Vietnam Regulatory Brief: Import Standards, Offshore Indirect Investment Requirements, and Proposed SME Tax Breaks
New Requirements for Machinery, Equipment to Take Effect on July 1, 2o16
The Ministry of Science and Technology (MoST) issued a decree describing the requirements and procedures for import of used machinery, equipment and production lines which will take effect on July 1, 2016. Under the decree: used machinery, equipment and production lines which are not specifically prohibited from importing into the country may be imported if they meet the following conditions:
- They are imported within 10 years from the manufacture date.
- They are manufactured based on standards which conform to Vietnam’s National Technical Standards or National Standards; or that confirm with standards of G7 countries on safety, energy saving and environment protection.
The above requirements are exempted if the list of machinery, equipment and production lines has been approved in the investment license application dossier. In addition, used replacement components and spare parts can only be imported if companies need to fox or replace the currently used ones.
New Regulation on Offshore Indirect Investment
Decree 135, regulating offshore investment by Vietnamese investors or individuals, went into effect on February 15, 2016. The regulation allows Vietnamese individuals or corporate entities that are established in the country to participate in offshore indirect investment. This also includes foreign invested companies with less than 51 percent foreign capital. Nevertheless, the State Bank of Vietnam (SBV) is expected to issue a circular on procedures and processes of how to implement the process for individuals.
The offshore indirect investment will be done by two ways: proprietary trading of offshore indirect investment and entrusted offshore indirect investment. In addition, investors can only use their own foreign currency rather than using borrowed funds. While the new regulation is a good step in allowing outbound securities investment from Vietnam, the SBV and Ministry of Planning (MOF) still need to issue the various processes on how to do so. Locals can expect that such procedures should be issued before December 31 of this year.
Startups to Benefit from Proposed Tax Reduction
The Ministry of Finance has proposed to reduce corporate income tax particularly to aid small and medium enterprises. The ministry has proposed two ways to do this, one is by applying a general tax rate of 17 percent from January 1st of this year to 2020 for small and medium enterprises or reducing the general tax rate to 15 percent from the current 20 percent from January 1 of this year to 2020. The ministry has also proposed to reduce the corporate income tax for start-ups with investment projects in preferential areas or undeveloped and rural areas. It has proposed applying a tax rate of 10 percent in 15 years; tax exemption for four years and reduce 50 percent of the tax payable in the next nine years for new projects. The draft is being prepared for comments from the Parliament which will meet in October.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Annual Audit and Compliance in Vietnam 2016
In this issue of Vietnam Briefing, we address pressing changes to audit procedures in 2016, and provide guidance on how to ensure that compliance tasks are completed in an efficient and effective manner. We highlight the continued convergence of VAS with IFRS, discuss the emergence of e-filing, and provide step-by-step instructions on audit and compliance procedures for Foreign Owned Enterprises (FOEs) as well as Representative Offices (ROs).
Navigating the Vietnam Supply Chain
In this edition of Vietnam Briefing, we discuss the advantages of the Vietnamese market over its regional competition and highlight where and how to implement successful investment projects. We examine tariff reduction schedules within the ACFTA and TPP, highlight considerations with regard to rules of origin, and outline the benefits of investing in Vietnam’s growing economic zones. Finally, we provide expert insight into the issues surrounding the creation of 100 percent Foreign Owned Enterprise in Vietnam.
Tax, Accounting and Audit in Vietnam 2016 (2nd Edition)
This edition of Tax, Accounting, and Audit in Vietnam, updated for 2016, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who must navigate Vietnam’s complex tax and accounting landscape in order to effectively manage and strategically plan their Vietnam operations.
- Previous Article Il Vietnam ridisegna la legislazione doganale e tributaria per potenziare la competitività
- Next Article Vietnam Market Watch: Coca-Cola’s Suspension, Mekong Tech Incentives, and Increased National Browsing Behavior