Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you. Dr. Oliver Massmann is an International Attorney at Law and a Financial Accountant and Auditor, with over 20 years of experience working as a commercial lawyer in Vietnam.
Dr. Massmann is volunteering as a legal advisor for the GBA from the beginning of the association. Our regards and thank you!
- Revamped decree increasing IZ and EZ potential
- New tax put forth to restrain speculation
- Almost no change under new trading regulations at HoSE
- Open policies proposed to lure foreign investment
- Vietnam to tighten control over social media live streaming
- Vietnam, EU review bilateral trade deal implementation
- Vietnam defers e-commerce tax by five months
- Ministry orders intensifying handling of fake news on COVID-19
Revamped decree increasing IZ and EZ potential
- A replacement for Decree No.82/2018/ND-CP on the management of industrial and economic zones is being drafted by the Ministry of Planning and Investment.
- As of the end of April, 575 industrial zones (IZs) in the master plan of the country were approved by the prime minister with the total area of 219,500 hectares; 18 coastal economic zones (EZs) across 17 cities and provinces at 853,000ha; and 26 border EZs have also been set in the master plan.
- The draft has added some new provisions to fit with laws such as those on investment and environmental protection and other legal documents, as well as resolves practical issues related to IZs and EZs .
- The new draft has also added some provisions to be accordant with new laws and real practices, including the area of IZs having to be at least 75ha, leaving 5 per cent at least for small- and medium-sized enterprises, supporting and innovating businesses, and other priorities. It does not apply the 60 per cent occupation requirement for IZs in a province to supplement the planning of a new IZ in several cases, for example if the total natural area of all IZs of a locality is under 1,000ha;
- It also provides some new incentives for projects on the list of industries eligible for special investment incentives in EZs, or EZs applying special incentives for projects in industrial areas. It has added some provisions on IZs specialising in manufacturing and providing services for production in a single industry. New measures of mobilising investment into developing infrastructure are clear in it.
2. New tax put forth to restrain speculation
- Hanoi Tax Department this month proposed to subject a 5 per cent tax on the contract value for villas that have been abandoned for at least three months and a 10 per cent tax for those abandoned for one year or more.
- It also proposed fining investors to VND10-20 million ($430-870) per villa and imposing a progressive tax system has been suggested for those households that buy more than one property.
- The Ministry of Finance issued Circular No.40/2021/TT-BTC earlier this month, providing guidelines on VAT, personal income tax (PIT), and tax administration for business households and individuals.
- Taking effect from August 1, Circular 40 stipulates that leasing certain properties shall be applied a tax rate of 10 per cent at most, including VAT and PIT at 5 per cent each. This tax is imposed for owners with revenues from VND100 million ($4,300) per year at least, and the tax is applied for lease terms of below 12 months.
3. Almost no change under new trading regulations at HoSE
- The Ho Chi Minh Stock Exchange (HOSE)’s Decision 352/QD-SGDHCM on securities trading regulations at HOSE officially took effect from Monday. Under the new decision, HOSE adopted almost no changes to trading regulations on HOSE.
- The only adjustment under the new regulation is that it further stipulates the correction and cancellation of orders for order matching transactions. In case of necessity, HOSE has the right to request a member securities company to suspend the correction or cancellation of orders after being approved by the State Securities Commission.
- From Monday, HoSE put the new transaction system provided by FPT Corporation into official operation.
- Therefore, banks are making moves to adjust room for foreign investors, waiting for opportunities after the epidemic to attract more capital to meet international standards.
- The new system is expected to handle 3-5 million orders per day.
4. Open policies proposed to lure foreign investment
- The MPI proposes not requiring an IP to satisfy the condition of 60-percent occupancy rate if the total land area of the IP in a province or city is below 1,000 hectares.
- The 60-percent occupancy rate would not also be applied to an IP in cases.
- The draft requires IP infrastructure investors to make re-registration of land lease rate framework with IP management boards if IP land lease rates increase by over 30 percent compared to the registered land lease rate framework.
