vietnam

Personal Income Tax (“PIT”) treatment on income and expenses paid to employees during COVID-19 pandemic - Oct 2020

Local tax authorities have issued Official Letters as guide for employers and employees in the reporting of income and expenses paid relating to COVID-19 pandemic. To help employers and employees understand how these payments may affect your withholding and reporting obligations, we have summarised the main points as follow.

EVFTA preferential export and import tariffs announced

The Government has issued Decree 111/2020/ND-CP providing Vietnam's preferential export and import tariffs for the period 2020 - 2022 to implement the EVFTA.

Vietnam: Corporate Income Tax Reduced by 30% for 2020

On 25 September 2020, the Government of Vietnam issued Decree 114 which provides guidance on the implementation of a 30% reduction of Corporate Income Tax. This update covers some of the key points.

Alert on immigration

On the 31 August 2020, the Ministry of Health issued Official letter No. 4674/BYT-MT to ministries, ministerial agencies, government agencies and the provincial People’s Committees providing guidelines on Covid-19 prevention and control for a short-term visit by foreigners of less than 14 days to Vietnam.

Customs duty treatment applicable to goods subcontracted to an EPE for processing

The General Department of Customs has just issued an important guidance on the import duty treatment for goods imported from an EPE to domestic market under a subcontracting processing arrangement. We believe this is an interesting topic, especially for companies that enter into subcontracted toll manufacturing arrangements with EPEs.

Major New Restrictions On Telemarketing In Vietnam

In August 2020, the Government passed a new Decree 91/2020 to govern all forms of advertising via telecommunications means such as SMSs, e-mails, and phone calls. Decree 91/2020 will take effect from October 2020 and replace Decree 90/2008.

Digital Signatures in Vietnam

We have seen a ramp up in the e-commerce and online activities (online meetings, signing e-contracts, signing e-resolutions) in the covid-19 pandemic all over the world and Vietnam is no exception. This legal update discuss some features of digital signature and authentication of digital signature under Vietnamese law.

Determination of a group of affiliated enterprises under Vietnam merger control regulations

Group of affiliated enterprises (Nhóm công ty liên kết) is an important concept under the merger control regulations in Vietnam since it is used to calculate the relevant notification thresholds (e.g., market share, revenue, or total assets) of an economic concentration, and the market share of a party to an economic concentration. Unfortunately, Decree 35/2020 provides an unclear definition for this term.

New Amendments to the Law on Laws 2015 in Vietnam

Những sửa đổi, bổ sung mới của Luật Ban hành văn bản quy phạm pháp luật 2015 tại Việt Nam

The National Assembly passed some amendments to the Law on Laws 2015 on 18 June 2020 which will become effective on 1 January 2021 (LPLD 2020). This legal update summarizes the new amendments.

Amendments to the interest expense cap under Decree 20/2017

In June 2020, the Government adopted Decree 68/2020 amending the rules on interest expense cap under Decree 20/2017. Under Decree 20/2017, the total interest expense which can be deductible for the purpose of calculating corporate income tax of a company must not exceed 20% of the company’s EBITDA. The restriction has caused massive objection from Vietnam enterprises since Decree 20/2017’s purpose is to regulate tax arising from related transactions but not to regulate corporate income tax in general.

Proof of origin under EU - Vietnam Free Trade Agreement (EVFTA)

Following our previous customs update on the EU -Vietnam Free Trade Agreement, the EVFTA officially took effect on 01 August 2020. However, pending approval by the Government of the decree regulating the special preferential export-import duty tariff schedule under the EVFTA, the General Department of Customs has issued Official letter 5575/TCHQ-GSQL dated 21/8/2020 guiding provincial customs authorities on procedures to accept proofs of origin.

New Law on Public Private Partnership

On 18 June, the National Assembly passed the Law on Public Private Partnership (PPP) which will come into effect from 1 January 2021 (except for Article 101.6 which halts the application of the BT contract form from 15 August 2020). While the new PPP Law shows the government’s strong commitment in attracting private sector investment to the country’s core infrastructure sectors, it also introduces certain fundamental changes to current PPP/BOT practices which will likely be of concern to foreign investors and lenders.

30% corporate income tax cut in 2020 - Newsbrief

The National Assembly has ratified a Resolution on reduction of 30% CIT payables in 2020, which will come into effect after 45 days from the signing date and apply to 2020 tax year.

Merger filling requirement arising from enforcement of security over shares or capital contribution under Vietnamese Competition Law - Legal Update

Yêu cầu thông báo tập trung kinh tế phát sinh từ việc xử lý tài sản bảo đảm là cổ phần và phần vốn góp theo Luật Cạnh Tranh của Việt Nam

Enforcement of security over shares or capital contribution by a lender, which results in a change of control of the borrower, may be considered as an economic concentration and subject to merger filing requirements under the Competition Law 2018. This could pose a serious timing problem for the lender.

A U-Turn About Preemptive Rights Of Existing Shareholders In Joint Stock Companies In Vietnam

Thay Đổi Toàn Diện Đối Với Quyền Ưu Tiên Mua Của Cổ Đông Hiện Hữu Trong Công Ty Cổ Phần Ở Việt Nam

The provisions on private placement of shares by non-public joint stock company under the new Enterprise Law 2020 now requires a non-public joint stock company planning to conduct a private placement of shares.

Rules of Origin under EU - Vietnam Free Trade Agreement

On 15 June, the Ministry of Industry and Trade issued Circular 11/2020/TT-BCT setting out rules of origin under the EU - Vietnam Free Trade Agreement. Circular 11 set out the criteria for originating products under the EVFTA, Certificate of Origin Form EUR.1 as well as guidance on product specific rules, cumulation of origin, application and inspection of origin of goods.

Vietnam’s Ratification of EVFTA and EVIPA

On 8 June 2020, Vietnam’s National Assembly passed resolutions on the ratification of the EVFTA and the EVIPA. While the EVFTA addresses matters relating to cross-border investments between Vietnam and the 28 state members of the European Union (the “Party”/”Parties”), the EVIPA establishes procedures for dispute resolution if the commitments under the EVFTA are not met.

Merger filling requirement arising from enforcement of security over shares or capital contribution under Vietnamese Competition Law

Yêu cầu thông báo tập trung kinh tế phát sinh từ việc xử lý tài sản bảo đảm là cổ phần và phần vốn góp theo Luật Cạnh Tranh của Việt Nam

Enforcement of security over shares or capital contribution by a lender, which results in a change of control of the borrower, may be considered as an economic concentration and subject to merger filing requirements under the Competition Law 2018. This could pose a serious timing problem for the lender.

Alert on Immigration - July 2020

As of 14 July 2020, Vietnam’s Ministry of Health informed a total of 373 cases of Covid -19 where 95% of affected patients have recovered and no dead recorded. Further, Vietnam has no new community infected case for nearly 3 months and has set up a nationwide new-normal-operation. In terms of the economy, Vietnam reported a 1.81 percent GDP growth in the first half of 2020, which is the lowest since 2011 as advised by the General Statistics Office.

Changes to the Law on Enterprises

On 17 June, the National Assembly passed the amended Law on Enterprises (new LOE) which will be effective from 1 January 2021 and replace the existing 2014 LOE.