Workers paid 3 times normal daily wage for working annual leave days

By KPMG
Mon, October 31, 2022 | 12:35 pm GMT+7
Photo courtesy of Lsxlawfirm.com.

Photo courtesy of Lsxlawfirm.com.

1. Our company is a wholesale supplier of electronic products in Vietnam. As part of our marketing campaign, we offer the trade discount or sale bonus to a number of business individuals within our supply chain. Do we have to withhold any taxes upon the grant of such promotion programs?

Under current regulations, the company must withhold, declare and pay taxes on behalf of business individuals upon the grant of such trade discount or sale bonus. The applicable PIT rate is at 1% VAT and 0.5% PIT. Please note that in case the company bears such PIT and VAT costs for business individuals, the VAT portion will not be creditable for VAT purposes and tax costs will not be deductible for CIT either.

2. In accordance with our internal labor policy, it was mutually agreed that the employees would have 12 days of annual leave. Sometimes, due to urgent production orders, we agreed with the employees so that the employees would go to work on their pre-scheduled/approved annual leave days. How should we pay salary to the employees for the work days during the pre-scheduled/approved annual leave?

According to recent guidance from the Ministry of Labor, Invalid and Social Affairs, in case employees, upon mutual agreement with the employer, have to work on their pre-scheduled/approved annual leave days, such days will be considered overtime and the employer is required to pay the employee at least 300% of the normal daily wage.

3. Our company is an industrial park developer who engages in the factory rental activities. Could our service be qualified for 8% VAT rate as regulated under Decree 15/2022/ND-CP?

In accordance with applicable regulations, factory leasing should be classified as “housing rental and non-residential land use right” (sector code 681410, which belongs to the real estate trading sector) and thus is not qualified for the 8% VAT rate as regulated under Decree 15/2022/ND-CP.

Comments (0)
  • Read More
Vietnam parliament passes historic revised law on local government organisation, establishing two-tier model

Vietnam parliament passes historic revised law on local government organisation, establishing two-tier model

The National Assembly, Vietnam's legislature, on Monday endorsed the revised Law on Local Government Organization, with 100% of the 466 members present voting in favor.

Politics - Mon, June 16, 2025 | 5:01 pm GMT+7

Vietnamese fruit and vegetable export to EU grows 33% in 4 months

Vietnamese fruit and vegetable export to EU grows 33% in 4 months

Vietnamese fruits and vegetables such as mangoes, pistachios, pineapples, and coconuts are gaining popularity in the European market, with export revenues rising sharply in Jan-April by as much as 41% to 200% year-on-year.

Economy - Mon, June 16, 2025 | 4:19 pm GMT+7

Vietnam's oil shipping major PVTrans to pay record high dividend

Vietnam's oil shipping major PVTrans to pay record high dividend

PetroVietnam Transportation Corporation (PVTrans), a subsidiary of state-owned Petrovietnam, will issue nearly 113.9 million shares to pay 2024 dividends, raising its charter capital to VND4,699 billion (over $180 million).

Companies - Mon, June 16, 2025 | 3:51 pm GMT+7

How retail giant Aeon Mall rapidly expands presence in Vietnam

How retail giant Aeon Mall rapidly expands presence in Vietnam

Japanese retailer Aeon Mall has employed a consistent strategy to expand its footprint across Vietnam: partnering with domestic companies that possess land funds earmarked for commercial real estate development.

Real Estate - Mon, June 16, 2025 | 12:10 pm GMT+7

Two Vietnamese stocks face bourse delisting for information disclosure violations

Two Vietnamese stocks face bourse delisting for information disclosure violations

Nam Song Hau Trading and Investing Petroleum JSC (PSH) and Koji Asset Investment JSC (KPF) are facing mandatory delisting from the Ho Chi Minh Stock Exchange (HoSE) due to serious breaches of information disclosure regulations.

Finance - Mon, June 16, 2025 | 9:20 am GMT+7

MBBank offers free app for business households' sales management, electronic invoice issuance

MBBank offers free app for business households' sales management, electronic invoice issuance

MBBank (MB) is offering its mSeller application for free – a solution to support sales management and issuance of electronic invoices exclusively for business households, small traders, and micro-sized enterprises.

