Legal update on May 2021 (Part 2)

BLawyers Vietnam - Legal update

Our Vietnam legal update #161 would lead you on 04 legal issues:

I. Conditions for calculating deductible expenses when determining CIT for the leave expenses for employees who have not finished their leave

Binh Duong Province Tax Department issued the Official Letter No. 6875/CTBDU-TTHT dated 20 April 2021 on guiding about the conditions for calculating deductible expenses when determining CIT for the leave expenses for employees who have not finished their leave with the following contents:

In case the enterprise incurs the payment for leave for employees who have not finished their leave in the year if it meets the following conditions:

  • The payment meets the conditions prescribed by law on deductible and non-deductible expenses when determining income;
  • The payment must comply with the provisions of the Labor Code.

II. Deductible expenses when determining the income subject to CIT for salary expenses for foreign workers who have not been granted work permits

Vinh Phuc Province Tax Department issued the Official Letter No. 3960/CTVPH-TTHT dated 29 April 2021 on guiding the deductible expenses when determining the income subject to CIT for salary expenses for foreign workers who have not been granted work permits with the following content:

In case the enterprise signed a labor contract with a foreigner and has not been granted work permits from the Vietnamese competent authority according to the Labor Code when determining taxable income, the salary and related expenses paid by the enterprise are not enough reason for calculating deductible expenses.

III. Foreign contractor tax finalization

On 4 May 2021, Hanoi Tax Department issued the Official Letter No. 14198/CTHN-TTHT to guide on the foreign contractor tax finalization with the following contents:

  • In case the Foreign Contactor (“FC”) (which is the organization or individual doing business in Vietnam or having income in Vietnam) has income in Vietnam based on the contract between FC with Vietnamese organization, that FC shall be subject to foreign contractor tax.
  • In case the FC is subject to VAT being directly calculated on the value added, CIT which are calculated based on the percentage of its revenue, the Vietnamese organization shall be responsible for declaring CIT on revenue according to the time of arising payment. The finalization shall be made when the contract is finished.

IV. Paying monthly pensions, social insurance, and unemployment insurance during the COVID-19 pandemic prevention and control period

Vietnam Social Security issued the Official Letter No. 1135/BHXH-TCTT dated 29 April 2021 to guide on paying monthly pensions, social insurance, and unemployment insurance during the COVID-19 pandemic prevention and control period with some notable points as follows:

  • The payment of pensions, social insurance of May, June 2021 shall be paid in the same payment period (finished before 20 May 2021).
  • All changes about the method, time, and place of payment shall be announced for the beneficiaries to know and perform.
  • Strictly comply with the 5K requirements of the Ministry of Health and inspect, supervise the process of paying pensions and insurance at payment points to ensure COVID-19 prevention and control.

For down-loading: 

Legal Update #161 (EN version)

Maybe you are interested in reading other updates: May 2021 (Part 1)April 2021 (Part 5)April 2021 (Part 4)April 2021 (Part 3) | April 2021 (Part 2)April 2021 (Part 1)March 2021 (Part 4)March 2021 (Part 3) | March 2021 (Part 2) | March 2021 (Part 1) 

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