THE MINISTRIES
INTER-MINISTERIAL
THE MINISTRY OF FINANCE- THE MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS
JOINT CIRCULAR No.16/2000/TTLT-BTC-BLDTBXH OF FEBRUARY 28, 2000 GUIDING THE IMPLEMENTATION OF FINANCIAL REGIMES FOR VIETNAMESE LABORERS AND SPECIALISTS SENT ABROAD TO WORK FOR A DEFINITE TIME UNDER THE GOVERNMENT’S DECREE No.152/1999/ND-CP OF SEPTEMBER 20, 1999
In furtherance of the Government’s Decree No.152/1999/ND-CP of September 20, 1999 on sending Vietnamese laborers and specialists (hereinafter referred to as laborers) abroad to work for a definite time, the Finance Ministry and the Ministry of Labor, War Invalids and Social Affairs hereby jointly guide the implementation of a number of financial regimes as follows:
A. GENERAL PROVISIONS
1. Subject to this Circular are labor-supplying enterprises and laborers who are sent abroad to work for a definite time in the forms stipulated in Articles 2 and 3 of the Government’s Decree No.152/1999/ND-CP of September 20, 1999.
1.1. For laborers:
a/ Laborers shall have to pay personal income tax as well as social insurance premiums, and enjoy the social insurance regime under the current regulations of the State.
b/ Laborers who are sent abroad to work for a definite time through labor-supplying enterprises shall have to pay deposit money and service charges to the sending enterprises.
c/ Laborers who go abroad to work for a definite time under individual contracts they have signed directly with foreign labor-hirers, when registering the contracts at the provincial/municipal Labor, War Invalids and Social Affairs Services, shall have to pay a sum of administrative expense for labor registration, supervision and management, which shall be 100,000 VND (one hundred thousand dong) at most.
1.2. For enterprises:
a/ Enterprises that fully meet conditions stipulated in Clause 1, Article 5 of Decree No.152/1999/ND-CP, when being granted licenses for sending laborers abroad to work for a definite time, shall have to pay the licensing fee.
b/ Enterprises shall have to pay management charges to contribute to enhancing the overseas labor management work.
c/ Enterprises sending laborers abroad to work for a definite time in form of labor-supply contracts shall be entitled to collect deposit money and service charges from laborers.
2. The financial regimes stipulated in this Circular shall also apply to subjects defined in Article 26 of Decree No.152/1999/ND-CP.
3. The Overseas Labor Management Department of the Ministry of Labor, War Invalids and Social Affairs shall exercise the unified management of the sending of Vietnamese laborers abroad to work for a definite time; collect, manage and use the licensing fee, management charges and fines of enterprises for the right purposes.
4. The collections on the sending of Vietnamese laborers abroad to work for a definite time shall comply with the provisions of this Circular.
5. Laborers and enterprises that commit financial violations shall be handled according to the provisions of this Circular.
B. SPECIFIC PROVISIONS
I. FOR LABORERS
1. Deposit money
Laborers, before going abroad to work for a definite time through labor-supplying enterprises, shall have to deposit a sum of money to such enterprises in order to ensure their performance of the already concluded contracts.
The deposit amounts shall be agreed upon by enterprises and laborers in contracts but shall not exceed the levels stipulated in Appendix 01/LT to this Circular.
Laborers shall pay deposits to enterprises within 15 days before their departure for overseas labor.
After fulfilling the contracts and returning home, if not breaching the contracts and causing damage to the employers and the sending enterprises, laborers shall be entitled to receive back the entire deposit amounts and interests thereon according to the stipulations of the State Treasuries. If laborers breach the contracts, thus causing damage to the employers and the sending enterprises, their deposit money shall be recouped according to the provisions of Clause 6, Section I, Part B of this Circular.
2. Service charges
Laborers who are sent to work overseas shall have to pay service charges to the sending enterprises according to the following stipulations:
a/ Where the contractual wages paid by employers to the laborers do not cover the meals, accommodation, labor accident insurance and medical insurance for the time the laborers work overseas, the payable service charges shall not exceed 12% of their monthly wages according to the contracts. Particularly for officers and crew members working on board sea-shipping vessels, the service charge levels shall not exceed 18% of the above-said wages.
b/ Where the contractual wages cover the meals, accommodation, labor accident insurance and medical insurance, which cannot be separated, the laborers shall have to pay service charges not exceeding 8% of their monthly wages according to the contracts. For officers and crew members working on board sea-shipping vessels, the payable service charge levels shall not exceed 12% of the said wages.
c/ Where the laborers are entitled to extend labor contracts with their employers and enjoy new wages or during their working term the contractual wage levels are adjusted, the service charge levels shall also be recalculated according to the new wage levels as from the date of adjustment, and the payment duration shall also cover the whole contract-extension period.
d/ Service charge payment procedures: On the basis of the contracts concluded between the laborers and the enterprises, the laborers shall pay service charges according to the provisions of Point 3.1, Clause 3, Section II, Part B of this Circular.
