I. Law on amendments and supplements to several articles of Law on Public Investment, Law on Investment in the Form of Public-Private Partnership, Law on Investment, Housing Law, Bidding Law, Electricity Law, Law on Enterprises, Law on Excise Tax and the Law on Civil Judgments Enforcement 2022
Law on amendments and supplements to several articles of Law on Public Investment, Law on Investment in the Form of Public-Private Partnership, Law on Investment, Housing Law, Bidding Law, Electricity Law, Law on Enterprises, Law on Excise Tax and the Law on Civil Judgments Enforcement No. 03/2020/QH15 (the “Law on amendments and supplements to 09 Laws”) dated 11 January 2022 of the National Assembly, takes effect asof 01 March 2022.
The Law on amendments and supplements to 09 Laws has several notable contents as follows:
Firstly, regarding the amendments and supplements to the Law on Investment in the Form of Public-Private Partnership (PPP)
The National Assembly amended the PPP Law in the following ways: promulgated the authority of the Prime Minister to grant decisions on investment policies for projects having a total investment amount equivalent to Group A projects in accordance with the regulations on public investment and using central Government budget capital managed by Ministries, central authorities or using ODA loans and preferential loans from foreign sponsors; decentralized the authority to grant decisions on investment policies to Ministers and Heads of central authorities, other authorities; promulgated the authority of province-level People’s Councils to grant decisions onprojects using ODA funds and other preferential loans from foreign sponsors with a total investment amount equivalent to Group B and Group C projects in accordance with the regulations on public investment.
Secondly, regarding the amendments and supplements to the Law on Investment
With the aim to enhance the decentralization of the authority to grant decisions on investment policies for projects on construction of residential housing and urban areas for localities, the National Assembly amended and supplemented the regulations on investment projects regardless of the source of capital, which were under the Prime Minister’s authority to grant decision on investment policies in accordance with the Law on Investmentin order to decentralize the authority to grant decisions on investment policies to the province-level People’s Committee.
Accordingly, the Prime Minister only grants decisions on policies for investment projects on construction of residential housing (for sale, lease or lease-purchase), and urban areas under following circumstances: Investment projects that use at least 300 hectares of land or with a population of at least 50,000 people; Investment projects that are eligible by the law on cultural heritage, regardless of the area of land used or population within the safety perimeter of relics of level I recognized by the competent authority as the national and special national relics; or within the safety perimeter of relics of level II recognized by the competent authority as the special national relics under the World Heritage List.
In addition, the National Assembly also supplemented the business line of “Trading in cybersecurity products and services” to the List of conditional business lines in Appendix IV enclosed with Law on Investment.
Thirdly, regarding the amendments and supplements to the Law on Bidding
To ensure consistency, stimulate disbursement, complete the project on time, accelerate the process of choosing contractors for procurement of products, services, construction in ODA projects, and improve theefficiency in using ODA capital and preferential loans from foreign sponsors, the Law on amendments and supplements to 09 Laws specifies the activities to be completed in advance for projects using ODA capital and preferential loans as follows: The filing, submission, appraisal and approval of the plan for selection of bidder, bidding dossiers, request for proposals, determination of short lists for procurement activities of projects using ODA capital, and preferential loans shall be done before the conclusion of international treaties, ODA agreements, and preferential loans. Additionally, the Government shall provide details on such regulation.
The amendments and supplements to 09 laws are initiated from the necessity of institutionalize of the strategies, guidelines of the Communist Party, policies of the State on formulating and improving the laws in order to timely overcome the shortcomings and difficulties in terms of institution and legal framework; mobilizing and activatingresources for economic and social development in the context of COVID-19 prevention and control; and simplifying investment and business procedures in order to facilitate citizens and enterprises. Furthermore, it is to meet the requirements arising from the practices related to investment, business, corporate governance;cybersecurity activities; civil judgments enforcement; supplementing policies of socialization of investment in national power transmission system; and encouraging investment in the production and use of sustainable transportation.
II. DECREE 15/2022/ND-CP
Reduce Value Added Tax (VAT) to 8% and treat expenses for COVID-19 prevention and control activities as tax deductible expenses
Decree No. 15/2022/ND-CP (“Decree 15”) dated 28 January 2022 of the Government on the policies of tax exemption and tax reduction following Resolution No. 43/2022 on fiscal, monetary policies supporting socio-economic recovery and development program, takes effect as of 01 February 2022.
