Legal & Regulatory

Vietnam Issues Circular 78 on Corporate Income Tax Incentives and Deductions

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HANOI – On June 18, 2014, Vietnam’s Ministry of Finance published Circular 78, which provides additional guidance regarding Decree 218 on corporate income tax (CIT). The Circular will come into effect on August 2, 2014 and will be effective for the whole 2014 tax year.

In the new Circular, the Vietnamese government has reintroduced tax incentives for investments in certain industrial zones. Industrial zones that do not qualify for CIT incentives are those in the inner districts of Ho Chi Minh City, Hanoi, and Hai Phong as well as those located in type 1 provincial cities.

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Vietnam’s 12th Draft Law of Residential Housing Expected to be Favorable Towards Foreigners

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HCMC – As foreign investment in Vietnam has increased significantly over the past few years, demand for housing from foreigners is also accelerating.  At a National Congress meeting on June 18th, many Congressmen expressed their approval towards the 12th Draft Law of Residential Housing, which proposes more opportunities for foreign organizations and individuals who wish to purchase housing in Vietnam.

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Vietnam’s PM Urges Improvement of Customs Process

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HANOI — Vietnam’s Prime Minister, Nguyen Tan Dung, has called the country’s lengthy import-export procedures “unacceptable” and has proposed upgrading the process so that it is more in line with standards around the Asian region.

In particular, Vietnam needs to simplify the customs processes and procedures related to import and export activities in order to reduce the time involved. Additionally, improvements also need to be made in the government’s management capacity so that it can become more transparent and in line with international norms.

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Vietnam’s Land Law Goes Into Effect, More Room for FIEs

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HCMC – On July 1st, 2014, Vietnam’s 2013 Land Law (revised) officially came into effect, The new law has seven more chapters and 66 more articles than the original 2003 Land Law. The new law institutionalizes the points of view and orientations contained in Resolution 11-NQ/TW of the sixth Plenum of the Party Central Committee.

Although the new Land Law still does not allow foreign-invested enterprises to receive the transfer of land use rights or purchase land, it does not prohibit foreign investors from buying the capital associated with the land, for example, factories.

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Vietnam Tightens Regulations on Foreign Sourced Loans

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HANOI – On May 15, 2014, new legislation went into effect that tightened the Vietnamese government’s control of foreign sourced loans. This legislation is of particular importance since many Vietnamese businesses tend to opt for loans from overseas financial institutions and business partners.

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Vietnam Finance and Investment Regulatory Update

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Purchase of shares by foreign direct investors:

HANOI – On February 20th, 2014, Circular 01/2014/ND-CP went into effect, it covers the purchase of shares by foreign investors from Vietnamese credit institutions. This legislation replaced Circular 69/2007/NĐ-CP dated April 20th, 2007.

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Airfares for Overseas Employees Working in Vietnam Not Subject to Personal Income Tax

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HANOI – On May 15, Vietnam’s Ministry of Finance released Official Letter 6375/BTC-TCT which clarified that airfares and related expenses provided to overseas employees for travel between their foreign location and Vietnam are not subject to Personal Income tax (PIT). This ruling will also be applied retroactively to the period prior to the August 15, 2013 issuance of Circular 1 11/2013/TT-BTC.

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Enterprise Law 2005 Amendments Under Discussion

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HANOI – Amendments to the Enterprise Law 2005 are projected to be passed at the 13th National Assembly this October. These draft amendments have received significant attention and opinions from related departments, economic experts and enterprises.

Law on Prohibited and Conditional Business Sectors

According to Mr. Nguyen Dinh Cung, acting director of the Central Institute for Economic Management (CIEM), there are currently 52 prohibited business sectors written into the laws on Investment, Enterprise and Trade. Additionally, there are 335 conditional business sectors specified in 255 legal documents issued by ministries, municipalities and provinces. In fact, there could be other prohibited business sectors speculated in other legal documents but not yet listed in the report. An exact number will be declared when the drafting amendments group finishes its assessment test.

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Circular 39/2014 Issued on Invoicing Regulations in Vietnam

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HANOI – Vietnam’s Ministry of Finance has issued Circular 39/2014 to provide guidance on invoicing regulations, replacing Circular 64/2013. The new Circular will come into effect from June 1, 2014.  The content in the new Circular regards amendments to invoice self-printing and the tightening of the scope of entities allowed to self-print invoices.

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Ho Chi Minh City Cracks Down on Work Permits

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HCMC – The Ho Chi Minh City (HCMC) Department of Labor, War Invalids, and Social Affairs has announced that foreign workers in the city will have to apply for new work licenses when their work permits expire. They will not be able to get an extension.

The new regulation is expected to cause significant inconvenience for many businesses and foreign workers, some of whom may have to return to their home countries in order to obtain their criminal records. This is because the law requires that the criminal records be issued to the government within six months of the foreign worker submitting their application for a work permit.   

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Asia Briefing Bookstore Catalogue 2013