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The
Essential...
Workforce
in Vietnam
Common
employment hours
Monday-Friday,
8 hours per day, 40h per week, this may be extended or
reduced by mutual agreement: Overtime rate is 150% on
weekdays and 200% on week end and public holidays.
Trade
unions
All
companies must permit their staff to form trade unions.
Dispute between employers and employees should be resolved
trough negotiations. If a resolution is not reached then
the Ministry of Labour, War Invalids and Social Affairs or
Labour Tribunal may be asked to intervene to settle the
dispute.
Minimum
Wage
USD
45 per month for unskilled workers in Hanoi and Ho Chi
Minh City
USD
40 for smaller cities such as Hai Phong, Da Nang, Vung
Tau, Can Tho
USD
35 for other provinces and agricultural projects
Work
Permits
From
2 September 1997, every foreigner working in Vietnam must
issued a work permit according to the new legislation,
Decree No.58/CP in October 1996. This does not apply to
representative office staff and members of the Board of
Management of a foreign invested enterprise. Employers can
only employ a foreign employee for a maximum of three
years. A work permit may be extended only once.
Accounting
and Audit in Vietnam
Accounting
Requirements
A
firm may use only the accounting system and accounting
books approved by and registered with the Ministry of
finance (MoF). Accounting principles in Vietnam comply for
the most part to International Accounting Standards.
It
is obligatory for foreign-invested enterprises to use the
Vietnamese Accounting System (VAS) unless the approval of
the MoF is obtained for the adoption of a foreign accounting
system. As a result, foreign investors now have
to either convert their system to the VAS or use two
systems at the same time.
Main
requirements of VAS are:
-
Companies have to maintain charts of accounts, accounting
vouchers and ledgers, financial reports and filing systems
following prescribed requirement
-
The account are normally maintained in Vietnam Dong.
However, foreign invested entities can maintain their
account and issue their financial statements in a foreign
currency with the prior registration with, approval by,
the MoF.
-
The financial year of foreign-invested entities must be
the same as the tax year
-
The financial year-end may be the end of the solar
calendar year (December 31) or another date that is
approved by the MoF. The first fiscal year begins on the
date of issue of the Investment Certificate.
-
Foreign-invested entities can maintain their accounting
system internally or by using the services of an
independent accounting firm.
Audit
Requirements
All
foreign-invested entities in Vietnam are required to have
their financial statements audited by a qualified firm of
auditor. Audit firm are licensed and their activities
regulated by the MoF. Audit firms currently active in
Vietnam comprise both international and local firm.
Land
Law
in Vietnam
Land
according to Socialist doctrine, belongs to the people but
is administered by the State. As such, an individual
cannot own land. The Land Law of 1987 acknowledges the
rights of land users, including the ability to assign and
transfer property. The State may grant land use rights for
business or residential purposes. Foreign investors must
be aware that land use rights, granted to foreign invested
projects are different from those granted to a local
Vietnamese.
The
Land Law was further amended in 1993, to include:
-
Compensation for expropriation
-
Ability to inherit land
-
Long term use of land
-
The right to mortgage land to Vietnamese banks and
individuals.
Corporate
Income Tax
in Vietnam
Tax
year
The
Standard year for financial reporting and tax purposes is
from the 1st of January to the 31st of December.
Financial
Reporting
The
submission of financial statements and the statutory
report thereon to various Ministries and Departments of
the Government is required within three months of the end
of the final year-end.
Payment
Provisional
quarterly payments are made not later than the last day of
each quarter.
Corporate
Income Tax (CIT)
All
entities shall pay CIT at the standard rate of 28% on
taxable income.
Employer
Taxes
Employers
are required to contribute an amount equal to 17% of
salaries and wages in respect of government Health
Insurance and Social Insurance Plans.
Employees
contributes 6% of their salaries and wages to the plans by
way of payroll deduction.
Value
Added Tax
0%
for exported products and services and transport services
which the Government wishes to encourage;
5%
for essential goods and services for agricultural and
forestry industries, medicine, teaching aids, paper,
foodstuffs
10%
for goods and services serving for mineral products, power
generation, natural oils, electrical products, processed
food, assembly, leasing, chemicals, construction,
transport, law consultancy.
20%
for goods and services serving for gold, broker, shipping
agency, lottery.
Relief
for losses
Entities
recording tax losses can carry them forward for up to 5
years for offset against taxable income.
Tax
incentive
Preferential
tax rates are applicable to investment projects meeting a
variety of specific criteria. The criteria relate to the
geographic location (difficult conditions), in Industrial
Zones, Export Processing Zones, High Technology Zones, and
investment that have a significant socio-economic impact.
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