THE SOCIAL INSURANCE LAW NO. 41/2024/QH15
On 29 June 2024, the National Assembly promulgated the Social Insurance Law of 2024. The 2024 Social Insurance Law includes several noteworthy new points as follows:
1. Subjects of application in mandatory and voluntary social insurance
Addition of subjects required to participate in compulsory social insurance includes:
Business household owners (with business registration);
Part-time workers in hamlets and residential groups, similar to part-time workers at the commune level;
Part-time workers (workers employed under flexible arrangements);
Cases where no labor contract or agreement by another name is concluded, but the content reflects paid employment and one party’s management, administration, and supervision, in accordance with the 2019 Labor Code.
2. Social Retirement Benefits for Those Without Pensions
Vietnamese citizens aged 75 and older who do not receive pensions, monthly social insurance benefits, or other monthly social allowances and submit a written request for social retirement benefits will be eligible for social retirement benefits guaranteed by the state budget;
The monthly social retirement benefit amount is determined by the government in accordance with socio-economic development conditions and the state budget's capacity at each period. Every three years, the government reviews and considers adjusting the social retirement benefit amount.
3. Sickness Benefits
Addition of regulations for the case of half-day sickness as follows:
he daily sickness allowance is calculated by dividing the monthly sickness allowance by 24 days. The half-day sickness allowance is calculated as half of the daily sickness allowance;
When calculating the sickness allowance for employees who take partial days off for sickness, a leave of less than half a day is considered half a day; from half a day to less than a full day is considered a full day.
4. Maternity Benefits
Addition of maternity benefits to the voluntary social insurance (SI) policy. Employees participating in voluntary SI (including both female and male workers) who give birth, if they meet the condition of having paid SI contributions for at least 6 months within the 12 months prior to childbirth, will receive an allowance of 2,000,000 VND per child.
The leave period for maternity benefits in cases of miscarriage, abortion, stillbirth, fetal death during labor, or ectopic pregnancy, as prescribed by a licensed medical practitioner at a healthcare facility, is regulated up to a maximum limit.
5. Retirement Benefits
Employees who reach retirement age and have contributed to social insurance for at least 15 years are entitled to a monthly pension if they meet the conditions specified in Article 64 of the 2024 Social Insurance Law.
Thus, the Social Insurance Law of 2023 has reduced the minimum number of years of Social Insurance contributions required to receive a monthly pension from 20 years to 15 years.
6. Withdrawal of Social Insurance One-Time
The new SI Law limits the cases in which one-time SI withdrawal is allowed. Accordingly, except for special cases specified in Article 70 of the SI Law, those participating in SI after 01 July 2025, will not be eligible for one-time SI withdrawal.
7. Measures for Handling Evasion of Mandatory Social Insurance and Unemployment Insurance Contributions
Addition of some forms of penalties for acts of evading compulsory SI and unemployment insurance contributions as follows:
Mandatory payment of the evaded amount; additionally, a payment equal to 0.03% per day of the evaded social insurance and unemployment insurance amount and the number of days of evasion into the social insurance and unemployment insurance funds;
Administrative penalties or criminal prosecution in accordance with the law;
Ineligibility for awards or commendations.
DECREE NO. 72/2024/ND-CP ON REDUCING VALUE ADDED TAX (VAT) BY 2% UNTIL 31 DECEMBER 2024
On 30 June 2024, the Government issued Decree No. 72/2024/ND-CP regulating the VAT reduction policy according to Resolution No. 142/2024/QH15 dated 29 June 2024 of the National Assembly, including the following points to note:
A VAT rate of 8% will apply to goods and services currently subject to a 10% VAT rate, except for the categories of goods and services specified in Appendices I, II, and III attached, including:
Telecommunications;
Information technology;
Financial activities, banking, securities, insurance, real estate business;
Metals, cast metal products, mining products (excluding coal mining), coke, refined petroleum products, chemical products;
Goods and services subject to special consumption tax.
Accordingly, the VAT reduction for each type of goods and services is applied uniformly at all stages of import, production, processing, and commercial business.
Particularly for sold coal products (including cases where coal is exploited and then screened and classified according to a closed process before being sold) are subject to VAT reduction.
Notes:
Coal products included in Appendix I issued together with this Decree, at any stages other than the stage of exploitation and sale, will not be subject to VAT reduction.
Corporations and economic groups that carry out a closed process to sell are also subject to VAT reduction on sold coal products.
In cases goods and services listed in Appendixes I, II and III issued with this Decree are not subject to tax or are subject to a tax rate of 5%, they will not be subject to VAT reduction.
The VAT reduction policy this time is not different from the regulations stated in Decree No. 94/2023/ND-CP for the first 6 months of 2024.
