Joint Circular No. 16/2000/TTLT-BTC-BLÐ guiding the financial regime for Vietnamese workers and experts working abroad for a limited period under Decree No. 152/1999/NĐ-CP dated September 20, 1999 of the Government.

CIRCULAR

JOINT CIRCULAR NO. 16/2000/TTLT-BTC-BLDT dated February 28, 2000 GUIDING THE FINANCIAL REGIME FOR VIETNAMESE WORKERS AND EXPERTS WORKING ABROAD FOR A LIMITED PERIOD OF TIME UNDER DECREE NO. 152/1999/NĐ-CP OF THE GOVERNMENT DATED SEPTEMBER 20, 1999
THIS CIRCULAR GUIDES THE IMPLEMENTATION OF THE FINANCIAL REGIME FOR VIETNAMESE WORKERS AND EXPERTS WORKING ABROAD FOR A LIMITED PERIOD OF TIME AS PROVIDED FOR IN DECREE NO. 152/1999/NĐ-CP OF THE GOVERNMENT DATED SEPTEMBER 20, 1999

Pursuant to Decree No. 152/1999/NĐ-CP dated September 20, 1999 of the Government on sending Vietnamese workers and experts abroad for a limited period of time, the Ministry of Finance and the Ministry of Labor, Invalids and Social Affairs jointly issue the following guidance on certain financial regimes:

A- GENERAL PROVISIONS.

1. The subjects of this Circular are enterprises supplying labor and workers going abroad for a limited period of time under the forms prescribed in Article 2 and Article 3 of Decree No. 152/1999/NĐ-CP dated September 20, 1999 of the Government.

1.1. Regarding workers:

a/ Workers must pay personal income tax and contribute to and enjoy social insurance benefits according to current regulations of the State.

b/ Workers going abroad for a limited period of time through enterprises supplying labor have the obligation to deposit a security deposit and pay service fees to the enterprise sending them abroad.

c/ Workers going abroad for a limited period of time under individual contracts directly signed with foreign employers when registering their contracts at the Department of Labor, Invalids and Social Affairs must pay administrative fees for registration, monitoring, and management of labor. The maximum amount is 100,000 VND (one hundred thousand dong).

1.2. Regarding enterprises:

a/ Enterprises meeting the conditions stipulated in Clause 1, Article 5 of Decree No. 152/1999/NĐ-CP, upon being granted a license to send workers abroad for a limited period of time, must pay a licensing fee.

b/ Enterprises must pay management fees to contribute to strengthening the management of overseas labor.

c/ Enterprises sending workers abroad for a limited period of time under labor supply contracts are permitted to collect security deposits and service fees from workers.

2. The financial regime as prescribed in this Circular also applies to the subjects specified in Article 26 of Decree No. 152/1999/NĐ-CP.

3. The Overseas Labor Management Department of the Ministry of Labor, Invalids and Social Affairs is the unified management agency responsible for Vietnamese workers going abroad for a limited period of time, collecting and managing the licensing fees, management fees, and fines paid by enterprises according to their intended purposes.

4. All revenues from sending Vietnamese workers abroad for a limited period of time shall be implemented according to the provisions of this Circular.

5. Workers and enterprises violating financial regulations will be dealt with according to the provisions of this Circular.

B - SPECIFIC PROVISIONS

I - REGARDING WORKERS

1. Security Deposit.

Before going abroad for a limited period of time through enterprises supplying labor, workers must deposit a sum of money with the enterprise to ensure the fulfillment of the signed contract.

The amount of the deposit is agreed upon in the contract between the enterprise and the worker, but it cannot exceed the limit set out in Appendix No. 01/LT attached to this Circular.

Workers must deposit the security deposit with the enterprise within 15 days before leaving the country to work abroad.

After completing the contract and returning home, if the worker does not breach the contract causing damage to the employer and the enterprise sending them abroad, they will receive back the full security deposit and interest as stipulated by the Treasury. If the worker breaches the contract causing damage to the employer and the enterprise sending them abroad, the security deposit will be deducted according to the provisions of Clause 6, Section I, Part B of this Circular.

