Job Discussion Forums

[Mr Wind-up Bird]

Went to see them yesterday - plenty of work but pretty dodgy contract T&Cs (they withhold 25% of your salary 'til you serve 6 months). Anyone on here worked for them & got anything good/bad to say?

[sigmoid]

SEAMEO has been around a long time and they may be having trouble competing with all the new schools that are opening in terms of getting teachers. I think they have a good reputation among the students.

I knew a guy who worked for them and he didn't have too many complaints, but his primary source of work was another school.

SEAMEO seem to have decent facilities in a nice location. My advice might be to give them a try, but they will amost undoubtedly ask you to teach the kiddy program Saturday AND Sunday 7:30 - 9:30 and we're talking A.M. here.

[Snaff]

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[PotKettleBlack]

25% indeed. SEAMEO was one of the first schools I stopped in at because it seemed to have a decent reputation, central location and just seemed a nice place to work. From my two visits there I will note that the staff seemed a bit friendlier and on the ball than many other schools in Saigon. The 25% figure is true, though they only mentioned it after asking if I was a trained teacher in my native country. Must be trying to ward off the backpacking teachers I guess.

Though it is one of the nicer schools in Saigon as far as aesthetics go, I would advise you to have a serious think before signing this contract. How long have you been in Saigon? It's not a long term city for many people - I admit I couldn't stick it out. You may get sick of the place in a lot less than six months what with monsoon season, bird flu and the extremely low English fluency rate of the locals. Not a bad place though if it suits you.

I know a Vietnamese girl who works at SEAMEO as a teacher aid. It seems SEAMEO utilises the two teacher approach - one local, one foreign. Not really the best way to teach English but probably a nice learning curve for first-time teachers with knees of jelly.

Also, if you think the contract is bad at SEAMEO wait until you see some of the other schools. These terms and Conditions that would be illegal in most developed countries; luckily in Vietnam the contract means nothing anyway. Don't expect any rules that protect the interests of anybody but the school.

[Snaff]

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[spycatcher]

25% deduction for the first 6 months.

IHMO this is what all schools should do as this is personal income tax.

Everyone should be responsible for their own personal income tax, however, as many foreigners don't really know about the PIT issues the school decides to pay the tax for them.

The interpretation of the tax situation for foreigners seems to be unclear at the moment, but if a foreigner is in the country for less than 183 days in a year (definition of year doesn't seem to be clear) then they are classified as a "nonresident" and are then liable for 25% PIT on all earnings. Once they go over this 183 days then they are reclassified as a "resident" (for tax purposes) and normal tax rates apply.

Normal tax rates are a lot lower. They are worked out on a graduated scale, but on average are about 5-10% of earnings for a full time teacher.

I reiterate, without knowing exactly what Seameo is doing, that I believe Seameo is doing the correct thing legally and other schools should follow suit. I believe Apollo does something similar.

I believe the reasons some other schools give for not doing this is that they recruit teachers from overseas that these teachers have no idea of the tax system in Vietnam so choose to publish net rates to their teachers and sort out their tax for them. This is not ideal as there can be issues with who receives tax rebates etc.

In reality the tax system is vastly complicated and I suspect that many long term Vietnam teachers may come a cropper to this in years to come as I suspect that not many schools are paying their entire PIT for them and legally it is the employee that is responsible for his own PIT.

I say "well done" to Seameo and Apollo for leading the way in this matter!

[PotKettleBlack]

Good point spycatcher... after all, SEAMEO is a government-run school. Makes a big difference I guess.

[Snaff]

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[spycatcher]

25% of total earnings is correct for the first 183 days of you being in Vietnam. Employers have difficulty explaining to the tax man that the date you arrived in Vietnam is not the date you started working for them so they normally deduct/pay the 25% from the day you start and continue doing so for 183 days.

On average a teacher who is regarded as a "resident" has to pay 0-40% tax. From memory teachers who earn about 1300 usd take home have to pay about 5-10% PIT on this amount. Actually their salary has to be grossed up first and then they pay PIT on this higher amount.

