After Part 1, Thu Ky Luat continues to introduce Part 2 with the remaining 5 regulations related to salary, tax, and social insurance effective from January 1, 2018.
Article table of contents
6. Changes in Pension Calculation Formula Over the Years
From January 1, 2018, the percentage ratio for calculating monthly pensions for employees eligible for retirement is determined based on Point b, c Clause 2 Article 3 of Decree 134/2015/ND-CP. Specifically:
- For males: Monthly pension = 45% of the average monthly salary used for social insurance contribution corresponding to 16 years (if retiring in 2018), 17 years (if retiring in 2019), 18 years (if retiring in 2020), 19 years (if retiring in 2021), 20 years (if retiring from 2022 onwards) + 2% for each subsequent year;- For females: Monthly pension = 45% of the average monthly salary used for social insurance contribution corresponding to 15 years (if retiring from 2018 onwards) + 2% for each subsequent year;- The maximum pension = 75%.
7. Support From 10% - 30% of Contribution for Voluntary Social Insurance Participants
Voluntary social insurance participants are supported by the State with a percentage (%) of the monthly social insurance contribution based on the poverty standard of rural areas, specifically:
- 30% for voluntary social insurance participants belonging to poor households;- 25% for voluntary social insurance participants belonging to near-poor households;- 10% for other subjects.
The above content is based on Clause 1 Article 12 of Decision 595/QD-BHXH.
8. Imprisonment Up to 3 Years for Illegal Dismissal of Employees
This new point is mentioned in Penal Code 2015, revised and supplemented in Law Amending the Penal Code 2017. Accordingly:
Those who, for profit motives or other personal motives, commit one of the following acts causing serious consequences, shall be fined from VND 10,000,000 to VND 100,000,000, non-custodial rehabilitation for up to 1 year, or imprisonment from 3 months to 1 year:
- Illegally deciding to dismiss officials and public employees;- Illegally dismissing employees;- Coercion, threat to force officials, public employees, employees to resign.
Committing the crime in one of the following circumstances, shall be fined VND 100,000,000 to VND 200,000,000 or imprisonment from 1 year to 3 years:
- Against 2 people or more;- Against women known to be pregnant;- Against those nurturing children under 12 months of age;- Forcing the resigned or dismissed person to commit suicide;- Causing other particularly serious consequences.
9. Imprisonment Up to 12 Years for Using Employees Under 16 in Heavy Work
12 years is the maximum penalty for using employees under 16 years old in heavy work under the following circumstances:
- Causing the death of 2 people or more;- Causing injury or harm to the health of 2 people or more, with a total body injury rate of 122% or more.
The above content is based on the provisions of Article 296 of the Penal Code 2015, amended and supplemented by the Law Amending the Penal Code 2017.
10. Changes in Non-Deductible Expenses When Calculating Corporate Income Tax
Recently, the Government of Vietnam issued Decree 146/2017/ND-CP, amending and supplementing Decree 100/2016/ND-CP and Decree 12/2015/ND-CP related to VAT and CIT.
Notably, the regulations on non-deductible expenses when determining taxable income of businesses include:
- The portion exceeding VND 3 million/month/person for contributions to voluntary retirement funds, voluntary retirement insurance, and life insurance for employees (currently, the regulation only specifies the excess portion of VND 1 million/month/person);- The portion exceeding the legal provisions on social insurance and health insurance for contributions to social welfare funds, health insurance funds, and unemployment insurance funds for employees.
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