VIETNAM: Update March 2020
Updated: Apr 20
Date of Issue: 4 March 2020
On 4 March 2020, the Prime Minister of Vietnam released the Directive regarding urgent objectives and solutions for assisting businesses facing difficulties and assurance of social welfare amid Covid-19 pandemic.
The below are some highlighted specific objectives and solutions:
Reduce the time needed to process loan applications; improve accessibility of capital; promptly provide assistance such as reduction or exemption of loan interest, retention of loan category, fee reduction, etc.;
Keep promoting cashless payment; reduce or cut cashless payment service charges, especially online payment for public administrative services;
Deferral of tax and land rental payment for businesses affected by Covid-19;
Reduction and exemption of fees and charges to the Government to assist entities affected by Covid-19;
Delaying collection of social insurance from entities affected by Covid-19 until the end of June or December 2020 without charging late payment interest;
Adjusting deadlines for payment of union contributions to assist enterprises and organizations affected by Covid-19
Simplification of administrative procedures and reduction of logistics costs in maritime, air, road, inland waterways and rail transport;
Consider exemption of periodic tax inspection in 2020 at enterprises that are not suspected of violations;
Increasing personal income tax deductions to reduce tax burden on the people;
Prepare the documentation on corporate income tax and assistance for small and medium enterprises; and
Do not increase state-fixed prices for input materials in Q1 and Q2/2020.
Date of Issue: 17 March 2020
Vietnam Social Insurance issued guidance on putting on hold contribution to retirement and survivorship fund for enterprises which are impacted by COVID-19.
Accordingly, companies which are conducting layoffs from 50% of their current headcounts or suffering loss of over 50% of total asset value will be subject to put on hold contribution to retirement and survivorship fund from approved date till end of June 2020. If the outbreak is still going on, the suspension will be considered to be extended till December 2020.
Date of Issue: 18 March 2020
Vietnam General Confederation of Labour (VGCL) on 18 March 2020 issued an Official Letter on delaying in payment of Trade Union fee for enterprises facing difficulties due to COVID-19.
In particular, the VGCL allows for the delay of payment of trade union fees during the first six months of 2020 until 30 June 2020. Nevertheless, this delay is only applied to companies which have at least 50% of the total number of employees who are subject to social insurance contribution but must temporarily suspend working.
By the end of June 2020, if such companies still have been adversely affected by COVID-19, the payment of trade union fees can be delayed until 31 December 2020.
Date of Issue: 25 March 2020
The Ministry of Labour, Invalids and Social Affairs has issued an Official Letter No. 1064/BLDTBXH-QHLDTL on salary for employees during COVID-19 pandemic. Below is major content of the letter:
▪ Salary during working cease will be based on Article 98 of the Labour Code.
▪ Employees who suffer work cease due to the impact of COVID-19, including expat employee who cannot come back to work as required by local authorities; employees who are under quarantine; or employees whose business cannot resume operations, can negotiate salary but no less than regional-based minimum wage stipulated by the Government.
▪ Enterprises facing sourcing and market difficulty can temporarily transfer employees to other positions; suspend their labour contract; or terminate their
labour contract according to current labour regulations.
Date of Issue: 26 March 2020
On 26 March 2020, Ministry of Finance submitted the statement of a Decree on deferral of tax and land rental payment. Draft of the Decree is including the following important points:
Enterprises, organisations, household business, individual business having primary activities related to business activities as below:
Agriculture and related service activities, forestry and related service activities, fishing and aquaculture;
Manufacturing and processing food, weaving, producing clothes, producing shoes, producing products from rubber, producing electronic products, computers and optical products, manufacturing cars (except for the production of cars of 9 seats or less);
Rail transport, passenger transport by bus, other road transport, water transport, air transport, warehousing and supporting activities for transportation;
Accommodation and catering services;
Activities of travel agents, tour operators and supporting services related to tourism promotion and organization;
Education and training; health and social assistance activities;
Creative, artistic and recreational activities; sporting activities, botanical gardens, zoos and nature reserves, amusement park activities, and theme parks, film screenings; and
Small and micro businesses.
2. Deferral of tax and land rental payment
(i) Value Added Tax (except VAT of imported goods) Extension of tax payment for 5 months since the deadline of filing and make VAT payment of March, April, May and June of 2020 (for enterprise filling monthly VAT) or the deadline of filling and make VAT payment of Q1 and Q2 of 2020 (for enterprise filling quarterly VAT).
(ii) Corporate Income Tax (CIT)
Extension of tax payment for 5 months since the deadline of filling and make CIT payment for the remaining annual CIT liabilities of 2019 and the estimated quarterly CIT liabilities of Q1 and Q2 of 2020.
(iii) Land rent
Extension of payment term for land rent for the first payment of 2020. The extension time is 5 months since 31 May 2020. The latest deadline for land rental payment is on 31 October 2020.