Joint Circular No. 76/1999/TTLT/BTC-TLĐLD guiding the deduction and payment of trade union funds

JOINT CIRCULAR

Guidelines for Deducting and Paying Union Fees

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Pursuant to Article 16 of the Trade Union Law dated June 30, 1990;

Pursuant to Article 20 of Decree No. 133/HĐBT dated April 20, 1991 guiding the implementation of the Trade Union Law;

Pursuant to Articles 154 and 155 of the Labor Code dated June 23, 1994;

Pursuant to Article 4 of Decision No. 53/1999/QĐ-TTg dated March 26, 1999 of the Government on certain measures to encourage foreign direct investment;

The Ministry of Finance and the Vietnam General Confederation of Labor issue guidelines for deducting and paying union fees as follows:

I. OBJECTS, AMOUNTS AND BASIS FOR DEDUCTING UNION FEES:

1. Objects for deducting union fees:

- Administrative agencies; public service units; armed forces units; political organizations; political-social organizations; social-professional organizations.

- Enterprises under various economic sectors (state-owned enterprises, private enterprises, limited liability companies, joint stock companies, and other types of enterprises as prescribed by law) where trade unions operate according to the Trade Union Law and the Trade Union Charter.

Foreign-invested enterprises are not subject to the obligation to pay union fees as stipulated in this Circular but shall ensure and create favorable conditions for trade unions to operate in accordance with Articles 154 and 155 of the Labor Code.

2. Amounts and basis for deducting union fees:

a) Administrative and public service agencies shall implement a deduction rate of 2% of the salary fund based on rank and grade and the allowances prescribed in Decree No. 25/CP dated May 23, 1993 and Decree No. 06/CP dated January 21, 1997 of the Government.

b) Enterprises shall implement a deduction rate of 2% of the salary fund, wages, and allowances payable to employees (including contractual workers).

c) The allowances included in the deduction for union fees as mentioned in clauses a and b above include: position allowance, responsibility allowance, regional allowance, attraction allowance, hardship allowance, special allowance, hazardous and dangerous work allowance, mobility allowance, defense and security service allowance, seniority allowance.

d) The allowances excluded from the deduction for union fees as mentioned in clauses a and b above include: preferential allowance for teachers directly teaching in state-run public schools pursuant to Decision No. 973/1997/QĐ-TTg dated November 17, 1997 of the Prime Minister, surgery allowance and 24-hour on-call allowance in the health sector pursuant to Decision No. 974/TTg dated December 5, 1995 of the Prime Minister, night shift allowance, overtime allowance.

II. METHODS, TIME OF DEDUCTION AND ACCOUNTING FOR UNION FEES

1. For agencies, units, and organizations receiving salaries from the State Budget:

a) The Ministry of Finance shall deduct 2% of the salary fund of central-level agencies and organizations receiving salaries from the State Budget and transfer it to the Vietnam General Confederation of Labor.

b) Local financial agencies shall deduct 2% of the salary fund and allowances of agencies and organizations receiving salaries from local budgets and transfer them to the corresponding level labor unions.

c) The deduction and transfer of union fees by agencies and organizations receiving salaries from the State Budget must be accounted for in the State Budget in accordance with the provisions of the State Budget Law and current guiding documents.

2. For agencies, organizations not receiving salaries from the State Budget and enterprises where trade unions exist (excluding foreign-invested enterprises):

Heads of agencies, organizations; enterprise directors shall be responsible for deducting 2% of the salary fund, wages, and allowances and transferring them to the grassroots trade unions of their respective agencies, organizations, and enterprises for management, use, and upward transfer according to the regulations of the Vietnam General Confederation of Labor.

In cases where necessary, labor unions may negotiate with tax authorities to collect union fees on behalf of the unions.

For production and business units, the amount deducted for union fees at 2% shall be accounted for in cost or circulation expenses.

3. Time of deduction for union fees:

- For agencies and organizations receiving salaries from the State Budget, the deduction time shall coincide with the time of issuing budget allocations to these agencies and organizations.

- For agencies, organizations not receiving salaries from the State Budget and enterprises responsible for paying union fees, they shall make payments quarterly, once a month in the first month of each quarter.

- If labor unions entrust tax authorities to collect union fees on their behalf, the deduction time shall coincide with the tax collection time.

III. RESPONSIBILITIES OF FINANCIAL AGENCIES AND LABOR UNIONS

1. Financial agencies shall be responsible for timely and fully transferring union fees of units under their management to labor unions in accordance with this Circular.

2. National Treasury units shall be responsible for creating favorable conditions to assist labor unions at all levels in opening accounts to deposit union fees for managing this source of funds. The annual balance on the union fee deposit account shall be carried over to the next year for use without having to go through end-of-year transfer procedures like other State Budget sources.

3. Labor unions at all levels shall be responsible for urging and collecting full union fees and managing and using the union fee fund in accordance with the regulations of the Vietnam General Confederation of Labor and the current state financial system.

4. The Vietnam General Confederation of Labor shall be responsible for guiding the distribution, use, and reallocation of union fees within the labor union system.

5. The Ministry of Finance shall be responsible for coordinating with the Vietnam General Confederation of Labor to monitor and inspect the management and use of union fee sources in accordance with the current financial management system.

IV. IMPLEMENTATION

This Circular takes effect from July 1, 1999 and replaces Circular No. 103/TT-LB dated December 2, 1994 jointly issued by the Ministry of Finance and the Vietnam General Confederation of Labor guiding the deduction and payment of union fees.

During the implementation process, if difficulties or obstacles arise, please report to the Ministry of Finance and the Vietnam General Confederation of Labor for guidance on resolution.