2. Service Fees.

Workers going abroad for work have the obligation to pay service fees to the enterprise sending them abroad according to the following provisions:

a/ In cases where the salary stipulated in the contract does not include food, accommodation, work injury insurance, and health insurance during the working period abroad, the service fee payable shall not exceed 12% of the monthly salary stipulated in the contract. For officers and seafarers working on transport ships, the service fee payable shall not exceed 18% of the aforementioned monthly salary.

b/ In cases where the salary stipulated in the contract includes food, accommodation, work injury insurance, and health insurance without being separated, the worker must pay a service fee not exceeding 8% of the monthly salary stipulated in the contract. For officers and seafarers working on transport ships, the service fee payable shall not exceed 12% of the aforementioned monthly salary.

c/ In cases where the worker's employment contract is extended with the employer and the new salary is paid, or during the working period, the salary stipulated in the contract is adjusted, the service fee payable will be recalculated based on the new salary from the date of adjustment and the payment period will cover the entire duration of the extended contract.

d/ Procedure for paying service fees: Based on the contract between the worker and the enterprise, the worker pays the service fee according to the provisions of Point 3.1, Clause 3, Section II, Part B of this Circular.

3. Social Insurance.

Workers must contribute to and enjoy social insurance benefits according to current regulations of the State.

4. Personal Income Tax.

Workers with high income have the obligation to pay personal income tax according to current regulations of the State.

In cases where workers are employed in countries that have signed Double Taxation Avoidance Agreements with Vietnam, they only need to fulfill their tax obligations according to the provisions of such agreements.

5. Other Costs.

Workers must bear the following costs:

a/ Airfare from Vietnam to the country of work (except in cases where the employer covers the cost).

b/ Health examination costs according to the level set by the Ministry of Health.

c/ Costs for preparing and processing documents for working abroad according to current regulations of the State.

After being selected and meeting the conditions to go abroad for work, if the worker no longer wishes to go, the worker must bear the costs incurred by the enterprise for language testing, skill testing, and pre-departure orientation training for the worker according to the requirements of the contract with the foreign partner.

6. Handling of violations.

During the implementation process, if workers violate their contracts to work abroad for a limited period, they will be handled as follows:

- Compensate for material damages caused to the employer according to the laws of the host country and the enterprise sending them abroad.

- Must pay all service fees, social insurance, personal income tax (if applicable) based on the contractual salary and the time of payment calculated up to the day the worker returns to the country.

In cases where the contract is terminated prematurely due to objective reasons (war, natural disasters, bankruptcy of the enterprise, health issues, etc.), the worker is not required to pay the aforementioned obligations from the date of contract termination.

II- FOR ENTERPRISES

1. Licensing fee for specialized business activities.

The licensing fee for specialized business activities related to sending Vietnamese workers to work abroad for a limited period is 10,000,000 VND per license (Ten million dong).

Enterprises may account for the licensing fee paid as part of the costs for sending workers abroad.

2. Collection, management, and settlement of deposit money.

Enterprises sending Vietnamese workers to work abroad for a limited period are permitted to collect a deposit from workers to ensure the fulfillment of signed contracts.

The collection of deposits must be clearly stated in the contract signed between the worker and the sending enterprise and must be completed within 15 days before the worker departs for overseas work.

a/ Amount and method of deposit:

Based on specific conditions of each market, each contract, and each specific group of workers, enterprises negotiate with workers regarding the amount of deposit, which can be collected once before departure or deducted gradually from the monthly salary of the worker, but the total deposit amount shall not exceed the limit specified in Appendix No. 01/LT attached hereto.

b/ Type of deposit:

The deposit is calculated in US dollars. If collected in Vietnamese dong, it is based on the US dollar amount converted to Vietnamese dong at the average inter-bank exchange rate published by the State Bank of Vietnam at the time of collection.

c/ Management of deposit money:

Within 15 days from receiving the deposit from the worker, the enterprise must deposit the entire amount of the collected deposit into an account opened at the Treasury Office where the enterprise's main office is located. The term of deposit is determined according to the duration of the contract for working abroad.