Accordingly, VAT shall be reduced to 8% on goods and services currently subject to the 10% VAT rate, except for the following groups of goods and services:
- The telecommunications, financial services, banking, securities, insurance, real estate trading, metal and prefabricated metal products, mining products (excluding coal mining), production of coke, refined petroleum, and chemical products.
- Goods and services subject to excise tax.
- Information technology in accordance with the laws on information technology.
Details of the abovementioned groups of goods and services are specified in the Appendixes issued with this Decree.
Apart from coal mining, reduction of VAT for each type of the prescribed goods and services shall be applied consistently in all stages, including import, production, processing and trading.
Furthermore, Decision 15 also stipulates the deduction of Corporate Income Tax (CIT) of the expenses for COVID-19 prevention and control activities as follows:
- The donations and sponsors in cash or in-kind given for COVID-19 prevention and control activities in Vietnam through the specified recipients are treated as deductible expenses when determining the taxable income of the CIT calculation period of 2022.
- Confirmation minutes made between the parties by using the forms issued with Decree 15 is one of the essential documents for the deduction of CIT.
The formulation and promulgation of Decree 15 is ensured to adhere to the contents specified in Resolution No. 43/2022/QH15, as well as to be consistent and synchronized with tax laws and relevant specialized regulations. With the simplicity, transparency, ease of understanding, ease of implementation and in accordance with the practice of socio-economic life, Decree 15 has facilitated enterprises and citizens in benefiting from the policies of tax exemption, tax reduction, in having advantage in issuing invoices as well as declaration and payment oftaxes. Thereby, it has encouraged enterprises and citizens to recover and develop production as well as business under the policy of the Communist Party and the State; concurrently, it is also in line with the global trend regarding implementation of supporting measures to recover socio-economic development.
III. DECREE 02/2022/ND-CP
Abolishing the legal capital requirement of VND 20 billion for real estate enterprises
Decree No. 02/2022/ND-CP (“Decree 02”) dated 06 January 2022 of the Government on the elaboration of some articles of the Law on Real Estate Trading, takes effect as of 01 March 2022 and replaces Decree No. 76/2015/ND-CP (“Decree 76”).
To ensure the consistency with point a, clause 2, Article 75 of the Law on Investment 2020, Decree 02 stipulates that: Organizations and individuals who conduct real estate trading (except for enterprises, households, and individuals that sell, transfer, lease, lease-purchase real estate on a small and seldom scale) only have to establish an enterprise in accordance with the Law on Enterprise or a cooperative in accordance with the Law on Cooperatives, with a line of business of real estate trading (hereinafter referred to as enterprise), without being required to have legal capital of VND 20 billion.
In addition to abolishing the regulation of VND 20 billion minimum of legal capital, Decree 02 has also supplemented several conditions for organizations, and individuals who conduct real estate trading as follows:
- They must publicize on the enterprise’s website, at the head office of the Project Management Board for projects on investment in real estate trading. In case of doing business through the real estate exchange, must publicize information about the enterprise at the real estate exchange.
- They are only allowed to trade eligible real estate as prescribed in Article 9, Article 55 of the Law on Real estate trading.
- In case an investor is selected as the investor of a real estate project by the laws, such investor must have equity of not less than 20% of the total investment capital for projects using less than 20 hectares of land, not less than 15% of the total investment capital for projects using at least 20 hectares of land or more. In performing real estate trading, the project investor must satisfy the abovementioned conditions.
It is noteworthy that the determination of the equity capital specified in this case is based on the results of the most recent audited financial statements or the results of independent audit reports of the operating enterprise (made in the current year or the preceding year); for a newly established enterprise, the equity shall be determined based on the actually contributed charter capital as prescribed by law.
With numerous new regulations taking effect at the beginning of 2022, the promulgation of Decree 02 of the Government at this time is absolutely necessary. With several amendments and supplements to Decree 76, Decree 02 has created greater consistency, and synchronization in the other relevant legal documents system; specifically, it is more practical and most of its regulations will overcome the inadequacies, shortcomings, andhelps remove many obstacles for not only entities involved in real estate investment and trading but also for thesupervision and management of the State in this field and related fields (planning, investment, land, taxes,…).
