Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you.
- Insurance-related violators to face heftier fines
- Land rental fees cut by 30% for 2023
- Vietnam to apply regulatory sandbox for development of circular economy
- Vietnam seeks to remove stagnancy in VAT refund
- SMEs can borrow loans at preferential interest rate of 1.2 percent per year
Find more details as below:
1. Insurance-related violators to face heftier fines
Some highlines are as below:
- The Ministry of Finance (MOF) has recently proposed raising fine levels for a lot of violations insurance-related violations.
- Such is provided in a draft decree revising the decrees concerning the sanctioning of administrative violations in the field of insurance business and lottery business, including Decree 98 of 2013, Decree 48 of 2018, Decree No. 80 of 2019, and Decree 102 of 2021.
- Specifically, the fine level for violations of life insurance and health insurance regulations would increase to VND 90-100 million (USD 3,702-4,113) from the current level of VND 40-50 million and there would be three cases in which insurers would be imposed a fine level of VND 90-100 million.
- The fine level of VND 90-100 million would also apply to insurance businesses, foreign non-life insurance businesses’ branches and mutual organizations providing microinsurance that pay commission, bonus and support or provide other interests to insurance agents in excess of the maximum levels set by the MOF.
- Noteworthily, the draft proposes a fine of VND 180-200 million (USD 7,404-8,227) for acts of providing transboundary insurance services in Vietnam when failing to fully meet law-prescribed conditions or not having head offices in countries or territories which have signed with Vietnam commercial treaties containing agreements on provision of transboundary insurance services in Vietnam.
2. Land rental fees cut by 30% for 2023
Some highlines are as below:
- Deputy Prime Minister Le Minh Khai has recently signed a Prime Minister decision regarding the reduction of land rental fees for 2023.
- The beneficiary entities include organisations, units, businesses, households, and individuals who are directly leased land by the state according to decisions, contracts or certificates of land use rights and of ownership rights to residential houses and other assets attached to land.
- This decision applies to cases where the lessees do not fall under the exempted or reduced rental fee categories, those whose exemptions or reductions have expired, and those currently receiving reductions in rental fees following the Land Law and other relevant laws.
- The new reduction levels are calculated based on the rental fees payable for the year as stipulated by the law. The decision will come into effect on November 20.
3. Vietnam to apply regulatory sandbox for development of circular economy
Some highlines are as below:
- A regulatory sandbox for development of circular economy would be soon adopted for application in four potential fields, namely agriculture, forestry and aquaculture; industry; energy; and construction materials.
- The sandbox, introduced under a draft decree formulated by the Ministry of Planning and Investment (MPI), includes six groups of policies concerning green classification; industrial parks and economic zones; technology consultancy and technology transfer; green credit and green bond; land; and human resource development.
- The State and local administrations would provide technology recommendation and consultancy to circular economy projects. These projects would also be entitled to a financial support equaling half of the expenses for hiring technology consultants. Projects involving technology transfer would be exempt from import duty and given with priority in customs clearance. Meanwhile, businesses that hire or purchase digital transformation solutions to implement circular economy projects would receive a support of up to 50 percent of expenses therefor.
- The duration of participation in the regulatory sandbox would be five years, counted from the date of issuance of a certificate of participation, and might be extended once for another five years.
4. Vietnam seeks to remove stagnancy in VAT refund
Some highlines are as below:
- Property auction organizations, property auction councils and wholly state-owned organizations established by the Government to settle non-performing loans of credit institutions may use their online auction websites or hire others to organize online auctions.
- Under Decree 47 issued by the Government on July 3, which replaces Decree 62 of 2017, online auction websites, which may be the National Online Auction Website and online auction websites of wholly state-owned organizations established by the Government to deal with non-performing loans of credit institutions and property auction organizations, must be set up and operate in accordance with the laws on information and communications, and e-commerce.
- Property auction organizations will assign auctioneers, property auction councils and wholly state-owned organizations established by the Government to deal with non-performing loans of credit institutions to administer auctions on the websites.
- In case of an ascending-price auction, the auction winner is the one with the highest bid recorded by the auction network. In case of a descending-price auction, the auction winner is the first to accept the reserve price or the reduced price recorded by the auction network.
- An auction winner will be announced on the online auction network right after the auction ends.
5. SMEs can borrow loans at preferential interest rate of 1.2 percent per year
Some highlines are as below:
- Notwithstanding the constant supervision and direction of the National Assembly and the Government, the problem of delayed VAT refunds has not yet been improved.
- According to the 2022 audit results reported by the State Audit, in some localities, the inspection and verification of VAT refund applications of export enterprises remains stagnant.
- To be more specific, Official Dispatch 1873 dated June 1, 2022 requires verification of invoices and the origin of goods to the final stage in the case of complicated invoices. It also involves checking the actual warehouse and delivery information of each shipment.
- Similarly, in Official Dispatch 194 dated January 18, 2022, businesses asking for VAT refund on the export of rubber, cassava chips, and agricultural products must carry out the whole process of verification to the final stage of afforestation, with accurate inspection results from intermediary businesses. At the same time, the report verifies whether transportation, loading, gasoline, and road fees are consistent with the transportation route, documents, and goods volumes of each batch.
- According to the tax industry, the above instructions were issued out of caution, given the many tax violations detected in recent times. For example, in 2022 and early 2023, the dossiers of 9 businesses requesting VAT refunds on wood and products made from wood, wood chips, and wood pellets have been transferred to public security agencies to coordinate investigation and verification as these enterprises showed signs of using false invoices.