Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you.
1. Regulations on tax registration and e-tax transactions to be amended2. New decree to raise investor confidence in leisure property market
3. 15th National Assembly to debate two draft laws on May 24
4. Consider easing restrictions on foreign ownership of construction projects: VCCI
5. Measures suggested to guarantee corporate bond market’s stability
6. Government excludes property, banking sectors from VAT rebate proposal
——————————-
Find more details as below:
1. Regulations on tax registration and e-tax transactions to be amended
Some highlines are as below:
- Personal identification numbers (PINs) issued to individuals under the law on citizen identification could be used as a substitute for tax identification numbers (TINs), according to a draft circular designed by the Ministry of Finance to amend Circular 105 of 2020 on tax registration and Circular 19 of 2021 guiding e-tax transactions.
- This new regulation would apply to individuals having incomes liable to personal income tax (except businesspersons), dependents of taxpayers, and representatives of organizations and households that have tax liabilities to the state budget.
- As soon as taxpayers receive the notice from tax offices, they may start to use PINs as a substitute for TINs in tax transactions, including also adjustment or supplementation of tax liabilities already determined under the previously granted TINs.
- At the same time, tax offices would monitor and manage all taxpayers’ data by PINs. Those who have yet to receive such notice from tax offices could continue to use their TINs as usual.
- Regarding those who are not granted PINs under the law on citizen identification, if they have registered and activated level-2 e-identification accounts under Decree 59 of 2022, and the electronic identification and authentication system is connected with the General Department of Taxation’s portal, they might use e-identification accounts to carry out e-procedures for tax registration without having to submit copies of passports or other personal identification papers.
2. New decree to raise investor confidence in leisure property market
Some highlines are as below:
- A new government decree is expected to help remove difficulties for the domestic leisure property market, which is experiencing a 10-year low in demand, experts have said.
- Decree No. 10/2023/ND-CP on amending and supplementing some articles of the decree guiding the implementation of the Land Law has come into force from May 20, 2023.
- The tightening of real estate loans and high-interest rates are among the roadblocks to the market. Meanwhile, the channel for mobilizing investment capital through corporate bonds has yet to revitalize.
- Under Decree No. 10/2023/ND-CP, buyers of condotels, officetels, and resort villas have ownership certificates from May 20.
- The ownership term of the condotel depends on the purpose of land use following current regulations but not exceeding 50 years of the ownership term for land allocated or leased by the State for commercial or service use.
- The General Statistics Office reported that Vietnam’s tourism industry recorded a strong recovery with a year-on-year 19-fold increase in foreign tourists to 3.7 million in the first four months of 2023.
3. 15th National Assembly to debate two draft laws on May 24
Some highlines are as below:
- The law building work will be the focal task of the 15th National Assembly during the third working day of its fifth session on May 24.
- In the morning, legislators will listen to a verification report on the draft revised Law on Bidding, and then opine on some contentious contents of the legal document.
- The draft revised law, which was also scrutinized at the fourth sitting of the 15th legislature, prescribes banned acts and incentives towards domestic enterprises, aiming to raise competitiveness, publicity, transparency and efficiency in bidding.
- Also in the morning, deputies will look into reports on State budget balance, State budget balance audit, and State budget balance assessment for 2021.
- In the afternoon, they will scrutinize some debatable issues of the draft Law on Civil Defense, and give opinions to proposals and verification reports on the further application of the 2 percent reduction in the value added tax under a resolution dated January 11, 2022, and the investment plan of a transport project.
4. Consider easing restrictions on foreign ownership of construction projects: VCCI
Some highlines are as below:
- To assist the growth of the real estate market, the Vietnam Chamber of Commerce and Industry (VCCI) has proposed allowing foreign individuals and organisations to acquire construction sites.
- According to the VCCI, several provisions in the draft lack compatibility with pertinent legal documents. For example, the draft stipulates that foreign individuals are not permitted to rent or rental-purchase construction activities.
- Additionally, this regulation is inconsistent with the provisions of Clause 1, Article 14 of the draft, which states, “Foreign organisations and individuals acquiring construction works must comply with the Law on Real Estate Business.”
- To promote real estate growth, the VCCI suggested that foreign individuals and organisations be permitted to purchase non-residential building projects, with the exception of areas where security and defence concerns exist – akin to the mechanism implemented for foreign individuals buying houses.
5. Measures suggested to guarantee corporate bond market’s stability
Some highlines are as below:
- Several measures have been suggested at an online seminar held by the government Portal on Sunday to help the corporate bond market maintain its stability and operate in line with law to aid economic growth.
- The government, the prime minister and management agencies have made many important decisions to stabilise the market, ensure its compliance with law, and enhance people’s trust to support the economy.
- Recently, the government issued Decree 65/2022/ND-CP and Decree 08/2023/ND-CP, helping bond issuers and investors to have legal tools and time to settle immediate difficulties in terms of money, liquidity, and collateral, among others basing on the consistent principle of harmonising interests and sharing risks.
- Related to the real estate market, the government has taken many measures to assist bond issuers facing difficulties in the field such as extending debt and tax payment deadlines and reducing lending interest rates. The moves have helped the corporate bond market regain stability, the official went on.
6. Government excludes property, banking sectors from VAT rebate proposal
Some highlines are as below:
- The government has excluded property, banking, securities, insurance, and telecommunications from the list of sectors to be given a 2 percent value-added tax rebate in July-December this year.
- The proposal, if approved by the National Assembly, will reduce the VAT rate from 10 percent to 8%, and seeks to boost the economy whose growth fell to 3.3 percent in the first quarter, the lowest in 12 years.
- The rebate will directly benefit consumers, who will pay 2 percent less for most goods and services.
- Retail and services revenues increased by nearly 20 percent last year and VAT collections rose by 10%, albeit from low bases.