alert on compulsory insurance decree no. 58/2020/nd-cp · alert on compulsory insurance | page 1...

ALERT ON COMPULSORY INSURANCE |

From 15 July 2020, Decree No. 58/2020/ND-CP (“Decree 58”) dated 27 May 2020 stipulating the compulsory social insurance (“SI”) contribution rate for occupational accidents and diseases, and Decree No. 61/2020/ND-CP (“Decree 61”) dated 29 May 2020 amending and supplementing a number of articles of Decree No. 28/2015/ND-CP (“Decree 28”) dated 12 March 2015 detailing a number of articles of the Law on Employment regarding unemployment insurance (“UI”), will take effect.

The notable changes on compulsory insurance and related matters are summarized as below:

Decree 58:

• Reduces the contribution rate for occupational accidents and diseases from 0.5% to 0.3% on the basic salary applicable for SI contribution, provided that enterprises satisfy a number of conditions as prescribed in Article 5 of this Decree.

Decree 61:

• Supplements the category of employees defined as contributing UI;• Supplements the regulations on time of contributing UI but not yet entitled to unemployment allowance; • Supplements the documents that can be used for entitlement of unemployment allowance;• Amends the deadline for employee to receive decision of entitlement of unemployment allowance;• Lowers the conditions for employers to receive support for training, improving and enhancing occupational skills/qualifications to

maintain employment with employees.

Should you have any questions or concerns regarding the application of Decree 58 and Decree 61, please contact Tax Specialist of Deloitte Vietnam for assistance. Please find the details in the next slides.

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© 2020 Deloitte Vietnam Tax Advisory Company LimitedFor reference only, not for distribution or sale

Update the notable contents in Decree No. 58/2020/ND-CP on social insurance and Decree No. 61/2020/ND-CP on unemployment insurance

14 July 2020

ALERT ON COMPULSORY INSURANCE


The SI contribution rates of the employer are as follows:

(*) In order to enjoy the preferential rate, enterprises are required to self-assess the conditions (ref to Article 2), then prepare and submit the application dossier. The Ministry of Labour - Invalids and Social Affairs shall respond within 30 working days from the date of receiving full dossier.

Enterprises can apply the preferential rate for 36 months from the effective month of the approval. The extension of application can be extended within 60 days before the expiry date.

1. Contribution rate

Decree 58 on social insurance

1. Enterprises operating in industries with high risk of occupational diseases and accidents; (*)

2. Enterprises have not been imposed any administrative monetary fine or any criminal prosecution for violation against laws on occupational safety, hygiene and SI in the last 03 years;

3. Enterprises have submitted periodic reports on workplace accidents, occupational safety and hygiene accurately, sufficiently and timely manner within 03 consecutive years prior to the submission year; and

4. Enterprises must maintain the number of occupational accidents in the year prior to the submission year have been reduced by at least 15% of the average of the last 03 years, or having no occupational accident in the last 03 years prior to the submission year.

(*) List of businesses/industries considered as high risks of occupational accidents and diseases (According to Circular No. 07/2016/TT-BLDTBXH of the Ministry of Labour - Invalids and Social Affairs dated 16 May 2016):

2. Required conditions

According to the current regulations

According to Decree 58

Sickness,maternity fund

3% 3%

Occupationaldiseases and accident fund

0,5% 0,3% (*)

Retirementand death fund

14% 14%

Total 17,5% 17,3%

1. Coke and petroleum mining and refining;

2. Plastic/rubber based chemical production;

3. Production of metal and metal products;

4. Mining and quarrying of nonmetallic minerals;

5. Construction;

6. Ship building and repairing;7. Power generation, distribution

and transmission;8. Fishery and aquatic processing;9. Garment/apparels/shoes

manufacturing;10. Scrap recycling;11. Environment cleaning;

© 2020 Deloitte Vietnam Tax Advisory Company Limited


14 July 2020


For reference only, not for distribution or sale



Supplement the category of employees defined as contributing UI

• Employees who contribute UI in the month of labor contract termination and have been certified in SI book by the SI department;

• Employees who (i) take unpaid leave for at least 14 working days; (ii) take unpaid leave due to sickness, maternity for at least 14 working days; (iii) suspend labor contract for at least 14 days and have been certified by the SI department in all three cases either in the month of labor contract termination or the preceding month of labor contract termination.

Supplement the regulations on time of contributing UI but not yet entitled to unemployment allowance

• In case employees are entitled to the unemployment allowance and there is an additional time of UI contribution which is certified by SI after the termination of entitlement of unemployment allowance, then this period will be determined as the time of UI contribution but not yet entitled to unemployment allowance.

Supplement the documents that can be used for entitlement of unemployment allowance

• In addition to the expiry labor contract and the decision on termination of labor contract, the employee may provide confirmation of the employer detailing the type of the signed labor contract, the reason and the date of termination of the labor contract;

• In case the employee is a head of a company, the confirmation of the competent state agency about the company’s dissolution or bankruptcy can be submitted instead;

Decree 61 on unemployment insurance


14 July 2020


For reference only, not for distribution or sale

Supplement the documents that can be used for entitlement of unemployment allowance (cont.)

• In case the employee does not have confirmation on termination of the labor contract as the company has no legal representative, the provincial Department of Labor - Invalids and Social Affairs/Social Insurance shall send a written request to the Department of Planning and Investment for confirmation within 10 days.

Amend the deadline for employees to receive the decision on entitlement of unemployment allowance

• Employees are required to receive the decision on entitlement of unemployment allowance within 03 working days from the date on the result delivery slip. Otherwise he/she shall be considered as not wishing to receive unemployment allowance.

Lower the conditions for employers to receive support for training, improving and enhancing occupational skills/qualifications to maintain employment with employees

• Employers who cut-off from 30% or from 30 employees may be entitled to the supported fund. The old threshold is from 50 employees.

• The condition of the numbers of employees to be cut-off will be differ from each employer, specifically:

─ Employers having under 200 employees: Cut off from 30% or from 30 employees;

─ Employers having 200-1000 employees: Cut off from 30% or from 50 employees; and

─ Employers having more than 1000 employees: Cut off from 30% or from 100 employees.

BẢN TIN THUẾ & HẢI QUAN | Tháng 3 / 2020Contact us

Hanoi Office

15th Floor, Vinaconex Building, 34 Lang Ha Street, Dong Da District, Hanoi, Vietnam. Tel: +84 24 7105 0000Fax: +84 24 6288 5678

Ho Chi Minh City Office

18th Floor, Times Square Building, 57-69F Dong Khoi Street, District 1, Ho Chi Minh City, Vietnam.Tel: +84 28 7101 4555Fax: +84 28 3910 0750

Vo Hiep Van AnTax Partner+84 28 7101 [email protected]

Bui Ngoc TuanTax Partner+84 24 7105 [email protected]

Phan Vu HoangTax Partner+84 28 7101 [email protected]

Bui Tuan MinhTax Partner+84 24 7105 [email protected]

Dinh Mai HanhTax Partner+84 24 7105 [email protected]

Suresh G KumarTax Partner+84 28 7101 [email protected]

Vu Thu NgaTax Partner+84 24 7105 [email protected]

Thomas McClellandNational Tax Leader+84 28 7101 [email protected]

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