3. Social insurance
Laborers shall pay social insurance premiums and enjoy the social insurance regime according to the State’s current regulations.
4. Personal income tax
Laborers with high incomes shall have to pay personal income tax according to the State’s current regulations.
Where laborers work in the countries that have signed agreements on avoidance of double taxation with Vietnam, they shall only have to fulfil the income tax obligations according to the provisions of such agreements.
5. Other expenses
Laborers shall have to bear the following expenses:
a/ Airfares from Vietnam to the countries of their workplaces (except for cases of financial support by employers).
b/ The health examination expense, at the levels set by the Ministry of Health.
c/ The expense for dossiers and procedures for working overseas according to the State’s current regulations.
After being selected for working overseas, if laborers do not have the demand therefor, they shall have to bear all expenses already paid by enterprises for their foreign language and professional examinations for them as required by the contracts with foreign partners as well as for vocational training for laborers before they are sent to work abroad.
6. Handling of violations
In the course of working overseas for a definite time, if breaching contracts, laborers shall be dealt with as follows:
- To pay material compensation for damage caused to the employers according to laws of the host countries, and to the sending enterprises.
- To pay all service charges, social insurance premiums and personal income tax (if any) on the basis of the contractual wage levels, and the payment duration shall be counted till the date the laborers return home.
Where laborers have to terminate their contracts ahead of time and return home due to objective causes (wars, natural calamities, enterprise bankruptcy, poor health conditions...), they shall not have to fulfil their financial obligations as from the date of termination of the contracts.
II. FOR ENTERPRISES
1. Licensing fee for specialized business operations
The licensing fee for specialized business operations on sending Vietnamese laborers abroad to work for a definite time is 10,000,000 VND/license (ten million dong).
Enterprises shall be entitled to account the licensing fee amount into the expenses for activities of sending laborers to work abroad.
2. Collection, management and payment of deposit money
Enterprises sending Vietnamese laborers abroad to work for a definite time shall be allowed to collect the laborers’ deposit money to ensure the latter’s performance of the concluded contracts.
The deposit collection must be clearly stated in the contracts signed by laborers with the sending enterprises and effected within 15 days before the laborers’ departure for working overseas labor.
a/ Deposit levels and modes:
On the basis of the concrete conditions of each market, each contract and each specific labor subject, enterprises shall reach agreement with laborers on the deposit levels, the lump-sum collection before the latter’s departure or the gradual deduction from the laborers’ monthly wages, provided that the total deposit amounts shall not exceed the levels prescribed in Appendix 01/LT enclosed herewith.
b/ Deposit currency:
The deposit currency shall be US dollar. Where the deposits are collected in Vietnam dong, the payable amounts in USD shall be converted into the VN dong amounts according to the average exchange rate on the inter-bank market announced by the State Bank of Vietnam at the time of collection.
c/ Management of deposit money:
Within 15 days after receiving the laborers’ deposits, the enterprises shall have to remit the entire collected amounts into their accounts opened at the State Treasuries of the localities where they are headquartered. The deposit terms shall be determined according to the terms of the concluded contracts on working overseas for a definite time.
The withdrawal of money from these accounts shall be effected only when the concerned enterprises produce minutes on contract liquidation with laborers to the State Treasuries where they have opened their accounts. Where laborers fail to come for the contract liquidation, the State Treasuries shall allow the withdrawal of their deposits only when there is the written consent of the Overseas Labor Management Department of the Ministry of Labor, War Invalids and Social Affairs.
d/ Settlement of deposit money:
After the laborers return to the country, the concerned enterprises shall have to send them notices requesting them come for liquidation of the concluded contracts. The settlement of deposit money shall be carried out simultaneously with the liquidation of the contracts signed between the sending enterprises and the laborers.
The laborers may authorize their next of kin (with certification of the commune/ward People’s Committees) to come to enterprises for the liquidation of the already concluded contracts.
+ Where the laborers do not cause economic damages to enterprises, the latter shall have to refund them the entire deposit amounts as well as the interests thereon according to the stipulations of the State Treasuries where enterprises have opened their accounts.
+ Where the laborers breach contracts, thus causing economic damage to enterprises, the enterprises shall have the right to recoup their deposit amounts and interests thereon according to Clause 6, Section I, Part B of this Circular.
Enterprises shall have to refund laborers the amounts of deposit (if any), left after recouping.
- Where laborers arbitrarily terminate contracts ahead of time and do business illegally or 3 months after enterprises send them notices the laborers still fail to come for contract liquidation, the enterprises shall have the right to deduct their deposit amounts and interests thereon according to the stipulations of Clause 6, Section I, Part B of this Circular and report such to the Overseas Labor Management Department of the Ministry of Labor, War Invalids and Social Affairs.
Enterprises shall have to oversee the remaining deposit amounts (if any) at the State Treasuries.
- If the deposit amounts are not enough to pay for the damage caused by laborers, enterprises shall have the right to ask the latter to make extra payment.
