Vietnam - 11 highlight points in 2011 wage labor

1. Uniform expense in cash or in kind to employees is not exceeding 5,000,000 VND/employee/year according to Circular No. 18/2011/TT-BTC dated February 10, 2011 by The Ministry of Finance. The maximum spending for the uniform is also applied to personal income tax (PIT) when determining tax income.

 If these expenses are under 5,000,000 VND/year, they will not be counted when determining PIT.

For more details, please refer to:http://www.nvmgroup.com/en/professional-compliance/265

2. The minimum wage increased from 730,000 VND to 830,000 VND from May 01, 2011 pursuant to Decree No. 22/2011/ND-CP. Thus, the maximum wage that makes SI-HI-UI contribute was capped at 16,600,000 VND.

For more details, please refer to:http://www.nvmgroup.com/en/professional-compliance/263

3. The changes of Recruitment and Management foreign workers in Vietnam pursuant to Decree No. 46/2011/ND-CP dated June 17, 2011. This Decree amended and supplemented to Decree No. 34/2008/ND-CP dated March 25, 2008 on employment and administration of foreign employees working in Vietnam. This Decree took effect from August 01, 2011.

For more details, please refer to:http://www.nvmgroup.com/en/professional-compliance/271

4. Changes in the declaration and reduction of PIT from July 01, 2011 pursuant toCircular No. 28/2011/TT-BTC dated February 28, 2011 of the Ministry of Finance.The content of the tax administration is guided in this Circular including: tax preparation, tax calculation; tax assessment; pay taxes; tax commissioner; responsibility for tax; tax exemption and reduction procedures; remission of tax arrears or fines; reimbursement procedure, compensation tax, tax inspections; settle complaints, Settlement of tax-related complaints and denunciations and the new forms for PIT declaration. This Circular took effect from April 14, 2011. 

For more details, please refer to: http://www.nvmgroup.com/en/professional-compliance/270

5. On 4 Aug 2011, The Ministry of Finance issued Circular 113/2011/TT- BTC to amend and supplement the guidance of PIT Law mentioned in Circular No. 62/2009/TT-BTC dated March 27, 2009 and Circular No. 84/2008/TT-BTC dated September 30, 2008. This Circular took effect from September 19, 2011.

Organizations shall withhold the PIT from incomes such salaries, wages, remuneration to individuals from VND 1,000,000/payment upward (instead of VND 500,000/payment as current) base on tax rate which included 10% from the total income for who have personal tax code and 20% from the total income for who does not have personal tax code (instead of 10% as a current).

For more details, please refer to: http://www.nvmgroup.com/en/professional-compliance/278

6. Government issued Resolution 08/2011/NQ-CP in implementation of the exemption PIT for individuals and enterprise.

For more details, please refer to:http://www.nvmgroup.com/en/professional-compliance/285

7. On August 22, 2011, Government issued Decree 70/2011/ND-CP to define the new minimum wage for employees. According to this Decree, the minimum wage increased VND 300,000 – 650,000 per month higher than the old one. This new minimum wage is the floor salary for employees and employers to negotiate the salary. This decree took effect from October 05, 2011.

For more details, please refer to: http://www.nvmgroup.com/en/professional-compliance/286

8. On, November 03, 2011, The War Invalids and Social Welfare Department issuedCircular No. 31/2011/TT-BLDTBXH providing detailed instruction on the implementation of Decree 34/2008/ND-CP dated March 25, 2008 of the Government and Decree 46/2011/ND-CP dated June 17, 2011 of the Government amending and supplementing number of articles and forms of Decree 34/2008/ND-CP regarding recruiting and managing foreign labor in Vietnam. This Circular took effect from December 18, 2011.

For more details, please refer to:http://www.nvmgroup.com/en/professional-compliance/311

9. Pursuant to Official Letters No. 2447/LDTBXH-BHXH and No. 3039/BHXH-THU to guide for the compulsion insurance payment in the probation with 02 specific cases. The first case is defined clearly the probation in the labor contract and the rest is not mention the probation in the labor contract.

For more details, please refer to:http://www.nvmgroup.com/en/professional-compliance/299

10. Pursuant to Social Insurance Law No. 71/2006/QH11, Health Insurance Law No. 25/2008/QH12, and Decrees and Circulars on Social Insurance and Health Insurance Law, on October 25, 2011, Government issued Resolution No. 1111/QD-BHXH on collecting management of Social Insurance, Health Insurance, Social Insurance Book, and Health Insurance Card.

The most important point in Resolution No. 1111/2011/QD-BHXH is the changes of forms and regulations of Social Insurance and Health Insurance. This Resolution points out the purpose of each form, whose responsibilities to make, when to make, basis to make, and how to make these forms.

Resolution No. 1111/2011/CP-BHXH took effect from January 01, 2012. However, until now there is no guidance to apply this Resolution as well as the new forms in declaration of Social Insurance and Health Insurance report. Hence, the employers and employees still wait for detailed instruction on implementation from Social Insurance Department.

For more details, please refer to: http://www.nvmgroup.com/en/professional-compliance/317

11. On November 11, 2011, The Ministry of Finance issued Circular No. 154/2011/TT-BTC giving of Decree No. 101/2011/ND-CP dated November 01, 2011 which provided the detailed implementation of Resolution No. 08/ 2011/QH13 issued by the National Assembly on additional issuance of some tax solutions in reducing difficulties for enterprises and individuals. Also, Tax Department pointed out the detailed process of PIT finalization in 2011 in this Circular.

For more details, please refer to: http://www.nvmgroup.com/en/professional-compliance/313

Brief by NVM Group

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