With the release of Decree 31/2012/ND-CP on 12 April 2012 by the Government, the “common minimum salary” will
increase from the current level of VND830,000 per month to the new level of VND1,050,000 per month, effective from
1 May 2012. As twenty times “common minimum salary” is stipulated as the cap for calculation of the social contribu-
tions, the cap will be increased from the current level of VND16,600,000 to the new level of VND21,000,000 from 1 May
of 2012. Please find herewith the current rates of social contributions for your reference. Please note that only health
insurance is currently applicable for expatriates.
New common minimum salary
Following the 2011 fiscal stimulus measures, on 21 June the National Assembly approved similar
measures for both corporations and individuals in 2012, including:
Corporate Income Tax (“CIT”)
A 30% reduction of 2012 CIT will be granted to:
Small and medium enterprises (“SMEs”), except for:
SMEs engaging in lotteries, property trading, securities business, finance, banking,
insurance or production/services subject to special sales tax; and
SMEs belonging to State Economic Groups and classified as 1st or special rank.
Labor intensive enterprises engaging inmanufacturing or processing of agricultural products, forestry
products, aquatic products, garments and textiles, footwear or electronic components; construction of
certain infrastructure.
Personal Income Tax (“PIT”)
Labor Code
Other passed laws
From 1 July 2012 to 31 December 2012, individuals having employment income and/or business income
subject to PIT at the lowest rate of 5% (i.e. assessable amount after tax relief does not exceed VND
5million per month) will be exempted from PIT.
On 18 June 2012, the new Labor Code (revised) was passed by the National Assembly of Vietnam. The most
notable changes include:
Labor outsourcing service is now officially recognized under the Labor Code.
Maternity leave is increased to six months from the current four months.
Public holidays for Lunar NewYear celebration is increased to five days from the current four days.
In addition to Vietnam public holidays, foreign national employees are entitled to take paid leave
on their traditional new year holiday (one day) and national day (one day).
The maximum term of a work permit is reduced from the current three years to two years.
The new Labor Code will come into effect as of 1 May 2013.
In addition, the National Assembly also passed the following laws:
Law on Anti-Money Laundering
Law on Tertiary Education
Law on Preventing of the Harmful Effects of Tobaco
Law on Deposit Insurance
(Source: PwC)
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