This November 2018 publication on Tax and Accounting updates looks primary and employment and labour changes this month, with a number of key changes for foreign employees arising, along with our regular review of recent Official Letters released by the Tax Authorities.

IMPLEMENTATION OF SOCIAL INSURANCE FOR FOREIGN EMPLOYEES

On 15 October 2018, the Vietnamese Government released Decree 143/2018/ND-CP providing guidance for the implementation of Social Insurance obligations for foreign employees working in Vietnam.

The Decree takes a phased-in approach to Social Insurance, with initial implementation commencing from 1 December 2018, and a full implementation from 1 January 2022. The
specific contribution rates for employers and employees are indicated as follows.

Employer contribution:
• 3% of employee salaries (subject to standard contribution caps) for maternity and sick leave regimes from 1 December 2018.
• 0.5% of employee salaries (subject to standard contribution caps) for occupational health and safety from 1 December 2018.
• 14% of employee salaries (subject to standard contribution caps) for retirement fund from 1 January 2022

Employee contribution:
• 8% of their salaries for retirement fund contribution from 1 January 2022

(Please note that contribution requirements cease where individuals reach the stated Vietnamese retirement age.)

For further information regarding the implementation of Social Insurance in Vietnam for foreign employees, please refer to our Client Alert released on 17 October 2018.

For more information, click Vietnam Tax Update November 2018 – Domicile

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