Regulations on Trade Union Expenses for Foreign Companies

Posted by Reading Time: < 1 minute

Mar. 12 – The Ministry of Finance has released a circular advising on the payment and use of the trade union’s expense for foreign invested companies.

Trade unions will function in accordance with the law on trade union and will include foreign invested enterprises in Vietnam;Vietnamese enterprises with the foreign shareholding of more than 49 percent; and operational offices of foreign investors with business cooperation contracts in Vietnam.

Expenses for trade unions will be equivalent to 1 percent of the salary fund which is paid to Vietnamese employees in such foreign invested enterprises or foreign operational offices and is deductible from corporate income tax. Trade union expense is counted as business expenses for the foreign operational office.

Companies are required to pay within the first month of each quarter. The payment shall be made to the corresponding trade union for that industry or the trade union handling that industry.

The trade union funds will be allotted for trade union’s activities, welfare activities and for salary payments and allowances to trade union officers.