VIETNAM Law and Practice Contributed by: Thang Nguyen, Minh Nguyen and Nguyet Le, ACSV Legal
• business managers, controllers, and repre - sentatives of state or enterprise capital under the 2020 Law on Enterprises; • individuals in non-salaried elected manage - ment roles in co-operatives and co-operative unions, as defined by the 2023 Law on Coop - eratives; and • part-time workers earning a monthly salary equal to or above the statutory SI threshold. Applicable mandatory insurance contribution rates The rates of SI, HI and UI contributions paid for Vietnamese employees are:
income or additional compensation. Employee contributions to statutory obligations are tax- deductible, reducing their taxable income and potentially lowering their tax liability. Certain foreign employees who are internally transferred within a group, as well as employees who have reached the statutory retirement age, are exempt from mandatory SI contributions. 5.2 Taxes Applicable to Businesses CIT Scope CIT law applies to a corporate taxpayer in Viet - nam. Unlike PIT law, CIT law does not explicitly include the concept of resident or non-resident. Instead, it adopts the principle that a corporate taxpayer, whether located in Vietnam or over - seas, must pay CIT for its incomes raised in Viet - nam, or raised worldwide through its business facilities in Vietnam, unless otherwise stipulated in treaties to which Vietnam is a party. For instance, if a foreign investor has a subsidi - ary company incorporated in Vietnam or has a permanent establishment in Vietnam, this for - eign investor must pay the CIT to the Vietnam - ese authorities on its worldwide income earned through the Vietnamese subsidiary company or in connection with operations of the permanent establishment. However, CIT law also applies to companies without a permanent establishment in Vietnam. If this is the case, the company is only required to pay tax on income raised in Vietnam. CIT is also imposed on earnings obtained through the production and trading of goods or services, or from other activities such as capital transfers or real estate transactions, etc.
Employee: • SI: 8.0% • HI: 1.5% • UI: 1.0% • Total: 10.5% Employer: • SI: 17.5% • HI: 3.0% • UI: 1.0% • Total: 21.5%
The salary used for the calculation of the con - tributions consists of the monthly salary rate and certain allowances prescribed in the labour contract. However, the contribution amount is subject to a cap of 20 times the minimum salary for SI/HI contributions, as well as 20 times the minimum regional salary for UI contributions. It is important to note that the minimum salary and minimum regional salary are determined by the government and undergo an annual review. Statutory employer contributions are tax-exempt for employees and are not counted as taxable
912 CHAMBERS.COM
Powered by FlippingBook