IV. DECREE NO. 112/2021/ND-CP
Escrow deposit increases by VND1,000,000,000
Decree No. 112/2021/ND-CP (“Decree 112”) dated 10 December 2021 of the Government on detailing a number of articles and measures for implementing the Law on Vietnamese Guest Workers, takes effect as of 01 January 2022, replacing Decree No. 28/2020/ND-CP (“Decree 28”).
Accordingly, Vietnamese enterprises providing the service of sending Vietnamese workers aboard as guest workers (service enterprises) shall deposit VND2,000,000,000 (Two billion Vietnamese Dongs) at a bank, foreign bank branch legally established and licensed to operate in Vietnam. Compared with Decree 38, the margin level was VND1,000,000,000 (One billion Vietnamese Dongs) and service enterprises were only allowed to make their deposit at a commercial bank which was licensed to operate in Vietnam.
Besides, Decree 112 supplements new regulations providing that enterprises assigning branches to provide the service of sending Vietnamese workers abroad as guest workers must deposit another amount of VND500,000,000 (Five hundred million Vietnamese Dongs) for each assigned branch.
Regarding the ceiling of Vietnamese workers’ deposit to service enterprises, Decree 112 provides that service enterprises and workers shall agree on the banks receiving deposit and making deposit, in which the deposit shall not exceed the specified ceiling and must be clearly stated in the contract for sending Vietnamese workers aboard as guest workers. The deposit of Vietnamese workers is used to pay compensation, if any, for damages caused by Vietnamese workers to service enterprises.
In Taiwanese (China) market, the deposit ceiling for Vietnamese workers is VND12,000,000 (Twelve million Vietnamese Dongs); for Korean market is VND36,000,000 (Thirty-six million Vietnamese Dongs) applied in all business lines except for crew members of offshore fishing vessels and cargo ships. As for the markets of Japan, countries in the Americas, Southeast Asia, the Middle East and other countries, Vietnamese workers shall not be obliged to make deposit (if any, the deposit is equivalent to the value of 01 economy class air ticket from the workplace to Vietnam).
In the context of post-COVID-19, the demand to return to the labor market of Vietnamese workers has increased significantly. The above are some new regulations that service enterprises sending Vietnamese workers aboard as guest workers should consider and comply with so as to avoid violations leading to administrative fines of up to VND400,000,000 (Four hundred million Vietnamese Dongs) for a violation.
V. DECREE NO. 95/2021/ND-CP
According to the new rules, petrol and oil price will be regulated every 10 days
Decree No. 95/2021/ND-CP (“Decree 95”) dated 01 November 2021 of the Government amending Decree No. 83/2014/ND-CP (“Decree 83”) on petrol and oil trading, takes effect as of 02 January 2022.
Accordingly, Decree 95 amends and supplements some regulations relating to petrol and oil trading as follows:
- Supplementing basic price calculation
Basic price of petrol and oil equals (=) Import price of petrol and oil multiplied by (x) import ratio (%) plus (+) domestic price multiplied by (x) domestic production ratio (%).
Accordingly, the new basic price calculation is determined the basic price on the proportion of both 02 (two) sources of import domestic production, instead of relying solely on imported source as before.
2. Petrol and oil price regulation dates
As to petrol and oil price regulation principles, the Decree clearly stipulates that petrol and oil price regulation dates shall be the 1st, 11th and 21st every month. Hence, the interval between two price regulation dates shall be 10 days rather than 15 days as previously, which means that price regulation is conducted three times per month.
In case a price regulation date is on weekend or public holiday, it will be delayed to the working day succeeding the weekend or public holiday. A price regulation period that occurs during the Lunar new year period shall be delayed to the next price regulation period.
In case of fluctuations of price constituents that cause the basic price to increase by more than ten percent (10%) compared with the last previous basic price, or there are considerable fluctuations of petrol and oil prices that have considerable impacts on socio-economic development and people’s life, the Ministry of Industry and Trade shall submit a report to the Prime Minister for considering and deciding specific price regulation measures.