What really should happen is that you pay your tax every month (first 6 months at 25% then every month afterwards on the graduated scale then at year end the taxman looks at your total earnings for the year and works out your average pay per month and you should pay the graduated tax rate on this average monthly amount. This usually means that you should receive a tax rebate. In reality the tax department looks at this whenever it wants to (maybe one or two years later) and never gives rebates but does allow, so I have heard, you to deduct this overpayment from future PIT payments.

I believe that legally as your employer is meant to withold this PIT for you and pay it on your behalf your employer has to supply proof of payment of the PIT if you ask for it.

All schools should change and follow Seameo's and Apollo's example. It is the other schools that are wrong. If someone goes to work in another country they should abide by their laws and pay their taxes. The teachers in Vietnam are molly cuddled at the moment. This is partly because the tax department doesn't have its house in order, but I believe it will very soon, and also because most of the schools are new and haven't had a good grilling from the tax department yet so are unaware of all the implications of the PIT laws.

As I wrote in my previous posting the PIT is vastly complicated, so the above should only be reagarded as an indication.

No comment on Seameo other than it appears to me that they are dealing with the tax in the correct way.

[Snaff]

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[spycatcher]

Snaff: some more of a brain dump and answers to some of your questions:

Generally Vietnamese institutions don't pay tax/negotiate with the tax man

Generally Foreign companies do pay PIT. There are many stories of expats being paid huge sums offshore. For the large part I do not believe these, or say they are highly exaggerated as their is little benefit for a company to do this. The top PIT rate for foreigners is 40% and the Business income tax (BIT) rate is 28%. If a company pays its expats offshore and avoids Vietnamese PIT they are in effect increasing their onshore profits on which they will be taxed 28% on. This is little incentive when you consider the risks involded such as: potential fines of 300% of the amount, removal of all tax incentives and withdrawal of business licence.

In the education industry it is a different story, however. Most foreign companies in education get "BIT tax holidays" IE 4 years at 0% next 4 years at 5% afterwards at 10%. Here there can be benefits to paying staff offshore and avoiding PIT. One also has to realise that education is education and there are not many highly paid expats in education.

One way, I believe schools cheat their PIT is as follows:

If a foreigner earns less than 8 million dong per month they don't pay and tax. Over this and tax is paid.

Teachers that leave are still kept on their books and are officially paid a salary. In reality this money goes in to a company slush fund and teachers that earn over 8 million dong per month are paid out of this slush fund.

Also note that many foreign companies here haven't been here long and don't know the score when it comes to tax. The schools that have been here sometime are: Apollo, Seameo......v.v.(granted Seameo is only at best quasi foreign).

In my opinion, having worked with both paper and computerised accounting systems, paper based systems are harder to cheat with. It is much easier to hide a column on an excel spead sheet than it is in a book.

I fear I am boring people with tax issues so suggest that I will only answer private emails on this issue from now on if there are any.

I wish to remain anonymous for now.

I joined this forum as I thought that I could be a positive contributor and to give my opinions on things that I thought were misleading or incorrect.

In fact so many of the supposed facts on this forum are IMHO absolute trash.

[Snaff]

Thanks Spy,

I apologize for questioning your position.

You have been and are, very helpful.

Thanks for answereing my questions. I am ignorant about such matters.

You are very, very, helpful. I respect your contributions, and the other people here do to.

Cheers, Snaff.

[Lana]

jsut wanted to clarify about the tax

In Hanoi, two schools - Apollo and Language Link - are required to withold 25% tax from a teacher for the first six months they work in the country. So if you have already worked for someone else in VN, paid tax and can get a letter to prove it, it doesn't apply. As I understand it, that is because they are both completely foreign owned. They don't actually WANT to do it (obviously it makes recruiting teachers more difficult!) but unlike the other schools can't get away with not following this law because they are so frequently audited.

At the end of the six months you get back a 15% rebate but check carefully about this - last I heard the government wanted to change it so you have to wait til the start of the next financial year in Feb. The system is ok if all goes to plan and you won't get work at those schools anyway without at least a six month committment. I took a holiday with my rebate! But it IS risky - if problems arise that force you to go home early, then you can lose a hell of a lot of cash.

[glockoglock]

[H5N1]