22 January, 2019
Last year the government issued a decree requiring foreigners working in Vietnam to pay social security taxes and become a part of the social security scheme currently in effect in Vietnam.
This new requirement only applies to foreigners who work for firms in Vietnam on contracts of a year or more. So one way to get around the requirement is to make sure that you have a contract for 364 days instead of a year. Not that this is advisable, but there will undoubtedly be some who seek this answer. There are benefits that arise from working on a year or indefinite contract that are worth the extra amount.
Eight percent. Monthly.
That’s the contribution required by foreigners working in Vietnam. There are also additional benefits which must be paid by the employer, but for those, contact your favorite Indochine Counsel attorney.
This new tax regime went into effect at the end of 2018 and should be completely applied for foreign workers in Vietnam this year. If you didn’t know this yet, then you don’t pay much attention to your monthly statement. If you did know this, and it came as a surprise, talk to your human resources people about their lack of communication to foreign employees.
Otherwise, hope that Vietnam quickly passes a double taxation treaty with your home country so as to allow this new social security tax, which is admittedly a major increase in taxes, to be passed through one country or the other.
For further information, please contact:
Dang The Duc, Partner, Indochine Counsel
duc.dang@indochinecounsel.com
