Our November 2017 Tax Update publication focuses on upcoming changes for payroll expenses and calculations for Vietnamese employers, along with a selection of Official Letters released by the tax authorities.

PAYROLL CHANGES EFFECTIVE 1 JANUARY 2018, FOR VIETNAMESE & FOREIGN EMPLOYEES

The Ho Chi Minh City Social Insurance Department issued Official Letter 1734/BHXH-QLT, effective 1 January 2018, with guidance for the upcoming changes to the Social Insurance Laws. Key elements of the Official Letter are:

(i) Social Insurance (which includes Occupational Accident and Disease Insurance) is compulsory for all Vietnamese employees with labour contracts exceeding 1 month (except for probation contracts) and also for foreign individuals working in Vietnam with a work permit, practice certificate or other license.

(ii) Subject to capped amounts, foreign employees will be liable for 8% Social Insurance and 1.5% Health Insurance to be deducted from their salaries, with their employer paying 17.5% Social Insurance and 3% Health Insurance on top of the salary. Prior to 1 January 2018, only the Health Insurance portion was payable.

(iii)The salary used to calculate Social insurance, Health insurance and Unemployment insurance (“SHUI”) contributions includes any basic salary, plus allowances and other additional payments stated in the labour contract and paid regularly, including:

•  Position allowances
•  Responsibility allowances,
•  Hardship, hazardous and toxic allowances
•  Area allowances
•  Mobility allowances
•  Attraction allowances
•  Other allowances having similar nature as the above

For more information, click Vietnam Tax Update November 2017 – Domicile


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