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

JOINT CIRCULAR

Guidelines for implementing financial regulations concerning Vietnamese workers and experts going abroad for a limited period pursuant to Decree No. 152/1999/NĐ-CP dated September 20, 1999 of the Government.

Vietnamese workers and experts going to work abroad for a limited period pursuant to Government Decree No. 152/1999/NĐ-CP dated September 20, 1999

the Government Decree No. 152/1999/NĐ-CP dated September 20, 1999

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Pursuant to Decree No. 152/1999/NĐ-CP dated September 20, 1999 of the Government on sending Vietnamese workers and experts (hereinafter referred to as workers) abroad for a limited period, the Ministry of Finance and the Ministry of Labor, Invalids and Social Affairs jointly issue guidelines for implementing certain financial regulations as follows:

A- GENERAL PROVISIONS.

1. The subjects covered by this Circular are enterprises supplying labor and workers going abroad for a limited period 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 in accordance with current State regulations.

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

c/ Workers going abroad for a limited period under individual contracts directly signed with foreign employers 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, when obtaining a license to send workers abroad for a limited period, must pay a licensing fee.

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

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

2. Financial regulations set forth in this Circular also apply to the subjects specified in Article 26 of Decree No. 152/1999/NĐ-CP.

3. The Overseas Labor Management Bureau under the Ministry of Labor, Invalids and Social Affairs is the unified managing authority responsible for collecting, managing, and using licensing fees, management fees, and fines imposed on enterprises in accordance with their intended purposes.

4. All revenues from sending Vietnamese workers abroad for a limited period shall be implemented in accordance with 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 - FOR WORKERS

1. Security Deposit.

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

The amount of the deposit is agreed upon in the contract between the enterprise and the worker but shall not exceed the limit specified in Appendix No. 01/LT attached to this Circular.

Workers must deposit the security deposit with the enterprise within 15 days before departure 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 State 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 must 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 ocean transport vessels, 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 ocean transport vessels, 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 paid a new salary, or the salary in the contract is adjusted during the working period, 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 extension period.

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 in accordance with current State regulations.

4. Personal Income Tax.

Workers with high income must pay personal income tax in accordance with current State regulations.

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

5. Other Expenses.

Workers must bear the following expenses:

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

b/ Health examination costs according to the levels prescribed by the Ministry of Health.

c/ Costs for processing documents and procedures for working abroad in accordance with current State regulations.

After being selected and meeting the conditions to work abroad, 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 as required by the contract with the foreign partner.

6. Handling Violations.

During the implementation process, if workers violate the contract to work abroad for a limited period, they shall 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 premiums, and personal income tax (if applicable) based on the contractual salary and the time calculated up to the day the worker returns to the country.

In cases where the worker's contract is terminated prematurely and they must return due to objective reasons (war, natural disasters, business bankruptcy, health issues, etc.), they are exempt from paying the aforementioned obligations from the date of contract termination.

II- FOR ENTERPRISES

1. Licensing fee for specialized operations.

The licensing fee for specialized operations involving 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 payment as part of their costs for sending workers abroad.

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

Enterprises sending Vietnamese workers to work abroad for a limited period are permitted to collect deposits 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 the host country.

a/ Amount and method of deposit payment:

Based on specific conditions of each market, each contract, and each individual worker, enterprises negotiate with workers regarding the amount of deposit, which can be paid in full before departure or deducted monthly from the worker's salary, but the total deposit amount cannot exceed the limit specified in Appendix No. 01/LT attached.

b/ Type of deposit payment:

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

c/ Management of deposit payments:

Within 15 days of receiving the deposit from the worker, the enterprise must deposit the entire amount collected into an account opened at the State Treasury where the enterprise is headquartered. The term of deposit is determined by the duration of the contract for working abroad.

Withdrawals from this account can only be made when the enterprise presents a contract termination record to the State Treasury where the account is held. In cases where the worker does not come to terminate the contract, the State Treasury will only release the deposit upon written approval from the Overseas Labor Management Department of the Ministry of Labor, Invalids, and Social Affairs.

d/ Settlement of deposit payments:

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

Workers may authorize relatives (with confirmation from the People's Committee of the commune or ward) to terminate the contract with the enterprise.

+ In cases where the worker does not cause economic damage to the enterprise, the enterprise must fully refund the deposit and interest on the deposit according to the regulations of the State Treasury where the enterprise has an account.

+ 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 according to Clause 6, Section I, Part B of this Circular.

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

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

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

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

3. Service Fees.

3.1. Service fees are revenue from enterprises' activities 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 workers are paid in any currency (local currency or US dollars), the service fee is calculated based on the percentage of that currency or calculated based 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 upfront or in installments during the contract period.

If the enterprise collects service fees upfront from the worker, it must be in Vietnamese Dong at 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 their labor export activities under current financial management regulations, including language testing, skill assessment for workers according to the requirements of the foreign partner, and pre-departure orientation education for workers.

4. Management Fees.

a/ Level of management fees:

Enterprises sending Vietnamese workers to work abroad pay a management fee of 1% of the service fee revenue to the Overseas Labor Management Department of 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 construction, joint venture profit-sharing abroad, or foreign investment, the management fee rate shall be 0.5% of the total wage fund paid to the workers.

The business may account for the management fee payment as part of the operating costs for sending workers to work abroad for a limited period.

b/ Method of payment:

The business temporarily pays the management fee to the Department of Labor Management with Foreign Countries-Ministry of Labor, Invalids and Social Affairs when registering contracts for sending Vietnamese workers to work abroad for a limited period. The amount of temporary payment is based on the registered number of workers, their salary levels, and working time 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 Labor Management with Foreign Countries-Ministry of Labor, Invalids and Social Affairs the following reports:

+ Report on the implementation of income and expenditure 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 (Annex No. 02/LT).

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

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

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

6. Handling Violations.

The business must compensate workers for losses caused by the business or the foreign party's breach of contract according to Vietnamese law and the laws of the host country, and at the same time, shall 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 amount, collecting incorrect service fees, or collecting at the wrong time as prescribed.

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

- Failing to submit reports within the prescribed deadline.

b/ A fine of VND 1,000,000 to VND 3,000,000 and may be suspended from sending Vietnamese workers to work abroad for a limited period or have its operating license revoked 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.

- Unilaterally imposing unauthorized charges.

Workers may file complaints against businesses that fail to comply with current state policies and regulations and the terms agreed upon in the labor contract termination.

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

7. Within 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 for air tickets, deposits, service fees, social insurance, and overseas management fees (if applicable) to the workers.

III- REGIME FOR MANAGING LICENSE FEES, MANAGEMENT FEES, AND PENALTY PAYMENTS

1/The Department of Labor Management with Foreign Countries-Ministry of Labor, Invalids and Social Affairs is authorized to collect license fees, management fees, and penalty payments 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 balance 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.