Vietnam

Individual - Significant developments

Last reviewed - 31 January 2020

Severance/retrenchment allowance calculation

Effective from 15 December 2018, probation/apprenticeship period no longer considered as service period for calculating of severance/retrenchment allowance payment.  On the other hand, effective from 15 December 2018, leave period for treatment and recovery after labour accident/occupational diseases or paid leave for implementing citizen’s obligations are now considered as service period for calculating of severance/retrenchment allowance.

Social security

Effective from 1 December 2018, social insurance (SI contributions are applicable to foreign individuals that are employed under Vietnam labour contracts with an indefinite term or a definite term of 1 year or more. Foreign employees internally transferred within a group and those who have reached the statutory retirement age (60 years for males, 55 years for females) are not subject to compulsory SI contributions. See details comments below.

New tax administration law

  • Greater power to tax authorities to collect tax, particularly in instances where companies attempt to evade tax 
  • Deadline for individuals to file annual personal income tax (PIT) return is extended by one month to 30 April of the following year
  • Taxpayers are entitled to interest on tax refunded amount as a result of appeal/ litigation
  • Legal representative of a company can be prohibited from leaving Vietnam if his/her employer has a tax debt due to the tax authorities 

The new tax administrative law was effective from 1 July 2020.

Changes in personal and dependant relief

Based on the Resolution 954/2020/UBTVQH14 issued on 2 June 2020, the personal and dependant relief is updated as below:

  • Personal relief is increased from VND9mil/month to VND11mil/month.
  • Dependant relief is increased from VND 3.6mil/month to VND4.4mil/month.

Although Resolution 954 is effective from 1 July 2020, the increase is effective from 1 January 2020.