Shall an employee with a contract of less than 6 months be subject to enforcement by deduction of money from the taxpayer’ salary or income in Vietnam?
Shall an employee with a contract of less than 6 months be subject to enforcement by deduction of money from the taxpayer’ salary or income in Vietnam?
Based on Clause 1, Article 130 of the 2019 Law on Tax Administration, it is stipulated as follows:
Enforcement by deducting money from the taxpayer’s salary or income
1. Wage or income deduction measures are applied to taxpayers subject to enforcement of tax enforcement decisions who are working under permanent payrolls or contracts for 06 months or more, or who are receiving retirement or disability benefits.
2. The deduction rate for wages, retirement, or disability benefits for an individual is not less than 10% and not more than 30% of the individual's total monthly wages or benefits; for other income, the deduction rate is based on actual income but not more than 50% of the total income.
3. The agency, organization employing the laborer managing the wages or income of the individual subject to the enforcement of tax enforcement decisions has the following responsibilities:
a) Deduct a portion of the wages or income of the individual to enforce the administrative decision on tax management and transfer the deducted amount into the state budget account at the State Treasury as specified in the decision of enforcement of the administrative decision on tax management from the nearest payment period for wages or income until the full amount of tax debt is deducted according to the enforcement decision on the administrative decision on tax management, and simultaneously notify the decision issuer and the individual concerned;
b) In the case where the tax debt has not been fully deducted according to the enforcement decision and the labor contract of the individual subject to enforcement is terminated, the employing agency or organization must notify the issuer of the enforcement decision on the administrative decision on tax management within 05 working days from the date the labor contract is terminated;
c) The agency or organization employing the laborer managing the wages or income of the individual subject to enforcement of tax enforcement decisions intentionally does not implement the enforcement decision on the administrative decision on tax management shall be fined according to the administrative violations stipulated in Chapter XV of this Law.
4. The Government of Vietnam provides detailed regulation on this Article.
Thus, under the above regulation, an employee with a contract of less than 6 months will not be subject to enforcement by deduction of money from the taxpayer’ salary or income.
Shall an employee with a contract of less than 6 months be subject to enforcement by deduction of money from the taxpayer’ salary or income in Vietnam? (Image from the Internet)
Vietnam: What do tax enforcement decisions include?
Based on Clause 1, Article 32 of Decree 126/2020/ND-CP guidance, tax enforcement decisions include:
Enforcement by deducting money from the taxpayer’s salary or income
1. Applicable Objects
a) Wage or income deduction measures are applied to taxpayers who are individuals subject to enforcement of tax enforcement decisions who receive wages, salaries, or income at an agency, organization under permanent payroll or labor contracts with a duration of 06 months or more, or receive retirement or disability benefits.
b) tax enforcement decisions include: decisions on administrative penalties related to tax management; notices of tax determination, tax determination decisions; notices of tax arrears; decisions on recovery of refunds; extension decisions; installment payment decisions; decisions to terminate the validity of the decision on tax debt reservation; decisions on the application of remedial measures according to the law on handling administrative violations related to tax management; decisions on compensation for damages; other tax enforcement decisions according to the law.
Thus, decisions on administrative penalties related to tax management;
Notices of tax determination, tax determination decisions;
Notices of tax arrears;
Decisions on recovery of refunds;
Extension decisions;
Installment payment decisions;
Decisions to terminate the validity of the decision on tax debt reservation;
Decisions on the application of remedial measures according to the law on handling administrative violations related to tax management;
Decisions on compensation for damages;
Other tax enforcement decisions according to the law.
What are regulations on enforcement by deducting money from the taxpayer’s salary or income in Vietnam?
According to the provisions in Clause 3, Article 130 of the 2019 Law on Tax Administration, the agency or organization employing the taxpayer managing the wages or income of the person subject to enforcement of tax enforcement decisions has the following responsibilities:
- Deduct a portion of the wages or income of the person subject to enforcement of tax enforcement decisions and transfer the deducted amount into the state budget account at the State Treasury as outlined in the enforcement decision on tax enforcement decisions from the nearest payment wage or income period until the full amount of tax debt is deducted according to the enforcement decision on tax enforcement decisions.
- Notify the decision issuer and the person concerned.
- In case the tax debt has not been fully deducted according to the enforcement decision and the labor contract of the person subject to enforcement is terminated, the employing agency or organization must notify the issuer of the enforcement decision on tax enforcement decisions within 05 working days from the termination date of the labor contract.
If the agency or organization employing and managing the wages or income of the person subject to enforcement of tax enforcement decisions intentionally does not implement the enforcement decision on tax enforcement decisions, it shall be fined for administrative violations.