Withdrawal from this account can only be made when the enterprise presents a contract termination certificate to the Treasury Office where the account is opened. In cases where the worker does not come to terminate the contract, the Treasury Office will only allow withdrawal of the deposit upon receipt of a written opinion from the Department of Overseas Labor Management under the Ministry of Labor, Invalids, and Social Affairs.

d/ Settlement of deposit money:

After the worker returns to the country, the enterprise has the responsibility to notify the worker to terminate the signed contract. The settlement of the deposit is carried out simultaneously with the termination of the contract between the sending enterprise and the worker.

The worker may authorize a relative (with confirmation from the People's Committee of the commune or village) to go to the enterprise to terminate the signed contract.

+ In cases where the worker does not cause economic damage to the enterprise, the enterprise must return the full deposit and interest on the deposit according to the regulations of the Treasury Office where the enterprise's account is located.

+ In cases where the worker violates the contract and causes economic damage to the enterprise, the enterprise has the right to deduct the deposit and interest on the deposit of the worker according to Clause 6, Section I, Part B of this Circular.

Any remaining deposit amount after deduction, the enterprise must return to the worker.

- In cases where the worker unilaterally terminates the contract prematurely to engage in illegal activities abroad or fails to come to terminate the contract within three months after notification by the enterprise, the enterprise has the right to deduct the deposit and interest on the deposit of the worker according to Clause 6, Section I, Part B of this Circular and report to the Department of Overseas Labor Management under the Ministry of Labor, Invalids, and Social Affairs.

Any remaining deposit amount after deduction, the enterprise is responsible for tracking at the Treasury Office.

- If the deposit is insufficient to cover the damage caused by the worker, the enterprise has the right to request additional payment from the worker.

3. Service Fees.

3.1. Service fees are the revenue of enterprises from the activity of sending Vietnamese workers to work abroad for a limited period.

- Enterprises collect service fees from workers according to Clause 2, Section I, Part B of this Circular.

If the worker is paid in any currency (local currency or US dollars), the service fee is calculated based on the percentage specified on the salary in that currency or calculated on the equivalent US dollars converted from the currency received at the exchange rate at the time of payment (corresponding to the time of salary payment to the worker).

- In cases where the foreign employer pays the salary directly to the worker, the enterprise may negotiate with the worker to collect service fees: either collected in advance or collected in installments during the contract execution period.

If the enterprise collects service fees in advance from the worker, it must be collected in Vietnamese dong according to the average inter-bank exchange rate published by the State Bank of Vietnam at the time of collection.

3.2. Use of service fees: Enterprises use service fees to fund the export labor activities of the enterprise according to the current financial management system, including language testing, skill assessment for workers according to the requirements of the foreign partner's contract, and pre-departure orientation education for workers before going to work abroad.

4. Management Fee.

a/ Management Fee Rate:

Enterprises sending Vietnamese workers to work abroad pay a management fee of 1% of the service fee revenue to the Department of Overseas Labor Management under the Ministry of Labor, Invalids, and Social Affairs.

In the case where a business sends Vietnamese workers to work abroad under the form of subcontracting, joint venture, or investment abroad, the management fee rate shall be 0.5% of the total wage fund paid to the workers.

The business may account for the amount of the management fee paid as part of the operating costs for sending workers to work abroad on a time-limited basis.

b/ Method of payment:

The business temporarily pays the management fee to the Department of Overseas Labor Management-Ministry of Labor, Invalids and Social Affairs when registering the contract for sending Vietnamese workers to work abroad on a time-limited basis. The temporary payment amount is based on the registered number of workers, their wages, and working hours according to the contract, and will be settled annually.

5. Reporting system:

a/ Periodically and annually, the business must prepare and submit to the Department of Overseas Labor Management-Ministry of Labor, Invalids and Social Affairs the following reports:

+ Report on the implementation of income and payment for the first six months of the year, no later than July 15th, and for the entire year no later than January 30th of the following year (Appendix No. 02/LT).

