Page 8 - VSIP News Q IV 2013

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Minimum salaries increased from January 2014
New Decree on financing ofTrade Unions issued
Amended Decree on Industrial Zones (IZ) and Export Processing Zones (EPZ)
Decree 182/2012/ND-CP ("Decree 182") was issued on 14 November to replace Decree 103/2012/ND-CP dated
4 December 2012 ("Decree 103"). Under Decree 182, minimum salaries will be increased as follows:
- Region I: VND 2,700,000 (increased from VND 2,350,000)
- Region II: VND 2,400,000 (increased from VND 2,100,000)
- Region III: VND 2,100,000 (increased from VND 1,800,000)
- Region IV: VND 1,900,000 (increased from VND 1,650,000)
The regions are defined in the Appendix to the decree. Except for moving Chau Doc town out of Region III, the regions
in Decree 182 are the same as those in Decree 103. Region I includes urban districts and certain suburban districts of Ho
Chi Minh City, Hanoi and Hai Phong as well as Bien Hoa, Thu Dau Mot and Vung Tau cities. Decree 182 repeats that the
salary paid to employees who have passed vocational training must be at least 7% higher than the minimum. These new
minimum salaries are applicable from 1 January 2014.
Decree 191/2013/ND-CP implementing the Trade Union Law in respect of the financing of trade unions ("Decree 191")
was issued on 21 November 2013, after much debate. Decree 191 provides that all enterprises must contribute trade
union fees, regardless of whether or not they have a trade union.
The amount of the fee is equal to 2% of the salaries used for calculating social insurance contributions for an
enterprise's Vietnamese employees. (The salary used for calculating social insurance contribution is currently capped at VND
23 million per employee per month). This is an employer's contribution only. The contributions by employees who are
trade union members are separately provided for in the Vietnam Trade Union Charter. Decree 191 will come into effect on
10 January 2014. These trade union fee contributionswill bemade on amonthly basis at the same time as the social insurance
contributions from 2014. However, the obligation to contribute these fees is back dated and effective retroactively from 1
January 2013, which is the effective date of the Trade Union Law. There are no details on when the backdated fees are due,
or how this will be collected. According to Article 27 of the Trade Union Law, the trade union fees will be used for organising
and maintaining trade union activities, e.g. disseminating State policies, developing memberships and paying trade union
officers. The fees can also be used to fund cultural, sporting and other activities for employees and help those in financial
difficulty. However, detailed guideline on how enterprises with no trade union can access these funds is not clear. Clearly
this Decree would have major implications for enterprises which do not currently have trade unions and more detailed
guidance in the form of a circular will be needed. We will keep you updated on further developments.
• An EPE is now permitted to sell goods and fixed assets to the domestic market. Such transaction is treated as
import / export. The Decree is silent on the limit of domestic sale. • An EPE is now permitted to purchase construction
materials locally for the construction of buildings. Where it does this the EPE and the supplier will be able to treat the
transaction as either import/export or domestic sale/purchase.
• If an EPE is granted a trading license, the EPE is required to set up a branch outside of the EPZ to carry out its trading
activities. Further guidance in this regard will be issued by the Ministry of Finance and the Ministry of Trade and Ministry of
Planning and Investment.
Decree 164 is effective from 1 January 2014.
TheVietnamgovernment recently issuedDecree 164 amendingDecree 29 on IZ and EPZ, with the following key changes:
Source: PwC Legal Vietnam NewsBrief