The Government issued Decree No. 08/2023/ND-CP dated 05 March 2023 on several regulations on the offering and transactions of individual corporate bonds in the domestic and international markets with some notable content as follows:

– Responsibilities for bond interest payment obligations of bond issuers:

Regarding the offering of bonds in the domestic market, if the issuer is unable to make full and timely payment of bond principal and interest in VND according to the issuance plan disclosed to investors, the issuer may reach an agreement with bondholders using the following principles:

• • The payment must comply with the regulations of the civil code and relevant laws. In the case of conditional business lines, the payment must also comply with regulations of law governing such conditional business lines;
  • The payment must be made with the consent of bondholders;
  • The issuer shall make ad hoc information disclosure and assume full responsibility for the legal status of assets used for paying bond principal/interest under regulations of the law.

– Principles of changing terms and conditions of bonds:

Changes in terms and conditions of bonds must comply with the following provisions:

• • Comply with the negotiation principle to pay the principal and interest of the bond to maturity with other assets;
  • The initial maturity of bonds, as defined in the issuance plan disclosed to investors, may be extended up to 02 years;
  • The issuer shall enter into a negotiation with the bondholder that does not accept changes in terms and conditions of the bond to ensure investors’ rights and benefits. If the bondholder refuses negotiation, the issuer shall perform all obligations to the bondholder according to the issuance plan disclosed to investors (even if changes in terms and conditions of the bond have been accepted by bondholders representing at least 65% of total bonds).

– Regarding bond offerings of which information is to be disclosed before offering has been sent to the stock exchange before the effective date of this Decree, but the distribution of bonds has not yet been completed, the distribution of bonds shall comply with regulations on time limits for distribution of bonds in each offering under Decree No. 65/2022/ND-CP.

II. Guiding certain content of construction contracts

The Minister of Construction issued Circular No. 02/2023/TT-BXD dated 03 March 2023 which provides detailed guidance on certain content in construction contracts with some notable content as follows:

– The subjects of application include:

Organizations and individuals involved in the establishment and performance management of construction contracts of construction investment projects using public investment funds or state capital other than public investment funds and construction contracts between project enterprises and construction contractors executing bidding packages of projects on investment in the form of public-private partnerships.

– Temporary payment:

The temporary payment value and security interest on the temporary payment shall be decided based on the specific conditions of each temporary payment, ensuring efficiency and avoiding capital loss. Some specific cases:

• For adjustable unit price-based contracts, if there is no data on adjustment of unit price or contract price upon payment deadline, the unit price in the contract shall be used to make temporary payment.
• For a product or work that is under construction and has not yet been completed according to the contract’s requirements, the temporary payment shall be made based on the completion, for each specific case and the details of the unit price of such product or work stated in the contract.

– Methods for adjusting prices of construction contracts:

• The method of adjusting contract prices shall comply with Appendix I of this Circular. The application of price adjustment methods must conform to the characteristics of the relevant task, contractual price type and payment currency, and shall be agreed upon in the contract;
• For construction consultancy contracts with time-based payments (by month, week, day or hour), the adjustment of the salary rate for experts shall comply with the adjustment formula for the labor cost element specified in Section I in Appendix I to this Circular.

– Forms of construction contracts herewith include:

• Form of consulting contract in Appendix II issued together with this Circular, for contracts of consultancy for implementation of the preparation of feasibility study report, construction survey, work construction design, work construction implementation supervision;
• Form of construction implementation contracts in Appendix III issued together with this Circular;
• Form of EPC contracts in Appendix IV issued together with this Circular, for package contracts. For the fixed unit price- or adjustable unit price-based contracts or combined price-based contracts, the parties shall, based on the legal regulations and this Circular, amend and supplement terms of a form of EPC contracts for the establishment of their contracts.

III. Personal income tax policy for foreigners

The Hanoi City Tax Department issued Official Letter No. 11000/CTHN-TTHT dated 13 March 2023 on the personal income tax of foreigners. Accordingly, the Tax Department responded to Official Letter No. 007/CV-SHB FC of SHBank Finance Company Limited (the “Company”) on having problems on determining the personal income tax (“PIT”) for foreigners, with the following comments:

• If in 2022, the Company has a foreigner who does not qualify for the conditions of being a resident according to Article 1.1 of the Circular 111/2013/TT-BTC, then that foreigner shall be determined as a non-resident individual and the scope of determination of PIT is income generated in Vietnam, regardless of where the income is paid and received. The Company paying income is responsible for withholding 20% before paying income to individuals according to Article 18 of Circular 111/2013/TT-BTC;
• In the case that in 2023 and the following years, a foreigner who qualifies for the conditions of being a resident according to Article 1.1 of Circular 111/2013/TT-BTC, the scope of determination of PIT is income arising inside and outside Vietnam’s territory, regardless of the income payment place as according to Article 2 of the Circular 119/2014/TT-BTC. For incomes from salaries and wages of foreigners who are resident individuals who sign labor contracts of three (03) months or more, income-paying organizations and individuals shall deduct tax according to the partially progressive tariff regulated in Article 25.1 of Circular 111/2013/TT-BTC.
• The Company, based on the actual situation, compared with the provisions of the law cited in this Official Letter No. 11000/CTHN-TTHT, should comply with the regulation.