A. ELECTRONIC TRANSACTIONS
1. Law on Electronic Transactions No. 20/2023/QH15 passed by the National Assembly on 22 June 2023 (“LOET”)
“Creating a favorable legal corridor for the digital transformation across all industries and sectors”
Serving as a crucial legal framework in the country’s digital transformation, the LOET was enacted not only to remove obstacles from previous legal provisions but also to facilitate transactions conducted in the digital environment and optimize the provision of online public services. Below are some notable new points of this Law:
Firstly, the LOET permits the conversion of documents from physical to digital format (electronic documents) provided that certain legal requirements are met. This contributes to greater flexibility and shorter processing times for online transactions or services, as the entire process can be completed electronically.
Furthermore, the Law affirms that secured electronic signatures or digital signatures possess the same legal validity as handwritten signatures on paper documents; additionally, the LOET includes more detailed provisions regarding the recognition and utilization of foreign electronic signatures; which is expected to promote cross-border transactions between organizations and individuals, save time and reduce intermediary costs.
Compared to the 2005 LOET, the new Law has added more prohibited acts in electronic transactions, such as impersonation, falsification, or the illegal dissemination and commercialization of data messages, helping to prevent, detect, and deter violations.
Overall, the LOET going into effect will bring many positive impacts to both individuals and businesses. Based on this, businesses need to proactively update, review, and adjust their internal processes and related systems to quickly meet the compliance requirements of the national electronic transactions laws.
B. PAYMENT SERVICES
2. Decree No. 52/2024/ND-CP dated 15 May 2024 of the Government regarding cashless transactions (“Decree 52”)
“Improving the legal framework to promote cashless payments.”
Currently, cashless payment methods are becoming popular and experiencing significant growth, leading to increased market demands for a more robust and detailed legal framework to regulate these activities. Decree 52 was issued to address these demands and challenges, as well as to create a safe and convenient payment environment for individuals and businesses.
Accordingly, although electronic money has been around for a long time, its legal nature remains unclear. Decree 52 has now officially defined the concept and nature of electronic money, as well as specifying the means used to store electronic money include electronic wallets and prepaid cards. Regarding service providers, banks and foreign bank branches are permitted to provide electronic wallet and prepaid card services; while payment intermediaries are only allowed to provide electronic wallet services linked to the customer’s payment account or debit card.
In particular, Decree 52 includes highly detailed and robust provisions regarding payment intermediary services compared to the old provisions, notably, it adds new types of recognized payment intermediary services (such as financial switching services, collection and payment support services, and electronic payment portal services, etc) and a series of detailed conditions for the provision of these services (such as requirements for licenses, charter capital, key personnel, and specialized technology, etc). It should be noted that these conditions must be fully met and maintained throughout the service provision.
With its wide-ranging impact, Decree 52 is expected to increasingly promote the application of information technology, creating safe and convenient payment products that effectively satisfy market demands in the context of national modernization.
3. Circular No. 17/2024/TT-NHNN dated 28 June 2024 issued by the State Bank on the opening and use of payment accounts at payment service providers (“Circular 17”)
“Biometric verification is required for electronic transactions”
Circular 17 was issued by the State Bank (“SBV”) based on Decree 52. The notable new points of Circular 17 focus on tightening the legal framework for opening and using payment accounts (“PAs”).
Accordingly, when opening a PA via electronical means, Circular 17 stipulates that banks must verify the biometric information of the PA holder (for individual customers) or the lawful representative (for organization customers) by matching it with the biometric data (i) stored in the encrypted information storage of the citizen identification card, or (ii) collected and verified.
Similarly, during the use of PAs, Circular 17 supplements the regulation that withdrawals and payments electronically can only be made from PAs after the accurate matching of the identification document and biometric information of the PA holder or his/her representative (for individual customers) or lawful representative (for organization customers). This regulation applies to individual PAs from 01 January 2025, and to organizational payment accounts from 01 July 2025. By these deadlines, if customers have not yet registered the biometric information, they must go directly to the bank to conduct transactions and can no longer do so online as before.
As such, individuals and organizations must pay attention to the process and their responsibility to provide biometric data in a timely manner in order to avoid interruptions in opening and using their PAs.
C. TAX
4. Decree No. 64/2024/ND-CP dated 17 June 2024 of the Government on extending the deadline for paying value-added tax, corporate income tax, personal income tax, and land rent in 2024 (“Decree 64”)
“Further extending the deadline for paying tax in 2024”
Pursuant to Decree 64, from 17 June 2024 to 31 December 2024, certain entities will be granted an extension for paying value-added tax (“VAT”), corporate income tax (“CIT”), personal income tax (“PIT”), and land rent with specific time frames. The detailed information is summarized as follows:
The extension does not apply to all taxpayers but only to those operating in specific economic sectors. For example, enterprises, organizations, households, and individuals engaged in agriculture, forestry, fisheries, construction, drainage and wastewater treatment, or operating in the transportation and warehousing, accommodation and food services, education and training, and real estate sectors, etc.
The specific extension is as follows:
- for VAT (excluding import VAT): the extension period ranges from 02 to 05 months, depending on the specific case, and is calculated from the original tax payment deadline.
It is important to note that enterprises and organizations granted an extension must still file the Reports on their monthly or quarterly VAT returns, even if they are not required to pay the tax amount reported.
- for CIT: there is a 03-month extension for the provisional CIT payment of Quarter II of the 2024 tax year.
- For VAT and PIT of business households and individuals: the payment deadline for taxes incurred in 2024 is extended to 30 December 2024.
- For land rent: 02-month extension from 31 October 2024 is granted for 50% of the annual land rent due in 2024 for entities that are directly leased land by the Government under Decisions or Contracts of the competent authorities on a yearly payment basis.
Entities eligible for the extension should take note of the above information and arrange appropriate funding to take advantage of this policy.