DECREE NO. 81/2024/ND-CP ON AMENDING AND SUPPLEMENTING THE LIST OF SPECIAL PREFERENTIAL IMPORT TAX
On 04 July 2024, the Government issued Decree No. 81/2024/ND-CP, which amends and supplements certain provisions of Decree No. 119/2022/ND-CP dated 30 December 2022, regarding the special preferential import tax rates (AKFTA rates) to implement the new ASEAN-Korea Free Trade Agreement for the period 2023 – 2027. Including the following points to note:
1. Amendmending the List of Special preferential import tax rates of Vietnam
0% AKFTA rate is applied to various types of goods, such as live animals, meat and edible meat offal after slaughter, etc;
5% AKFTA rate is applied to certain goods such as mineral or chemical fertilizers containing phosphates (phosphate fertilizers), cosmetics or makeup products and skincare products (excluding pharmaceuticals), including sunscreens and tanning products, and products for nail care.
2. Supplementing the List of Goods subject to Special preferential import tax rates outside quota
80% AKFTA rate is applied to goods like sugar and sugar confectionery, such as cane sugar, beet sugar, and chemically pure sucrose in solid form;
50% AKFTA rate is applied to goods such as salt, sulfur, earth and stones, gypsum, lime, and cement.
3. Supplementing regulations on AKFTA rates for Quota-subject goods in groups 04.07, 17.01, 24.01, and 25.01
In-quota AKFTA rate is the rate specified in the special preferential import duty rate list;
Out-of-quota AKFTA rate is the rate specified in the list of goods subject to special preferential import tax rates outside quota.
4. Changing the implementation period:
The new rates will be applied from 28 November 2023 to 31 December 2027.
DECREE NO. 73/2024/ND-CP REGULATING BASIC SALARY AND BONUS REGIMES FOR OFFICIALS, PUBLIC EMPLOYEES, AND ARMED FORCES
The Government issued Decree No. 73/2024/ND-CP on 30 June 2024, regulating the basic salary and bonus regimes for officials, public employees, and the armed forces. Accordingly, the basic salary is 2.34 million VND (effective from 01 July 2024).
1. The basic salary is used as the basis for:
- Calculating the salary levels in the salary tables, allowances, and implementing other regimes as prescribed by law for the aforementioned subjects;
- Calculating activity fees and living allowances according to the law;
- Calculating deductions and entitlements based on the basic salary.
2. Basic salary:
From 01 July 2024, the basic salary is 2.34 million VND per month.
3. For agencies and units currently applying specific financial and income mechanisms at the central level:
Maintain the difference between the salary and additional income of June 2024 of officials, public employees, and public servants with the salary from 01 July 2024, after modifying or abolishing the specific financial and income mechanisms.
While these mechanisms are not yet modified or abolished, apply the monthly salary and additional income calculated according to the basic salary of 2.34 million VND per month under the specific mechanisms from 01 July 2024, ensuring that it does not exceed the salary and additional income received in June 2024 (excluding salary and additional income adjusted by rank, grade when promoted).
In cases where, according to the above principles, the salary and additional income from 01 July 2024, under the specific mechanisms are lower than the salary according to the general regulations, implement the salary regime according to the general regulations.
DECREE NO. 74/2024/ND-CP REGULATING MINIMUM WAGES FOR EMPLOYEES WORKING UNDER LABOR CONTRACTS
Decree No. 74/2024/ND-CP regulates the monthly minimum wage and hourly minimum wage for employees working for employers according to regions as follows:
1. The monthly minimum wage in 4 regions is regulated as follows:
- Region I: an increase of 280,000 VND, from 4,680,000 VND/month to 4,960,000 VND/month;
- Region II: an increase of 250,000 VND, from 4,160,000 VND/month to 4,410,000 VND/month;
- Region III: an increase of 220,000 VND, from 3,640,000 VND/month to 3,860,000 VND/month;
- Region IV: an increase of 200,000 VND, from 3,250,000 VND/month to 3,450,000 VND/month.
The hourly minimum wage in Region I increases from 22,500 VND/hour to 23,800 VND/hour, Region II from 20,000 VND/hour to 21,200 VND/hour, Region III from 17,500 VND/hour to 18,600 VND/hour, and Region IV from 15,600 VND/hour to 16,600 VND/hour.
2. The application of regional minimum wages is determined by the location of the employer's operations as follows:
- Employers operating in a region will apply the minimum wage regulations for that region.
- Employers with units or branches operating in different regions with different minimum wages will apply the minimum wage regulations for the region where the unit or branch operates.
