Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you.
- Promulgating a Decree for the detailed regulations on a number of articles of the Petroleum Law.
- Efforts to simplify business regulations must be enhanced: Government.
- New decree sets environmental protection fees for mineral exploitation.
- National Assembly to review global minimum tax in October.
- Ministry reduces import taxes on gasoline and oil.
Find more details as below:
1. Promulgating a Decree for the detailed regulations on a number of articles of the Petroleum Law
Some highlines are as below:
- On July 01, 2023, the Government promulgated Decree 45/2023/ND-CP for the detailed regulations on a number of articles of the Petroleum Law, including regulations on safety in the design, manufacture, construction and operation of petroleum projects.
- The design, manufacture, construction, trial running and checking before acceptance of oil and gas projects must be inspected and certified by competent authorities in accordance with the laws, ensuring conformity with the technical regulations, standards announced for applying, complying with the provisions of Vietnamese laws and international treaties to which Vietnam is a member.
- The oil and gas projects can only be put into operation after the results of inspection, verifying and project testing and safety contents for meeting the set requirements.
- The oil and gas projects must be operated, maintained, inspected and repaired in accordance with regulations suitable to approved processes, technical regulations and standards. The Contractor must immediately stop activities if such activities can cause danger to people, the environment and the oil and gas projects that cannot be controlled.
- The Contractor must establish and maintain an emergency response system to effectively conduct rescue operations when breakdown faults or accidents cause harm to people, the environment, or property. Depending on the severity of the breakdown fault or accident, the contractor must notify the competent authority according to regulations.
2. Efforts to simplify business regulations must be enhanced: Government
Some highlines are as below:
- The government Office said that efforts must be enhanced to further simplify business regulations and create a favourable environment for enterprises.
- Although the government’s Resolution No. 68/NQ-CP dated May 12, 2020, about the programme to reduce and simplify business regulations in the 2020-2025 period had been in effect for three years, which targeted to simplify at least 20 percent of the business regulations, some ministries had not submitted their simplification plan to the government.
- The Ministry of Justice said that during the past two years, the ministry focused on reviewing administrative procedures for simplification. From 2021-22, the ministry slashed 43 regulations.
- Statistics of the Administrative Procedures Control Agency showed that in the first six months of this year, 92 regulations residing in eight legal documents were simplified or reduced, bringing the total number of regulations which were simplified or reduced from 2021 to date to 2,234 in 179 legal documents.
- As of June 20, the existing regulations updated on the portal about business regulations at the address https://thamvanquydinh.gov.vn total 17,845 regulations.
3. New decree sets environmental protection fees for mineral exploitation
Some highlines are as below:
- The government recently issued Decree 27/2023/ND-CP regulating environmental protection fees for mineral exploitation.
- The document, issued on May 31, regulates those subject to the fees, fee payers, fee collectors, the cases entitled to exemption, and fee levels, among others.
- Accordingly, environmental protection fees are imposed on the exploitation of crude oil, natural gas, and coal gas; and metallic and non-metallic minerals stipulated in the fee table accompanying the decree. The fee collector is tax agencies.
- Environmental protection fees are set at 100,000 VND (4.25 USD) per tons for crude oil, 50 VND per cubic meter for natural gas and coal gas, and 35 VND per cubic meter for the natural gas collected during the crude oil exploitation process (associated gas).
- The fees on the exploitation of metallic and non-metallic minerals, including production and business activities that are not aimed at exploiting minerals but still collect minerals, are shown in the accompanying table.
- Decree 27/2023/ND-CP, replacing Decree 164/2016/ND-CP, will take effect on July 15.
4. National Assembly to review global minimum tax in October
Some highlines are as below:
- The government plans to seek National Assembly approval for the global minimum tax, a tariff that might affect foreign investors in the country, in October.
- The tax aims to reallocate taxing rights on about US$200 billion worth of profits from the companies to the countries where they do business and to end the “race to the bottom” on tax rates, which refer to the incentives that countries compete to give multinationals to attract their investment.
- The 15% tax will apply to multinational firms with revenues of at least €750 million (US$800 million) in at least two of the four most recent years.
- Certain economies like the UK, Japan, South Korea, and the EU are expected to apply the tax from next year.
- According to the Finance Ministry, 1,015 foreign-invested enterprises in Vietnam will be subject to the rate. Over 70 businesses in Vietnam are likely to be affected if it is applied in 2024.
5. Ministry reduces import taxes on gasoline and oil
Some highlines are as below:
- The Ministry of Finance (MoF) has just announced the reduction of the gasoline import tax to 5.62% while increasing the standard cost of the gasoline base price by 30 VND per litre.
- The MoF said that the average import tax rate for gasoline products has been lowered to 5.62%, while the average import tax on diesel and mazut oil is down to 0.58% and 1.38%, respectively. No adjustment was made to paraffin.
- Due to the low sales of paraffin, the MoF asked the MoIT to review and calculate the paraffin price on the market and to announce the base price according to regulations.
- Some of the standard costs in the gasoline base price have been changed. Specifically, business expenses in the base price of mazut oil decreased by VND184 to VND360 per kg, while unleaded gasoline and diesel oil increased by VND30 each to VND1,080 and VND1,030 per litre, respectively.