- An IP’s land area must be conformable to investment attraction ability of the province or centrally run city where it is located but must be at least 75 hectares. At least five percent of total industrial land area of an IP must be reserved for lease or sublease to small- and medium-sized enterprises, supporting industry enterprises, start-ups and other businesses.
- Incentives would be offered to investment projects on the list of sectors and trades eligible for special investment incentives in EZs.
- The draft decision on special investment incentives proposes three levels of incentives for new and expanded investment projects that apply high technologies, make high added-value products, have pervasive impacts or are capable of connecting the global production and supply chain
5. Vietnam to tighten control over social media livestreaming
- A draft decree says, Cross-border social media must demand operators of accounts with 10,000 or more followers/subscribers in Vietnam to provide contact information to the ministry. It also requires websites and apps with 100,000 or more monthly frequent users to register with the ministry. Only registered accounts can host livestream videos to sell goods and services.
- The social media platforms will also be asked to block or remove flagged content within 24 hours upon “justified” requests by Vietnamese individuals and organizations affected by such content.
- The top 10 Vietnamese social media platforms is estimated to have a total of around 80 million users by the end of June but the popularity of these platforms is low compared to foreign competitors like Facebook, Youtube, TikTok. These platforms have not fully abided by Vietnamese laws, A lot of the content is fake news, causing instability and frustration in the society and inequality between domestic and foreign companies.
- Many individuals and organizations use these platforms to livestream and provide incorrect and offensive information about individuals and organizations, the ministry said.
- Vietnam, EU review bilateral trade deal implementation
- The meeting aimed to review the implementation of the deal and discuss issues related to trade and investment in both bilateral and multilateral frameworks.
6. Participants adopted Decision No. 01 of the committee on its operation mechanism.
- Both sides agreed to coordinate closely to speed up the implementation of the deal and cope with matters that may pose negative impacts on the operation of businesses of both sides, thus maintaining and developing the supply chain amid COVID-19 pandemic.
- The two sides also mentioned a number of multilateral issues such as the reform of the World Trade Organisation (WTO) and the preparation for the 12th WTO ministerial Conference, which is scheduled to take place from November 30 to December 1 in Switzerland.
- The EVFTA became effective on August 1, 2020. After nearly one year of implementation, the two sides have enjoyed positive growth in bilateral trade. Their import-export value hit 27.67 billion USD in the first six months of 2021, up 18.4 percent over the same period last year.
7. Vietnam defers e-commerce tax by five months
- The Ministry of Finance has proposed to the government that the implementation of Circular 40 be postponed until January 1, 2022.
- The circular imposes a 1.5 percent tax on e-commerce vendors with annual revenues of VND100 million ($4,354) or higher. E-commerce platforms are responsible for collecting this tax from vendors and paying it to the finance ministry.
- An average of 3.5 million transactions are made on e-commerce platforms each day in Vietnam, and the transaction value has been increasing steadily, according to official data.
- However, e-commerce platforms have proposed that they aren’t made responsible for paying tax on vendors’ behalf as it will create excessive costs and personnel burdens.
- Vietnam’s e-commerce market expanded by 18 percent last year to $11.8 billion.
8. Ministry orders intensifying handling of fake news on COVID-19
- Misleading claims about the efficacy of COVID-19 vaccines and untrue information distorting the Vietnamese Government’s vaccine distribution policy and the use of the COVID-19 vaccine fund have also been spread on the social media.
- The MIC requests ministries, ministry-level agencies, Government agencies, and People’s Committees of cities and provinces to seriously observe regulations on providing information for the press, ensuring that information must be provided as soon as possible in any circumstances.
- In cases of unexpected incidents in ministries, agencies and localities, the press should be provided update information no later than two hours from the time the incident occurs. When detecting fake news and misinformation, ministries, agencies and localities need to instruct police and other relevant forces to quickly check the information, track its source and handle people involved in the dissemination.
- Municipal and provincial Departments of Information and Communications are required to strictly handle press agencies, information websites and social networks that publish and spread fake news and misinformation about the pandemic’s developments and anti-pandemic work in localities.