A. BIDDING
1. Law on Bidding No. 22/2023/QH15 passed by the National Assembly on 23 June 2023
“Addressing bidding obstacles in the healthcare sector and simplifying the bidding process”
On 23 June 2023, the National Assembly passed the Law on Bidding No. 22/2023/QH15 (“Law on Bidding”). Serving as a crucial legal framework for regulating public procurement activities in the field of health care services, this amended Law on Bidding aims to overcome past obstacles and ensure safety, economic efficiency, openness, and transparency. It specifically addresses unresolved issues and bottlenecks in the public bidding and procurement at the state-owned healthcare centers, introducing several significant new regulations, such as:
- Increasing the level of autonomy of public healthcare facilities in order to ensure quality services by allowing these facilities to make their own decisions on procuring medications outside the list of those covered by the health insurance funds, and to make decisions on selecting contractors regarding bid packages for procurement using loan capital (with the exception of capitals of state origins).
- Allowing centralized procurement of rare medications with a small amount of use, helping buyers to easily negotiate with the suppliers and be proactive with the supply source, ensuring enough medications are available for examination and treatment.
- Allowing direct appointment of contractor for procurement of medications, medical devices which the healthcare facilities are unable to provide for emergency treatment, avoiding harm to the health and life of the citizen; or to procure medications and medical devices which there is only one manufacturer on the market.
The Law on Bidding intends to simplify the bidding process and procedures compared to the former Law by way of removing certain intermediate review and approval procedures; clearly defining important timeframes and milestones, or allowing for connection and information sharing between the national bidding network system and electronic portals in order to shorten the bid evaluation time. Especially, the gradual move towards online bidding is starting from 1 January 2025.
B. BANKING & FINANCE SERVICES
2. Law on Credit Institutions No. 32/2024/QH15 passed by the National Assembly on 18 January 2024
“Tightening the legal framework in the banking activities”
On 18 January 2024, the National Assembly officially adopted the Law on Credit Institutions No. 32/2024/QH15 (“Law on Credit Institutions”) with 15 Chapters, 210 Articles and effective from 01 July 2024, introducing many remarkable new points:
Accordingly, the Law on Credit Institutions has reduced the shareholding ratio of shareholders and related parties (“RPs“) in credit institutions (“CIs”) to limit cross-ownership or control manipulation in the banking industry. Specifically, for a shareholder whose organization is not allowed to own more than 10% of the charter capital (previously 15%), or shareholders together with the RPs, this ratio is 15% (previously 20%), while for individuals, the 5% ratio is still maintained.
Besides that, the new Law also prohibits CIs from linking the sale of non-mandatory insurance products with the provision of banking products and services in any form to overcome and prevent CIs from forcing customers to buy insurance contrary to their needs and will when accessing loans. In addition, regulations on the disclosure of information have been supplemented, especially where shareholders owning from 01% or more of the ICs’ charter capital must provide information and CIs must publicly disclose information about these shareholders to ensure transparency.
Especially, CIs are not allowed to grant credit to a customer exceeding 10% of their own capital (previously 15%), and 15% for a customer with RPs (previously 25%). However, this reduction will be gradually implemented until 2029. This reduction in lending ratios aims to help CIs diversify their credit portfolio and minimize overdue risks.
In this amendment, the right to seize collateral of CIs when handling bad debts is no longer maintained in light of the spirit of Resolution No. 42/2017/QH14 dated 21 June 2017 of the National Assembly on piloting the handling of bad debts of CIs. Therefore, CIs need to consider and strictly control the granting of credit from the stage of accessing dossiers, disbursement, use of capital, debt recovery to the handling of secured assets.
3. Decree No. 83/2023/ND-CP (“Decree 83”) amending and supplementing several articles of Decree No. 95/2018/ND-CP (“Decree 95”) regarding the issuance, registration, depositing, listing, and trading of government debt instruments on the securities market
“Amending, supplementing provisions regarding private issuance of Government bonds”
Effective as of 15 January 2024, Decree 83 has amended and supplemented Decree 95 regarding the private issuance of Government bonds, setting out a detailed legal framework for practical implementation.
Compared to previous regulations, Decree 83 has supplemented a definition for private issuance of Government bonds as the distribution of Government bonds to each buying entity through two (02) methods, the first is direct sale, and the second is through a commercial bank as a distributing and paying agent.
The implementation process of issuing Government bonds begins with the Vietnam State Treasury making an issuance plan and reporting to the Ministry of Finance. After obtaining the approval, the Vietnam State Treasury will execute the aforementioned approved plan.
If issuing Government bonds via the distributing agent, one key issue to consider is that the selection and signing must be with an entity that meets the conditions required by Decree 83, typically that the commercial banks must have the function of providing bond issuance agent services, operating network conditions or a distribution and payment plan that meets the needs of the issuing organization.
C. TAX
4. Decree No. 94/2023/ND-CP prescribing value-added tax reduction in accordance with Resolution No. 110/2023/QH15 dated 29 November 2023 of the National Assembly (“Decree 94”)
“Reducing the value-added tax rate for certain goods and services in the first half of 2024”
The main content of Decree 94 concerns the reduction of value-added tax (“VAT”) for groups of goods and services currently subject to the 10% tax rate. The specific reduction amount depends on the VAT calculation method used by the business:
- If the tax is calculated using the deduction method, the tax rate is reduced from 10% to 8%.
- If the tax is calculated using the percentage method on turnover, then a 20% reduction is applied to the percentage rate used to calculate the tax.
It is important to note that this reduction is only applicable from 01 January 2024 to 30 June 2024.
However, the aforementioned VAT reduction does not apply to the groups of goods and services specified in Annex I, II, and III of Decree 94, which primarily belong to the sectors of finance, banking, real estate, telecommunications, insurance, etc., and those subject to special consumption tax. Additionally, according to Decree 94, goods and services subject to a 5% VAT rate will not be reduced. Furthermore, the VAT reduction applies uniformly across the stages of import, production, processing, and commercial business.
