Labour Regulations Update in December 2023

I. Official letter No.4208/BHXH-TST on strenthening collection and reduction of delayed payments for Social Insurance (SI), Health Insurance (HI), Unemployment Insurance (UI)

On 13 December 2023, Vietnam Social Insurance issued the Official Letter No. 4208/BHXH-TST on strengthening collecting and reducing the amount of late payment of SI, HI, and UI.

Accordingly, with the goal of reducing the rate of late payment of SI, HI, and UI to the lowest level, Vietnam SI requests the Directors of Provincial Social Insurance and Heads of relevant units under Vietnam SI to effectively implement a number highlights of contents as follows :

• Deploy to flexibly work with units that are slow to pay Social Insurance such as sending notices to push, working directly, or organizing customer conferences, organizing inspection..; Publicize information about planned inspections and transfer petitions for prosecution to investigation agencies for units that are slow to pay.
• Propose competent authorities not to reward or honor units that are slow in paying SI, HI, and UI.
• Continue to urge the Provincial Social Insurance to organize and implement solutions as directed in Official Letter No. 2279/BHXH-TTKT dated 26 July 2023 of Vietnam SI on strengthening unexpected specialized inspections and handling administrative violations regarding paying SI, HI and UI, consolidating to report to the General Director.
• Instruct Provincial Social Insurance to coordinate with news and press agencies to publicize the identities of units that are slow to pay or avoid paying SI, HI, and UI on local mass media.

II. Official letter No.5852/TCT-PC regarding sanction of administrative violation for individuals who do not declare Personal Income Tax (PIT) finalization

On 21 December 2023, the General Department of Taxation issued the Official Letter No. 5852/TCT-PC regarding sanction of administrative violations for individuals who do not declare PIT finalization.

Accordingly, in case the taxpayer must directly declare and pay PIT with the Tax Authority, the taxpayer is responsible for submitting the PIT finalization dossier and paying the full amount of outstanding PIT to the State Budget. In case the taxpayer does not submit the PIT finalization dossier or late submits the PIT finalization dossier that is overdue for more than 90 days with the outstanding amount payable, the taxpayer is determined to have committed tax evasion according to the provisions at Point a, Clause 1, Article 17 of Decree No. 125/2020/ND-CP, is not an act of false declaration as prescribed in Article 16 of Decree No. 125/2020/ND-CP.

III. Official letter No.5250/TCT-DNNCN on income conversion to calculate Personal Income Tax (PIT)

On 24 November 2023, the General Department of Taxation issued the Official Letter No. 5250/TCT-DNNCN on income conversion to calculate PIT.

According to the guidance in this Official Letter, the income used as a basis for conversion into taxable income is net take home income (excluding tax-exempt income) plus (+) benefits paid by Employer for Employees (if any) minus (-) deductions.

Formula for calculating converted income:

In which:

• Net take home income is the salary and wage excluding PIT which Employee receives every month (excluding tax-exempt income).
• The amounts paid on the Employee’s behalf are the benefits in cash or in kind paid to Employee by Employer according to the instructions in Point dd, Clause 2, Article 2 of Circular No. 111/2013/TT-BTC and Clause 1 of this Article 2, 3 and 4 of Article 11 of Circular No. 92/2015/TT-BTC.
• Deductions are tax relief, statutory insurance, contributions to the voluntary pension fund, charitable donations, humanitarian and education promotion as guided in Article 9 of Circular No. 111/2013/TT-BTC and Article 15 of Circular No. 92/2015/TT-BTC”.

The Ministry of Finance also provided a guidance for a similar issue on the Official Letter No. 2037/BTC-TCT dated 16 February 2017.

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