The Resolution No. 68/NQ-CP issued by the Government which comes into effect since 1st July 2021 has cut down on the contribution rate of the employer’s labour accident and occupational disease (“LA & OD”) insurance contribution from 0,5% to 0% for the period of twelve (12) months since 1st July 2021 up to 30th June 2022.

In accordance with the Resolution, the employers will provide the monetary support saved from the above insurance reduction to the employees during the fight against the Covid-19 pandemic. The employers could follow the internal policy on treatment to those obtained from such reduction by:

  • Using for Covid-19 testing fee or expense for purchasing Covid-19 testing kits or equipment to protect their employees from the potential infection of Covid-19 during their working time; or
  • Settling such amount along with salary and paying directly to employees on monthly basis.

In case that the 0.5% reduction is paid in full to the employees for the fight against Covid-19 pandemic, such amount is treated as non-taxable income of the employees. This is the response by the General Tax Department to the Hanoi Tax Department as of the Official Letter No. 4102/TCT-DNNCN on 25th October 2021 as a guidance on determination of assessable income with regard to Personal Income Tax Treatment.

As a reliable partner on tax and social insurance compliance, we would be very delighted to assist you in your human resources management matter.

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