3. Service charges
3.1. Service charges mean enterprises’ turnover from the sending of Vietnamese laborers abroad to work for a definite time.
- Enterprises shall collect service charges from laborers according to Clause 2, Section I, Part B of this Circular.
Laborers are paid in which currency (local currency or USD) the service charges shall be calculated in that currency according to the wage percentages, or calculated on the USD amounts converted equivalently from the paid currency according to the exchange rate at the time of calculation (corresponding to the time of wage payment to laborers).
- Where the foreign employers pay wages directly to laborers, enterprises may reach agreement with the laborers to collect service charges: lump-sum collection in advance or collection by installments in the course of performance of the contracts.
If enterprises collect service charges from laborers in advance, the collection must be effected in Vietnam dong according to the average exchange rate on the inter-bank market announced by the State Bank of Vietnam at each time of money collection.
3.2. Use of service charges: Enterprises shall use service charges to cover expenses for their labor export activities according to the current financial management regime, including the foreign language knowledge and professional skill examinations for laborers as required by the contracts with foreign partners as well as the vocational training for laborers before they are sent to work overseas.
4. Management charges
a/ Management charge levels:
Enterprises sending Vietnamese laborers to work overseas shall have to pay management charges, which represent 1% of the collected service charges, to the Overseas Labor Management Department of the Ministry of Labor, War Invalids and Social Affairs.
Where enterprises send laborers abroad to work in form of construction contracting or subcontracting, overseas product-sharing joint-venture or overseas investment, the management charge level shall represent 0.5% of the total wage fund to be paid to laborers.
Enterprises may account the management charges into the expenses for activities of sending laborers abroad to work for a definite time.
b/ Mode of payment:
Enterprises shall temporarily pay the management charges to the Overseas Labor Management Department of the Ministry of Labor, War Invalids and Social Affairs when registering contracts on sending Vietnamese laborers abroad to work for a definite time. The sum of money to be temporarily paid shall be determined on the basis of registration of the number of laborers, wage levels and working time of laborers under contracts and shall be settled annually.
5. Reporting regime
a/ Periodically and annually, their enterprises shall have to make and send to the Overseas Labor Management Department of the Ministry of Labor, War Invalids and Social Affairs the following reports:
+ The report on the collections and remittances in the first 6 months of the year as well as the whole year, respectively on July 15 of the current year and January 30 of the subsequent year at the latest.
+ The sum-up report on the financial situation of labor exporting activities, on January 30 of the subsequent year at the latest.
+ The report on the plan of the subsequent year on the basis of the performance situation in the first 9 months of the current year, on October 20 of the current year at the latest.
b/ To make extraordinary reports at the request of the Overseas Labor Management Department of the Ministry of Labor, War Invalids and Social Affairs or competent agencies.
6. Handling of violations
Enterprises shall have to pay compensation for damage caused to laborers due to their or the foreign partners’ breaches of the contracts according to Vietnamese laws and laws of the host countries, and at the same time be handled as follows:
a/ A fine of between 200,000 VND and 1,000,000 VND for one of the following cases:
- Collecting deposit money in excess of the prescribed levels, improperly collecting service charges improperly, making the collection not according to the prescribed time for collection.
- Late remittance of the collected deposit amounts into the State Treasuries as prescribed.
- Late submission of the reports according to the prescribed time-limits.
b/ A fine of between 1,000,000 VND and 3,000,000 VND and possible suspension of the sending of Vietnamese laborers abroad to work for a definite time or withdrawal of operation licenses, for one of the following cases:
- Repeating the violations mentioned at Point (a) above.
- Collecting the laborers’ deposits when there are not yet or no contracts with foreign partners.
- Arbitrarily setting fees and/or charges in contravention of law.
- The laborers complain or take action against enterprises for their failure to strictly comply with the State’s current regimes and policies as well as the agreed terms when liquidating the labor contracts.
c/ Where serious consequences are caused, the violators shall be administratively disciplined or have their cases transferred to the competent bodies for penal liability examination.
7. 6 months after the laborers are selected to be sent to work overseas, if enterprises fail to send them abroad, they must notify the laborers of the reasons therefor. In that case, if the laborers have no more demand to work overseas or the enterprises cannot send them to work overseas, the enterprises shall have to refund the laborers all advance collections, including the airfares, deposits, service charges, social insurance premiums and overseas management charges (if any).
III. REGIME OF MANAGEMENT OF LICENSING FEE, MANAGEMENT CHARGES AND FINES
1. The Overseas Labor Management Department of the Ministry of Labor, War Invalids and Social Affairs shall be entitled to collect licensing fee, management charges and fines paid by enterprises according to the provisions of this Circular. All these collections shall be managed and used according to specific regulations of the Finance Ministry.
2. The administrative expenses paid by laborers who are sent abroad to work for a definite time under individual contracts must be included in the general balance of the annual financial plan of the provincial/municipal Labor, War Invalids and Social Affairs Service.
C. ORGANIZATION OF IMPLEMENTATION
1. This Circular takes effect as from December 1