Government Relief To Assist With Covid-19 Pandemic and Lockdown

Vietnam’s government has come up with incentives and relief measures to assist employers and employees through the pandemic and the lockdown.

The covid-19 pandemic has wreaked havoc across the globe and has left economies in shambles. While nations across the globe grapple with the aftermath of the pandemic, Vietnam’s government has come up with incentives and relief measures to assist employers and employees through the pandemic and the lockdown. Many of these measures are applicable for foreign firms as well as local ones.

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This article summarizes the information related to these measures by the Vietnamese government. 

Incentives and Measures for Employers

Loan Policy For Employers To Pay Furlough Wages, Wages For Production Recovery 

An employer is entitled to borrow a loan to pay furlough wages

The employer is entitled to borrow a loan from the Bank for Social Policies at the interest rate of 0% and is not required to furnish loan security to pay furlough wages to the employees who have contributed to compulsory social insurance and have been put on furlough for 15 consecutive days or more from May 1, 2021, to the end of March 31, 2022.

The employer must have no bad debt at any credit institution and foreign bank branch at the time of applying for a loan. The maximum loan amount is equal to the regional minimum wage for the number of employees according to the actual payment period of furlough wages but not exceeding 03 months. The loan term is less than 12 months.

  • The deadline for receiving loan applications is no later than March 25, 2022.

An employer is entitled to borrow a loan to pay wages for production recovery

The employer is entitled to borrow a loan from the Bank for Social Policies at the interest rate of 0% and is not required to furnish loan security to pay wages to the employees who have worked under employment contracts and have contributed to compulsory social insurance if it resumes the business after suspending operations at the request of the competent authority to prevent and control the COVID-19 pandemic, from May 1, 2021, to the end of March 31, 2022, and its line of business is in the field of transportation, aviation, tourism, accommodation services, sending Vietnamese workers to work abroad under a contract from May 1, 2021, to the end of March 31, 2021.

The employer must have no bad debt at any credit institution and foreign bank branch at the time of applying for a loan. The maximum loan amount is equal to the regional minimum wage for the number of employees under employment contracts according to the actual payment period of wages but not exceeding 03 months. The loan term is less than 12 months.

Postpone the time of payment of trade union dues to December 31, 2021.

Approval for production and business enterprises affected by the Covid-19 epidemic (enterprises with the number of employees participating in social insurance must temporarily resign from 50% of the total number of employees subject to compulsory social insurance or more) may postpone the time of payment of trade union dues to December 31, 2021.

RELATED: BPO Services, Reduce Your Overhead Costs During Lockdown with Secretarial Outsourcing 

Support for employers to provide training, retraining, and skill enhancement for employers, for job retention

Employers include state agencies, public non-business units, people’s armed forces units; enterprises, cooperatives, households, business households, cooperative groups, other organizations and individuals that hire or use labor under a working contract or a labor contract. 

It has fully paid unemployment insurance premiums for employees for a full 12 months or more at the time of requesting support. It has to change the technological structure as prescribed in Clause 1, Article 42 of the Labor Code. Its revenue in the preceding quarter has decreased by 10% or more compared to the same period in 2019 or 2020 at the time of requesting support. The maximum monthly support of training, retraining and skill enhancement is VND 1,500,000 per employee.

Assistance to furloughed employees

Employees will be entitled to lump-sum support of VND 1,000,000 per person if they have worked under an employment contract and has been put on furlough under Clause 3, Article 99 of the Labor Code and have been quarantined or in a locked-down area as required by the competent authority for 14 days or more during the period from May 1, 2021, to the end of December 31, 2021; and they have contributed to compulsory social insurance up to the time of furlough.

Insurance: Suspension of contributions to the retirement and survivorship fund

Regarding employers who have fully paid social insurance premiums or are temporarily suspending contributions to the retirement and survivorship fund until the end of April 2021 but have been affected by the COVID-19 pandemic, resulting in a downsizing of at least 15% of employees who have contributed to social insurance compared to April 2021 (including the employees on furlough,  suspension of employment contracts, and unpaid leave), the employees and the employers are entitled to a 6-month suspension of payment to the retirement and survivorship fund from the date of application submission.

As for a case on the payment suspension under Resolution No. 42/NQ-CP of April 9, 2020, and Resolution No. 154/NQ-CP of October 19, 2020, of the Government, if the applicant is still qualified, the application will be approved as long as the suspension period does not exceed 12 months.

Reduction in insurance premiums for occupational accidents and diseases

Employers are entitled to a premium rate of 0% of the salary fund as the basis for paying social insurance premiums to the Insurance Fund for Occupational Accidents and Diseases for 12 months (from July 1, 2021, to June 30, 2022) for employees eligible for occupational accident and disease insurance (except for officials, public employees, people in the people’s armed forces, employees in the agencies of the Party, the State, administrative agencies, public sector entities on the payroll of the state budget). 

The employer will provide the monetary support obtained from the reduction in premiums to the Insurance fund for occupational accidents and diseases for the employees in order to combat the COVID-19 pandemic.

Incentives regarding Corporate Income Tax (CIT)

Deferral of value-added tax, corporate income tax, personal income tax, and land rents in 2021 for all companies: 

VAT incurred during the period from March to June of 2021, the first quarter and second quarter of 2021 will be deferred for 05 months; VAT incurred during July of 2021 will be deferred for 04 months; VAT incurred during August of 2021 will be deferred for 03 months. The deferral period begins from the deadline for VAT payment prescribed by tax administration laws.

