Labor Code No. 45/2019/QH14

On 20th November 2019, the National Assembly issued the Labor Code No.45/2019/QH14. We highlighted several prominent regulations as follows:

Public holidays

On Independence Day (2nd of September): employees shall be entitled to full 2-day off, can be on the previous or the next day of the 02nd of September.

Labor contracts

There will be only 2 types of labor contracts: indefinite-term labor contract and definite-term labor contract.

The seasonal labor contract will have been revoked since the new Labor Code comes into force.

Moreover, the new format of labor contract has been added: the labor contract in the form of electronic data which is conformable with electronic transaction laws shall have the same value as that of a physical contract.

Overtime working hour

Instead of 30 hours per month, the maximum overtime shall be increased to 40 hours per month. The total overtime working hours shall not exceed 200 hours in 1 year except for some special cases which are allowed to work overtime to maximum of 300 hours per year.

This Labor Code shall enter into force and totally replace the Labor Code No.10/2012/QH13 as of 1st of January 2021.


Official Letter No. 97637/CT-TTHT (OL 97637) about provision for bad debt

On 30th December 2019, Hanoi Department of Taxation issued OL 97637 about provision for bad debt, with the following contents:

The company has overdue receivables or not overdue receivables with a high possibility that the company cannot collect them. In case the receivables meet the requirements stated at Clause 1, Article 6, Circular No.48/2019/TT-BTC issued by the Ministry of Finance, the company should make provision for bad debt according to regulations at Article 6 of this Circular 48. Also, in case the provision meets the requirement of Article 6, it shall be considered as deductible expense for CIT purpose.

For receivables which are not overdue, in case the company has evidence to determine that they cannot be collected (the debtors go to bankruptcy, or go out of business…), the company estimates the loss (maximum equal to the value of receivables in the accounting book) for making provision.


Official Letter No. 25606/CT-TTHT (OL 25606) about tax policy

On 20th December 2019, Binh Duong Department of Taxation issued OL 25606, with the following contents:


In a year, the company signs a labor contract and pays salary to employees who has working time at other company.  In this case, the employees have the responsibility to terminate their personal deduction at the old company. The company collects the dossier from the employees to process the personal deduction registration with the tax office, according to regulation at Point I, Clause 1, Article 9, Circular No. 111/2013/TT-BTC.

In case the company registers the personal deduction for employees with the tax office and receives the notice about errors in the registration (cannot register the personal deduction), the company should submit the list of cases containing errors (according to the notice from tax office), together with the registration dossiers to the tax office for getting the support from tax office.

VAT invoice for on-spot export

The company sells goods to a foreign company, and that foreign company requests the company to deliver the goods to another company in Vietnam. According to regulation at Clause 1, Article 86, Circular No.38/2015/TT-BTC dated 25th March 2015 issued by the Ministry of Finance, the export transaction is called on-spot export. The company must use the same VAT invoice as the invoice used for goods consumed domestically, based on regulation at Clause 2, Article 17, Circular No. 219/2013/TT-BTC dated 31st December 2013 issued by the Ministry of Finance.