+ Financial report on the export labor activities, no later than January 30th of the following year (Appendix No. 03/LT).

+ Annual plan based on the implementation situation of the first nine months of the year, no later than October 20th of the previous year (Appendix No. 04/LT).

b/ Submit ad hoc reports as required by the Department of Overseas Labor Management-Ministry of Labor, Invalids and Social Affairs and other competent authorities.

6. Handling of violations.

The business must compensate the workers for damages caused by the violation of contracts by the business or the foreign party according to Vietnamese law and the laws of the host country, and will be subject to the following penalties:

a/ A fine of VND 200,000 to VND 1,000,000 for each of the following cases:

- Collecting more than the stipulated deposit, collecting incorrect service fees, or collecting at the wrong time as prescribed.

- Delaying the deposit payment to the State Treasury as prescribed.

- Delaying the submission of reports as prescribed.

b/ A fine of VND 1,000,000 to VND 3,000,000 and possible suspension of the activity of sending Vietnamese workers to work abroad on a time-limited basis or revocation of the business license for each of the following cases:

- Repeatedly violating the provisions mentioned in point (a) above.

- Collecting deposits from workers without having a contract or without a contract with a foreign partner.

- Imposing unauthorized charges.

Workers may file complaints against businesses that fail to comply with current state policies and contractual terms when terminating employment contracts.

c/ In cases causing serious consequences, administrative disciplinary measures or referral to competent authorities for criminal prosecution may be imposed.

7. After six months from the date when selected workers meet the conditions to work abroad, if the business has not been able to send them, it must inform the workers of the reasons. In such cases, if the workers no longer wish to work abroad or the business cannot arrange for them to go, the business must refund all previously collected amounts regarding airfare, deposits, service fees, social insurance, and overseas management fees (if applicable).

III- REGIME FOR THE MANAGEMENT OF LICENSE FEES, MANAGEMENT FEES, AND FINES

1/ The Department of Overseas Labor Management-Ministry of Labor, Invalids and Social Affairs is authorized to collect license fees, management fees, and fines from businesses as stipulated in this Circular. All revenues from these sources will be managed and utilized according to specific regulations of the Ministry of Finance.

2/ Administrative expenses paid by workers going to work abroad under individual contracts must be included in the annual financial plan of the Department of Labor, Invalids and Social Affairs.

C- IMPLEMENTATION

1. This Circular takes effect from December 1, 1999, replacing Circular No. 05/LB TC-LĐTBXH dated January 16, 1996, and other conflicting documents.

2. During implementation, if there are any difficulties, please reflect them to the Ministry of Finance and the Ministry of Labor, Invalids and Social Affairs for research and resolution.

ANNEX 01/LT

MAXIMUM DEPOSIT AMOUNTS

(Attached to Joint Circular No. 16/2000/TTLT-BTC-BLDTBXH dated February 28, 2000.)
Maximum Deposit Amount

(Issued together with Joint Circular No. 17/2000/TTLT-BTC-BLDTBXH dated February 28, 2000)

REPORT ON INCOME AND PAYMENTS

Managing agency:...

ENTERPRISE NAME:...

Reporting period:...

Deposit

Unit of measurement:

Prepared by Accountant Director

ANNEX NO. 03/LT

(Issued together with Joint Circular No. 16/2000/TTLT-BTC-BLDTBXH dated February 28, 2000)

Controlling Authority: ----------------------------------

Company Name: ---------------------------------

REPORT ON RESULTS OF LABOR EXPORT ACTIVITIES IN YEAR ...

Number of workers sent

Revenue from labor export activities

(Major Technical Specifications and Other Information)

ANNEX NO. 03/LT

Controlling Authority: ___

Company Name: ___

PLAN FOR LABOR EXPORT ACTIVITIES IN YEAR...

Estimated for the current year

Plan for next year

Number of workers to be sent

(Major Technical Specifications and Other Information)

ANNEX NO. 03/LT