3. Amending and supplementing some terms
3.1 Removing the term “co-ownership” and supplementing the term “retail station leasing”
In the course of applying Decree 83, the regulations on co-ownership have caused many difficulties for the authorities and enterprises in determining what co-ownership is during their managing and trading process. Thus, Decree 95 removes the term “co-ownership” of retail stations, and instead, stipulates that petrol and oil traders can rent retail stations to carry out their business activities, as well as amends regulations on administrative procedures relating to leasing retail stations.
The lessee is wholly responsible for satisfying standards required for operating retail stations and being the title holder of the Certificate of Eligibility for Petrol and Oil Retailing. Such regulation helps enterprises be more flexible in business infrastructure investment and facilitates the issuance of the Certificate of Eligibility for Petrol and Oil Retailing of the local authorities.
3.2 Supplementing a new definition of small scale filling equipment
Operation of small scale filling equipment is permissible if all of the following conditions are satisfied:
- It has undergone measurement and safety inspection by competent authorities;
- It is located in remote areas;
- It is owned by a trader that is a petrol and oil retail agent, general agent, retail franchisee, distributor, major trader or major producer that has a distribution system;
- A petrol and oil trader using small scale filling equipment shall submit notifying documents to the Department of Industry and Trade of the province where the equipment is located in order to be granted the Certificate of Submission of Small Scale Filling Equipment Notification.
It can be observed that the amendments of Decree 95 on property ownership, constituents of the basic price of petrol and oil calculation, the supplementary provisions on small scale filling equipment located in remote areas, and the simplification of administrative procedures will contribute to the stability, transparency of petrol and oil trading functioning in accordance with market mechanisms under the management of the State, and in line with the situations of international petrol and oil market and the socio-economic development, reformation and simplification of related administrative procedures.
VI. DECREE NO. 85/2021/ND-CP
Sellers are required to provide detailed information about goods and services on e-commerce websites
Decree No. 85/2021/ND-CP (“Decree 85”) dated 25 September 2021 of the Government amending Decree No. 52/2013/ND-CP on e-commerce, takes effect as of 01 January 2022.
According to Decree 85, the forms of operation of e-commerce trading floors include 04 following forms: awebsite that allows its members to open booths for displaying, promoting their goods or services; a website that allows its members to create accounts for entering into contracts with their customers; a website that has a specific trading section allowing its members to post their listing goods or services, a social network that operates in one of the abovementioned forms and makes its members directly or indirectly pay fees for such activities. Therefore, from January 1, 2022, in addition to the form of operation of e-commerce trading floors via websites as previously, traders and organizations can also carry out e-commerce activities through social networks such as Facebook, zalo, instagram, …
Pursuant to the new regulations, information about goods and services listed on e-commerce websites has to be sufficiently provided by the seller, specifically:
- In regard to goods/services introduced on websites, sellers must publish information so that buyers can accurately determine particulars of such goods or services and avoid misunderstanding when making decisions on conclusion of contracts.
- Information about goods published on websites shall include information required to be shown on labels of goods as prescribed by the regulations on goods labeling, except distinguishing characteristics of each product such as date of manufacture, expiry date, lot number, chassis number and engine number.
- Sellers of goods and services subject to certain business conditions shall publish information about number, issue date and issuing authority of the license, certificate of eligibility, certification, or other types ofdocuments as prescribed by relevant laws on business conditions for trading of such goods/services.
Besides, Decree 85 provides that The Ministry of Finance shall cooperate in providing information, connecting and sharing data with the Ministry of Industry and Trade on the number of orders for imports/exports traded on e-commerce trading floors; and update the list of foreign suppliers directly carrying out tax registration or tax declaration.
Notably, in case foreign suppliers performing e-commerce activities, digital platform-based business and other services in Vietnam have yet to carry out tax registration, tax declaration and tax payment in Vietnam in accordance with regulations on taxation, the list of them will be updated on the web portal of the General Department of Taxation.
Nowadays, in response to significant developments of e-commerce, the issuance of Decree 85 has created animportant legal corridorfor the Government to manage, regulate and bring this field into the legal framework. Decree 85 has tightened regulations on taxation of e-commerce service suppliers and assigned greater responsibility on e-commerce trading floors with online order functions to handle complaints from consumers, thereby contributing to consumers protection when buying and selling goods/ services via e-commerce.
