On 15 October 2018 the Government of Vietnam introduced Decree 143/2018/ND/CP (Decree 143) providing detailed guidance on SS contributions for expatriate employees working in Vietnam. This Decree takes effect on 1 December 2018.
The key changes implemented by Decree 143 include:
Scope of application
Mandatory SS contributions are required for the following expatriates:
Mandatory SS contributions are not required for the following expatriates:
Under Decree 143, the conditions, entitlement period and payment of the SS benefits that apply to expatriate employees are the same as for Vietnamese local employees.
The mandatory SS contributions for expatriates consist of:
The SS contribution rates are 8% for expatriates and 17.5% for the employer.
The procedures to apply for and claim SS are similar to the ones applied for Vietnamese employees.
Upon termination of the Vietnam labor contract or expiration of the work permit and when the expatriate no longer lives and works in Vietnam, the expatriate can claim a one-off payment for the contributed amounts. However, the rate of return is limited to two months’ salary for each year of contribution. The salary is based on the salary used for SS purposes (capped).
Impact on employment cost
Besides the mandatory SS contribution, the Company and expatriate employees are also required to participate in mandatory Health Insurance (4.5%) and Trade Union (2%) contributions which will significantly increase the employment cost.
Given there are no available SS totalization agreements between Vietnam and other countries, the expatriate employees and their employers may also have to contribute to a similar SS regime in their home country.
In preparation for the changes, employers should:
Should you reuire any further information, please contact your local EY advisor or one of the contacts below.
EYG no. 012291-18Gbl
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