Companies - Mon, June 16, 2025 | 9:05 am GMT+7

How to invest in a volatile Vietnamese stock market

How to invest in a volatile Vietnamese stock market

After a strong recovery from the market bottom of 2025 on April 9, the VN-Index has entered a correction phase, with six out of eight sessions showing declines between June 4 and Friday, June 13.

Finance - Mon, June 16, 2025 | 8:00 am GMT+7

Third round of Vietnam-US reciprocal trade pact talks sees 'significant progress'

Third round of Vietnam-US reciprocal trade pact talks sees 'significant progress'

The third technical round of negotiations for a reciprocal trade agreement between Vietnam and the U.S. has concluded in Washington, D.C., with "significant progress made and gaps narrowed in all areas of negotiation," according to Vietnam’s Ministry of Industry and Trade.

Economy - Sun, June 15, 2025 | 9:57 pm GMT+7

HCMC seeks to expand infrastructure cooperation with Guangdong-Hong Kong-Macao Greater Bay Area

HCMC seeks to expand infrastructure cooperation with Guangdong-Hong Kong-Macao Greater Bay Area

Ho Chi Minh City is aiming to expand cooperation with the Guangdong-Hong Kong-Macao Greater Bay Area (China) in infrastructure, one of the city’s key sectors following its merger with Binh Duong and Ba Ria-Vung Tau provinces.

Economy - Sun, June 15, 2025 | 8:00 pm GMT+7

Digital assets legalized in Vietnam

Digital assets legalized in Vietnam

Vietnam has officially legalized digital assets with the approval of the Law on Digital Technology Industry by the National Assembly, the country's legislature, on Saturday.

Finance - Sun, June 15, 2025 | 3:07 pm GMT+7

$2.5 bln LNG power plant in northern Vietnam set for groundbreaking in late 2025

$2.5 bln LNG power plant in northern Vietnam set for groundbreaking in late 2025

A $2.56 billion LNG-fueled power project in the northern Vietnam province of Thai Binh is slated to break ground later this year, according a project report dated June 2025.

Energy - Sun, June 15, 2025 | 10:06 am GMT+7

Vietnam’s tech unicorn VNG expects 2025 loss to narrow by 47%, plans name change

Vietnam’s tech unicorn VNG expects 2025 loss to narrow by 47%, plans name change

VNG Corporation, Vietnam’s first tech unicorn, projects a net loss of VND620 billion ($2.38 million) in 2025, down 47% from last year.

Companies - Sun, June 15, 2025 | 8:00 am GMT+7

Prime Minister suggests AstraZeneca build pharma factory in Vietnam

Prime Minister suggests AstraZeneca build pharma factory in Vietnam

Vietnam is willing to license AstraZeneca immediately to build vaccine and pharmaceutical factories, said Prime Minister Pham Minh Chinh.

Industries - Sat, June 14, 2025 | 10:59 pm GMT+7

Sugary drinks subject to excise tax in Vietnam from 2027

Sugary drinks subject to excise tax in Vietnam from 2027

Sugary drinks in Vietnam will be subject to an 8% excise tax starting in early 2027 and 10% from 2028, according to the adjusted Excise Tax Law, passed by the parliament on Saturday.

Economy - Sat, June 14, 2025 | 4:56 pm GMT+7

Ericsson should focus on 6G research, build database for AI in Vietnam: Prime Minister

Ericsson should focus on 6G research, build database for AI in Vietnam: Prime Minister

Prime Minister Pham Minh Chinh has suggested Ericsson's cooperation with Vietnam should focus on piloting innovation initiatives, 6G research, and building a database for AI in the country.

Economy - Sat, June 14, 2025 | 3:59 pm GMT+7

Swedish giants H&M, Syre to scale up operations in Vietnam

Swedish giants H&M, Syre to scale up operations in Vietnam

H&M, a globally renowned fashion brand from Sweden, plans to expand its network of stores in Vietnam to over 20 in the time to come, said CFO Adam Karlsson.

Industries - Sat, June 14, 2025 | 2:16 pm GMT+7