1. A typical violation from the past to the present: Discrepancies between the figures from the Social Insurance agency and the figures from the Tax agency.
In 2019, the Vietnam Social Security (VSS) issued Official Letter No. 530/BHXH-BT on reviewing, exploiting, and controlling the development of social insurance participants through data provided by the tax authorities. Among the key objectives of this letter, strengthening the organization of surprise specialized inspections of social insurance contributions in 2019 was highlighted.
Following surprise inspections conducted up to mid-2019, many businesses were found to have discrepancies between their social insurance and tax records, leading to inspections, audits, and penalties by inter-agency bodies.
Most businesses that are inspected and penalized fall into the following situations:
firstThe difference between the number of people contributing to social insurance and the actual number of employees at the enterprise is significant.
MondayThe difference between the amount of social insurance contributions paid to the social insurance agency and the actual amount collected monthly from the employee.
Tuesday, Incorrect calculation of social insurance contributions, failure to differentiate between contributions that are deductible and those that are not.
In most cases, businesses that collaborate with Expertis in Payroll and Social Insurance services They all "shared" the reason for the discrepancy in the declared figures: inaccurate updating of the new regulations of the 2019 Social Insurance Law, and a lack of proper understanding and application of the law.
2. What are the penalties for violations, and at what level of violation does one become criminally liable?
The crime of evading social insurance, health insurance, and unemployment insurance contributions for employees is regulated and guided by the following: Article 216 Criminal Code No. 100/2015/QH13 The regulation dated November 27, 2015 stipulates:
“1. Any person who is obligated to pay social insurance, health insurance, and unemployment insurance for employees but fraudulently or by other means fails to pay or fails to pay in full as prescribed for 06 months or more, in one of the following cases, and who has been administratively penalized for this act but continues to violate the law, shall be punished.” A fine of 50.000.000 VND to 200.000.000 VND, non-custodial correctional punishment up to 01 year, or imprisonment from 03 months to 01 year.:
a) Evading insurance contributions ranging from VND 50.000.000 to less than VND 300.000.000;
b) Evading insurance contributions for 10 to fewer than 50 employees.
2. Committing an offense falling under one of the following circumstances shall be punishable by a fine of VND 200.000.000 to VND 500.000.000 or imprisonment from 06 months to 03 years:
a) Committing the crime two or more times;
b) Evading insurance contributions ranging from VND 300.000.000 to less than VND 1.000.000.000;
c) Evading insurance contributions for between 50 and fewer than 200 people;
d) Failure to pay the insurance contributions collected or deducted from employees as stipulated in point a or point b of Clause 1 of this Article.
3. Committing an offense falling under one of the following circumstances shall be punishable by a fine of VND 500.000.000 to VND 1.000.000.000 or imprisonment from 02 to 07 years:
a) Evading insurance contributions of VND 1.000.000.000 or more;
b) Refusing to pay insurance premiums for 200 or more people;
c) Failure to pay the insurance contributions collected or deducted from employees as stipulated in point b or point c of Clause 2 of this Article.
4. The offenders may also be subject to a fine of between VND 180,000 and VND 200, banned from holding certain posts, practicing certain occupations or doing certain jobs from 20.000.000 years to 100.000.000 years.
5. If a commercial legal entity commits the offense prescribed in this Article, it shall be fined as follows:
a) If the offense falls under the circumstances specified in Clause 1 of this Article, the penalty shall be a fine of VND 200.000.000 to VND 500.000.000;
b) If the offense falls under the circumstances specified in Clause 2 of this Article, the penalty shall be a fine of VND 500.000.000 to VND 1.000.000.000;
c) If the offense falls under the circumstances stipulated in Clause 3 of this Article, the penalty shall be a fine of VND 1.000.000.000 to VND 3.000.000.000.”
To mitigate these violations, Expertis will highlight the key differences between the periods before and after the Social Insurance Law changes for businesses facing difficulties in this area through the comparison table below.
3. Guidance on the 2019 Social Insurance Law: Identifying the correct aspects for proper understanding
Before 01 / 01 / 2018
Businesses have a habit of using 3 ITEMS Regarding salary separation, it is as follows:
☸ Salary 1: Salaries are shown on the Financial Statements (Tax Returns).
☸ Salary 2: Salary is used as the basis for calculating and paying social insurance contributions.
☸ Salary 3: Actual wages published by the company: This is the payroll calculated according to the agreement (labor policy, employment contract, actual attendance records).
After the date of 01 / 01 / 2018
Businesses must make three payments of wages. UNIFIED, LAWFUL for SAFE For the following three reasons:
► There is a reconciliation between the tax authorities and the social insurance agency during tax settlement, or when the social insurance inspection agency conducts an inspection.
► The Social Insurance Inspectorate is intensifying inspections of labor records in Ho Chi Minh City.
Important:
The act of evading social insurance contributions has been elevated to a criminal offense (Article 216, Penal Code 2015, effective from January 1, 2018).
4. Expertis' advice
Businesses today need to have a proper understanding of the law and the actual implementation of the law by regulatory agencies in order to guide their actions, ensure compliance with the law, and protect themselves from the risks of violations.
Guide to the 2019 Social Insurance Law | Process for building a Salary and Social Insurance System to ensure consistent and legally compliant salary components within the enterprise.
The best way to reduce risk and save costs is to build a payroll system that unifies the three items above, encompassing three jobs:
1. Develop appropriate labor policies and prepare complete labor records (internal regulations, employment contracts, salary scales).
2. Calculate the salary in accordance with the labor policy in step 1.
3. Calculate social insurance contributions and record accounting entries based on the salaries calculated in point 2.
By doing so, businesses can operate with peace of mind during tax settlements or labor inspections!
