroll quick guide applicable from 1 October 2022 on our website, reflecting the return to the statutory rate of 1% for Unemployment Insurance, please click here for your reference.
Use of PIT withholding certificates from 1 July 2022
On 13 September 2022, the Hanoi Tax Department – General Department of Taxation released Official Letter 45085/CTHN-TTHT on registering to use the self-printed PIT withholding certificates.
Specifically, from 1 July 2022, tax authorities have no longer sold PIT withholding certificates which were printed by tax authorities. During the time when electronic PIT withholding certificates have not yet been deployed, organisations and enterprises can use PIT withholding certificates in the form of self-issuance. Where PIT withholding certificates which were bought from tax authorities still remain, the enterprises are allowed to continue using them.
PIT of non-tax resident foreign experts
On 3 August 2022, the Hanoi Tax Department released Official Letter 37870/CTHN-TTHT regarding PIT when hiring foreign experts.
Accordingly, where a company signs a labour contract with a foreign expert who meets the conditions of being a non-tax resident in Vietnam (being present in Vietnam for less than 183 days in a calendar year or 12 consecutive months from the first day of presence in Vietnam, or having no permanent residence in Vietnam, as prescribed in Article 1 of Circular 111/2013/TT-BTC dated 15 August 2013 of the Ministry of Finance, and Article 2 of the Law on PIT 04/2007/QH12 dated 21 November 2007 of the National Assembly), then:
- In case the company’s payments to foreign experts are determined as income from salaries and wages, which the taxpayer is entitled to in any form arising in Vietnam, the company is responsible for withholding 20% before paying to individuals.
- In case individuals have incomes subject to PIT (except for business individuals), the company needs to register tax for employees according to the provisions of Clause 2, Article 4 of Circular 105/2020/TT- BTC dated 3 December 2020 of the Ministry of Finance.
Guide on additional declaration where residence status of foreign employee changes
Tax Department of Ho Chi Minh City have issued Official Letter 6366/CTTPHCM-TTHT providing guidance on changing residence status of foreign employees after tax payment.
Accordingly, where an enterprise has declared and paid PIT according to the progressive tax rate, the foreign employee is later determined to be a non-resident individual in the tax year, the enterprise is required to make a revision of the corresponding monthly (or quarterly) PIT declaration according to the tax rate of 20%.
When making a revision of tax declaration, if there is an additional PIT payable, the enterprise has to pay the arising tax amount and be responsible for late payment interest as prescribed; where overpaid tax is incurred, it shall be handled according to Clause 1, Article 60 of the Law on Tax Administration 38/2019/QH14.
During the year-end tax finalisation, the enterprise declares the income paid to the foreign employee, who becomes non-resident as mentioned above, according to the annual PIT finalisation return form 05/QTT-TNCN and appendix 05-2/BK-QTT-TNCN enclosed with Circular 80/2021/TT-BTC.
Pilot Implementation of integrating health insurance into a chip-based citizen identity card
According to Decision 06/QD-TTg dated 6 January 2022 approved by the Prime Minister, the goal in 2022 is to gradually replace personal papers on the basis of integrating and authenticating personal information into the national population database. Since then, it is easy to use the chip-based citizen identity card, the national electronic identification application of the Ministry of Public Security to replace the health insurance card when performing medical examinations and treatment.
To facilitate people when having medical examinations and treatment, the Ministry of Health issued Official Letter 931/BYT-BH providing guidance on the pilot implementation of medical examination and treatment using a chip-based citizen identity card. Employees engaging in employment under enterprises must contact the person in charge of social insurance or the social insurance department to synchronise their personal information with the national database before applying this method.
Reminder of upcoming periodical reports in Quarter 4, 2022 and early January 2023
|Upcoming Periodical Reports||Deadline|
|Semi-annual Report on Changes to Employment||Prior to 5 December|
|Semi-annual Report on Employment of Foreign Employees||Prior to 5 January of the following year|
|Semi-annual Report on Labour Accidents||Prior to 10 January of the following year|
|Annual Report on Occupational Safety and Hygiene||Prior to 10 January of the following year|
|Annual Report on Unemployment Insurance Contributions||Prior to 15 January of the following year|
|Annual Report on Representative Office||By 30 January of the following year|
|Quarterly Report on using PIT withholding certificate||By 31 January of the following year|
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.