Legal Document Updates in English (08/2012)

APPROVING THE 2011-2015 SOCIO- ECONOMIC DEVELOPMENT PLAN
 

On November 8, 2011, the National Assembly approved the Resolution No. 10/2011/QH13 on the 2011-2015 socio- economic development plan. Accordingly, the process of implementation of the plan should closely follow the objectives, targets, tasks and solutions set by the XI National Party Congress; leadership and direction work should be more focused; appropriate steps should be taken to gradually create potential for achieving the overall objective, targets, three points of breakthrough and 12 orientations of the 2011-2020 socio- economic development strategy.

Some economic targets are set in the Resolution: Gross domestic products (GDP) will increase around 6.5-7% on average in 5 years; Total investment during 5 years 2011-2015 will account for around 33.5-35% of GDP; Trade deficit will be incrementally reduced from 2012 and to below 10% of the export value by 2015. The state budget deficit will be below 4.5% by 2015. The consumer price index will increase around 5-7% by 2015.

For some social target, the National Assembly requested that eight million jobs will be created in 5 years. The rate of trained laborers among total laborers working in the economy will reach 55% by 2015. The population’s actual income by 2015 will be 2-2.5 times over 2010. The average housing area will reach 22 m2 of floor per person by 2015, with the average house floor area per person reaching 26 m2 in urban centers.

In order to achieve these economic and social targets, the Resolution also proposes 09 groups of solutions. Of which, public investments should be restructured on the direction of revising regulations on management decentralization. Restructuring the financial market will focus on restructuring the system of commercial banks and financial institutions. Restructuring state business groups and corporations, raise their business administration capacity, publicity and transparency.

AMENDING THE DETERMINATION OF THE EXCISE TAX CALCULATION PRICE

On December 08, 2011, the Prime Minister issued the Decree No. 113/2011/ND-CP amending and supplementing Point b, Clause 1 of Article 2; Clause 4 of Article 3; Article 4; Article 5 and Clause 1 of Article 7 in the Government’s Decree No. 26/2009/ND-CP of March 16, 2009, detailing a number of articles of the Law on Excise Tax.

Specifically, for domestically produced goods, the excise tax calculation price is determined as follows: excise tax calculation price = (selling price exclusive of value-added tax – Environmental protection tax)/ (1 + excise tax rate). Of which, the selling price exclusive of value-added tax is determined under the law on value-added tax.

In case an excise tax-liable goods producer sells goods via trading establishments, the price serving as a basis for excise tax calculation is the selling price set by that producer, which must not be 10% lower than the average selling price set by such trading establishments. Particularly, the average selling price of cars set by a trading establishment is the selling price excluding equipment and devices which are

further installed by the trading establishment at customers’ request. If the producer’s selling price is 10% lower than the selling price set by trading establishments, the excise tax calculation price shall be assessed by the tax office.

For excise tax-liable goods, the taxed price is inclusive of the tare value. For excise tax-liable processed goods, the taxed price is the selling price set by the processing-ordering establishment or the selling price of products of the same or similar kind at the time of goods sale.

For goods produced in the form of business cooperation between a producer and a user or owner of goods trademarks (brands) or production technologies, the excise tax calculation price is the selling price set by that user or owner.

The Decree shall take effect on February 01, 2012.

 
INCOME FROM SAVINGS INTERESTS INCLUDED IN TAXABLE ITEMS
 

Since March 01, 2012, incomes from savings interests, loan interests or foreign currency sales, including interests on savings deposited at credit institutions, interests on loans in any forms under law, credit guarantee charges and other charges under loan provision contracts are included in taxable income.

This is regulated in the Decree No. 122/2011/ND-CP dated December 27, 2011 amending and supplementing some articles of decree no.124/2008/ND-CP of December 11, 2008 of the government detailing the implementation of some articles of Enterprise Income Tax Law.

As prescribed in this Decree, incomes from foreign currency sales, the exchange rate differences from revaluation of liabilities payable with origin from foreign currencies at the end of the fiscal year (excluding exchange rate differences arising during the basic construction investment process to form fixed assets that such fixed assets have not been included in production, business) are also specified in taxable income items.

Besides these incomes mentioned above, the Decree also regulated that other taxable incomes such as: income from capital transfer; income from the transfer or liquidation of assets (excluding real estate) and other valuable papers; income from the right to own or use assets, including earned copyright royalties in any forms and earned royalties from intellectual property rights; income from technology transfer under law; and asset lease in any forms.