CIT will be deferred for 03 months from the deadline for CIT payment prescribed by tax administration laws.

Donations for COVID-19 are deductible for CIT calculation

Organizations and enterprises are included in deductible expenses when determining their CITable income for grants, support, and voluntary contributions to the Fund according to the provisions of Decree 44/2021/ND-CP implementation guidance on deductible expenses when determining CIT-able income for support and sponsorship expenses of enterprises and organizations for Covid-19 epidemic prevention and control activities and amendment documents, additional (if any).

Incentives and Measures for Employees

Assistance To Employees on Suspension of Employment Contracts, Unpaid Leave 

Employees will be entitled to lump-sum support if they have worked for enterprises that temporarily cease operations at the request of competent authorities for the prevention and control of the COVID-19 pandemic and their period of suspension of employment contracts or unpaid leave is 15 consecutive days or more from May 1, 2021, to the end of December 31, 2021, with a start date between May 1, 2021, and December 31, 2021; and they have contributed to compulsory social insurance up to the time of suspension of employment contracts or unpaid leave as follows:  The rate is VND 1,855,000 per person for 15 consecutive days or more but less than 1 month, and VND 3,710,000 per person for 1 month or more.

Assistance to employees with terminated employment contracts 

Employees will be entitled to lump-sum support of VND 3,710,000 per person if they have worked for enterprises that temporarily cease operations at the request of competent authorities for the prevention and control of the COVID-19 pandemic and their employment contracts have been terminated from May 1, 2021, to the end of December 31, 2021, with a start date between May 1, 2021, and December 31, 2021; and they have contributed to compulsory social insurance but are not eligible for unemployment benefits.

Electricity Price Reduction

Plan to support electricity price reduction and electricity bill reduction (phase 3) for electricity users.

  1. Reduce the electricity selling price from the retail price of electricity applied for business to the retail price of electricity applied to regulated manufacturing industries
  2. Reduce electricity bills (before tax) directly for establishments serving COVID-19 prevention and control without charge, buying electricity from the Electricity Corporation/Electricity Company under the Vietnam Electricity Group and electricity retailers. The electricity bill reduction is as follows:
  3. Reduce 100% of electricity bills for facilities that are currently serving as places of isolation and concentrated medical examination of patients suspected of being infected with COVID-19.
  4. 20% discount on electricity bills for medical facilities being used to examine, test, and treat patients suspected of being infected with COVID-19.

Incentives for Special Business Sector

Fee For Inspection Of Fire Safety Equipment

50% of the fee rate specified in the schedule of fire safety and firefighting equipment issued together with Circular No. 02/2021/TT-BTC dated January 8, 2021, of the Minister of Finance on the collection, payment, management, and use of fee for appraisal and approval of fire safety designs.

Relief in Government Fees

Relief in Charge For Issuance of Protection Certificates, Certificates of Registration of Industrial Property Rights Transfer Contracts

50% reduction of the charge rate specified in Section I of schedule of fee and charge rates in the field of cultivation and forest plant varieties issued together with Circular No. 207/2016/TT-BTC dated November 9, 2016, of the Minister of Finance on rates, collection, payment, management and use of fees and charges in the field of cultivation and forest plant varieties.

Relief in Charge For Filing Applications For Registration of IP Rights Protection

50% reduction of the fee rates specified at Point 2, Section III of schedule of fee and charge rates in the field of cultivation and forest plant varieties promulgated together with Circular No. 207/2016/TT-BTC.

Relief in Fee For Assessment of Business Conditions in the Inspection of Occupational Safety; Training of Occupational Safety and Sanitation

70% reduction of the fee rates specified in Article 1 of the Circular No. 110/2017/TT-BTC dated October 20, 2017, of the Minister of Finance on amendments to the schedule of fees for assessment of business conditions in an inspection of occupational safety, training of occupational safety and sanitation issued together with Circular No. 245/2016/TT-BTC dated November 11, 2016, of the Minister of Finance on rates, collection, payment, management and use of fee for assessment of business conditions in the inspection of occupational safety; training of occupational safety and sanitation.

Relief in Customs fees

90% reduction of the fee and charge rates specified in Clause 2, Article 4 of Circular No. 194/2016/TT-BTC.

Relief in Fee For Registration (Confirmation) To Use Foreign Barcode Codes

50% reduction of the fee rates specified in Clause 2, Article 4 of Circular No. 232/2016/TT-BTC dated November 11, 2016, of the Minister of Finance on rates, collection, payment, management, and use of fee for issuance of barcodes.

Relief in Fee for appraisal of construction investment projects

50% reduction of the fee rates specified in Section 1 of Schedule of fee rates for appraisal of construction investment projects, appraisal of basic design drawings issued together with Circular No. 209/2016/TT-BTC dated November 10, 2016, of the Minister of Finance on rates, collection, payment, payment, management and use of fee for appraisal of construction investment projects, fee for appraisal of basic design drawings.

Relief in Fee for appraisal of basic design drawings

50% reduction of the fee rates specified in Section 1 of Schedule of fee rates for appraisal of construction investment projects, appraisal of basic design drawings issued together with Circular No. 209/2016/TT-BTC.

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