The Vietnamese Government has recently issued the Decree No. 68/2020/ND-CP in order to amend and supplement Point 3, Article 8 of Decree No.20/2017/ND-CP with regards to the deductibility of interest expenses for calculation of Corporate Income Tax. Decree 68/2020/ND-CP will take effective from tax year 2019 onward.
On 22 April 2020, the General Department of Taxation (“GDT”) issued Official Letter No. 1606/TCT-DNL to provincial tax departments confirming that the letter of credit service is subject to VAT according to the Law on VAT and the Law on Credit Institution.
The Government issued Decree 58/2020/ND-CP on 27 May 2020 guiding employer's contribution to the Social Insurance Fund for occupational diseases and accident. Decree 58 comes into effect on 15 July 2020.
Companies which engage in export production, toll manufacturing activities, and Export Processing Enterprises are required to submit annual customs finalization reports on their usage status of import duty exempt materials, exported products and actual consumption norms during the year.
The National Assembly has approved the new PIT changes in their recent meeting to increase personal and dependant relief in 2020.
Vietnam's National Assembly has officially ratified the EVFTA. After this ratification, the EVFTA will be effective soon and it is expected to boost the trade volume between Vietnam and the EU.
Further to the support to businesses stated in Directive 11/CT-TTg, the Government issued on 29 May Resolution 84/NQ-CP aimed at further reduction of the pandemic’s impact on businesses.
Due to the current COVID-19 outbreak, many customs declarants are unable to submit preferential Certificates of Origin (“CoO”) at time of importation or within 30 days of the registered date of the customs declarations. Recognising this difficulty, the Ministry of Finance has issued Circular 47/2020/TT-BTC dated 27 May 2020 regulating the deadlines for submitting CoO to enjoy special preferential import duty rates.
The Competition Law 2018 does not exempt internal restructuring within the same group of companies from merger filing requirements. That said, arguably, internal restructuring between companies which are under the control of the same ultimate parent company is not subject to merger filing in Vietnam.
Under Vietnamese law, the rules of interpretation of contract are mostly provided under Article 404 of the Civil Code 2015. According to this provision, the order of priority in interpreting a contract seems to be (1) “mutual intention” (ý chí chung) of the parties; (2) contract wording; and (3) each party’s intention and customary practice. This update examines the rules of interpretation.
The merger filing thresholds under the new Decree 35/2020 are drafted broadly and have no exception. Accordingly, many M&A transactions, which have no anti-competitive impact in Vietnam are still subject to filing requirements. A filing process could take substantial time and effort since at law and in practice, the competition authority (NCC) has very broad discretion in demanding additional information or documents about the parties. This update reviews some potential structures for overcoming the merger filing threshold in Vietnam.
The long awaited new fit-in tariffs (FiT) for solar power projects were finally introduced by the Prime Minister’s Decision 13/2020/QD-TTg. However, some aspects of these new rules will cause concern to investors.
The Ministry of Finance has now released a draft circular to provide some guidance on its implementation. When it comes into effect, this would replace the current Circular on tax registration, i.e. Circular 95/2016.
The Competition Law 2018 (“CL”) came into effect on 1 July 2019 and prohibits (i) competition-restraining agreements, (ii) abuse of dominant market position/monopoly position, (iii) economic concentration, and (iv) unfair competitive practices. The government issued Decree 35/2020/ND-CP dated 24 March guiding the Competition Law 2018. Decree 35 will come into effect on 15 May.
During recent inspections of the application of Certificate of Origin Form E, Customs have questioned C/O's validity in case multiple product items are combined and declared in C/O box 7. Accordingly, the General Department of Customs has recently issued an instruction on the required content in Box 7 in cases of combined declarations for multiple products in Official Letter No. 575/TCHQ-GSQL dated 31 January 2020.
In September 2019, the Supreme Court gave an important Opinion to lower courts about how to deal with a loan agreement by a borrower who has failed to obtain appropriate corporate approval. This update discusses the Opinion and its potential impact.
The Vietnamese Government has issued an important decree implementing the Competition Law 2018. Among other things, the Government has introduced a (mostly) complete new set of merger filing thresholds. This update discusses the new thresholds and their potential impact on mergers and acquisitions and thus investment in Vietnam.
Important Vietnamese legal terms can be looked up, with the corresponding term in the other language presented (Vietnamese <-> English). Very helpful resource for those professionals working in both languages
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