Regarding income from capital transfer where enterprises with capital transfer that do not received in money, but by property and other material benefits (such as shares and fund certificates), which generate income subject to enterprise income tax is also included in taxable income.

These amendments and supplements shall take effect from March 01, 2012 and applies to tax period from 2012 onwards.

 
PILOT OF THE VALUE-ADDED TAX REFUND FOR GOODS BROUGHT ALONG
WHEN EXITING THE BORDER GATES
 

The Government issued the Decision No. 05/2012/QD-TTg dated January 19, 2012 on pilot of the value-added tax refund for goods purchased by foreigners in Vietnam to carry when exiting the border gates of Noi Bai International Airport and Tan Son Nhat International airport.

Goods refunded value added tax under the provisions of this Decision must satisfy the following conditions: being goods subject to value added tax, unused and allowed to bring along on the aircrafts as prescribed by law on security, aviation safety; Being goods not in the list of goods banned from export or list of goods limited for export; Having the invoices together with declarations of tax refund issued within 30 days from the date of departure to their countries; The value of goods recorded in invoice and declaration of tax fund for goods bought at least from two million VND or more.

Business facilities participating in implementation of this Decision must be enterprises established and operating under Vietnam law, trading items refunded as prescribed above; having business locations in

the Hanoi city, Ho Chi Minh City or in the center of handicraft villages in the destinations of the travel routes; Besides, these enterprises must perform the regimes of accounting, invoices, vouchers as prescribed by law; declaring and paying value added tax by the deduction method.

When being tax refunded, individuals have to pay fee for service of tax refund as regulated by the Ministry of Finance. However, it shall not exceed 15% on the total amount of value added tax required to refund collected by commercial banks selected as agents for spending the costs of the service for tax refund.

This Decision takes effect as from July 01, 2012. Pilot period of value added tax refund under the provisions of this Decision will last for two years (from July 01, 2012 to the end of June 30, 2014).

TO 2020, THE FIRST PRIORITY FOR INVESTMENT TO CLARIFY
THE POTENTIAL MINERAL RESOURCES
 

The Prime Minister issued the Decision No. 2427/QD-TTg dated December 22, 2011 approving mineral resources strategy to 2020, with a vision toward 2030. As stated in the Decision, the first priority for this period is for investment in basic survey of geological minerals both land and sea and islands in order to clarify the potential mineral resources; exploration and exploitation of minerals associated with processing and efficient use.

The objective of the strategy is to complete mapping the geology and mineral survey, rate of 1/50,000 per land area; to complete the geological, sea mineral survey, rate of 1/500,000; and assess to clarify the potential mineral resources for exploitation and the national reserve.

Besides, the objective of the strategy is to explore to meet the needs of mining and processing to 2050

for the minerals: coal, uranium, titanium - zircon, rare earths, apatite, iron, lead - zinc, copper, tin, manganese, chromites, bauxite, glass sand and some other minerals.

The Prime Minister also directed that exploration and mining must be associated with processing and creating products of high economic value. Products are only exported after processing of high value for the large-scale mineral. The remaining minerals shall be exploited and processed according to domestic demand to strengthen national mineral resource reserves for use as a basis for sustainable social - economic development.

The Decision shall take effect from the date of signing.

IMMEDIATELY RECEIVING HEALTH INSURANCE BENEFITS
 WHEN MEETING WITH TRAFFIC ACCIDENTS
 

When there are not sufficient evidences to determine whether or not a traffic accident occurred due to the accident victim’s violation of traffic rules, the accident victim who is a health insurance participant will be eligible for health insurance benefits according to regulations when receiving medical care.

This is the content regulated in the Joint Circular No. 39/2011/TTLT-BYT-BTC of November 11, 2011, guiding the procedures for payment of medical examination and treatment expenses for health insurance participants meeting with traffic accidents.

As regulated in the Joint Circular, when there are sufficient grounds to determine that a traffic accident occurred due to the accident victim’s violation of traffic rules or a traffic accident victim falls outside the

payment coverage of the health insurance fund, such accident victim will be ineligible for health insurance benefits and must fully refund medical examination and treatment expenses to the health insurance fund.

However, for children aged under 14 and elderly persons aged 80 or older, they are eligible for health insurance-covered medical care according to regulations without having to go through the procedures for determining violations of traffic rules as prescribed.

This Circular shall take effect on December 26, 2011 and annul Clause 3, Article 8 of the Joint Circular No. 09/2009/TTLT-BYTBTC of August 14, 2009.