- Employers operating in industrial zones and export processing zones located in areas with different minimum wages will apply the highest regional minimum wage.
- Employers operating in areas where administrative divisions are renamed or divided will temporarily apply the minimum wage regulations for the area before the renaming or division until the Government issues new regulations.
- Employers operating in newly established areas from one or more areas with different minimum wages will apply the highest regional minimum wage.
- Employers operating in newly established provincial cities from one or more areas belonging to Region IV will apply the minimum wage regulations for provincial cities remaining in Section 3 of the Appendix attached to Decree No.74/2024.
Accordingly, businesses need to consider adjusting the minimum and maximum contributions to social insurance and unemployment insurance based on the adjustment of the regional minimum wage levels.
OFFICIAL LETTER NO. 3179/TCHQ-GSQL REGARDING DOMESTIC ENTERPRISES SELLING GOODS TO EXPORT PROCESSING ENTERPRISES
On 1 July 2024, the General Department of Customs provided several opinions in response to the letter from the General Department of Taxation, including the following points to note:
1. Regulations on Customs Procedures for Export and Import Goods of Export Processing Enterprises
According to Clause 2, Article 74 of Circular No. 38/2015/TT-BTC, goods that are not construction materials, office supplies, foodstuffs, consumer goods, etc., do not require customs procedures when sold by export processing enterprises and their domestic partners, provided that all applicable taxes have been fully paid as if they were not enjoying the special regimes and policies applied to export processing enterprises. This excludes goods subject to export tax mentioned above.
Therefore, it is necessary to check and verify whether the goods purchased by export processing enterprises from the domestic market have fully paid all applicable taxes, similar to enterprises not benefiting from the special regimes and policies for export processing enterprises, to determine if the enterprise has violated customs regulations..
2. Determination of Commodity Codes
According to current regulations, goods must be assigned specific codes according to the Vietnam Export and Import Goods Classification Nomenclature. However, technical documents, detailed information on characteristics, composition, and other relevant details of the goods must be provided to the General Department of Customs to accurately determine the commodity codes according to the Vietnam Export and Import Goods Classification Nomenclature.
OFFICIAL LETTER NO. 3116/TCHQ-GSQL REGARDING CERTIFICATE OF ORIGIN ISSUES
On 28 June 2024, the General Department of Customs provided guidance on goods brought into production for export that are no longer in their original state; requests for exemption from administrative penalties and late tax payment penalties as follows:
1. Customs Procedures for Goods Changing Usage Purpose
At the time of registering the declaration for changing the usage purpose, if the goods do not remain in their original state as prescribed in Clause 1, Article 17 of Circular No. 38/2018/TT-BTC, the customs authority has no basis to accept certificate of origin form D and apply the special preferential tax rate.
Circular No. 33/2023/TT-BTC dated 31 May 2023, issued by the Ministry of Finance on determining the origin of export and import goods takes effect from 15 July 2023, and does not have a retroactive clause for declarations registered before 15 July 2023. Therefore, there is no legal basis for implementing the proposal in this case
2. Exemption from Administrative Penalties and Late Tax Payment Penalties
According to the provisions of Article 11 and Article 65 of the Law on Handling Administrative Violations, if the administrative violation is directly caused by objective conditions and circumstances due to an epidemic, and the violating organization or individual must prove that they have applied all necessary and possible measures but still could not prevent the violation, it may be considered a force majeure case.
Therefore, in cases where the company makes incorrect declarations leading to underpayment of taxes, there is insufficient basis to determine it falls under cases exempt from administrative penalties.
OFFICIAL LETTER NO. 3178/TCHQ-PC ON THE ISSUE OF REPETITIVE ADMINISTRATIVE VIOLATIONS
The General Department of Customs provides a response to the Can Tho City Customs Department regarding the issue of handling repetitive administrative violations as follows:
- Repetitive administrative violations are considered an aggravating circumstance according to Point b, Clause 1, Article 10 of the Law on Handling Administrative Violations.
- The penalty will be the average level of the penalty bracket, which can be reduced if there are mitigating circumstances but not below the minimum level, or increased if there are aggravating circumstances but not exceeding the maximum level (Clause 4, Article 23 of the Law on Handling Administrative Violations).
- Handling multiple violations: If an organization/individual commits multiple administrative violations that are detected at the same time and have not yet been handled, they will be penalized once and the aggravating circumstance will be applied to that violation (Article 2a of Decree No. 128/2020/ND-CP).
- Calculation of the penalty: The penalty will be the average level of the penalty bracket, which can be increased by 10% for each aggravating circumstance but not exceeding the maximum level of the penalty bracket (Point d, Clause 3, Article 5 of Decree No. 128/2020/ND-CP).
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