Legal Document Updates in English (11/2012)

DOSSIERS SHALL BE SUBMITTED ELECTRONICALLY
 

The Government issued the Decree No. 119/2011/ND-CP of December 16, 2011, amending and supplementing administrative procedures provided in the Government’s Decree No. 116/2005/ND-CP of September 15, 2005, detailing the implementation of a number of articles of the Law on Competition.

Under the Decree, dossiers for notification of economic concentration of enterprises joining the economic concentration shall be submitted directly or electronically in the form of copies (copies scanned from the originals or text files) bearing lawful e-signatures of lawful representatives of the enterprises.

The competition-managing agency’s written replies to economic concentration notifications must be

addressed to the following subjects: the business registration agency and other agencies competent to permit merger, consolidation, acquisition or joint venture under law; Lawful representatives of the parties to economic concentration; Parties to economic concentration.

In the course of evaluation of explanatory reports on the satisfaction of conditions for exemption, competition-managing agencies may consult science and technology institutions and research and development institutions.

These amendments and supplements take effect on February 1, 2012.

DOMESTIC COMMERCIAL FRANCHISING IS NOT REQUIRED REGISTRATION
 OF COMMERCIAL FRANCHISING

On December 16, 2011, the Government issued the Decree No. 120/2011/ND-CP amending and supplementing administrative procedures provided in a number of decrees detailing the Commercial Law.

The Decree amended 02 cases in which registration of commercial franchising is not required and must be reported to provincial-level Industry and Trade Departments include: Domestic commercial franchising; Vietnam-to-overseas commercial franchising.

The Decree also supplemented some regulations on copies of documents. Accordingly, copies of

documents in dossiers of application for grant or re-grant of representative office or branch establishment licenses means certified copies (for dossiers sent by post or through the official correspondence channel); photocopies enclosed with the originals for comparison (for directly submitted dossiers); Copies scanned from the originals (if administrative procedures allow dossiers to be submitted electronically).

These amendments and supplements shall take effect on February 1, 2012.

 
AMENDING SOME CASES NOT REQUIRED FOR DECLARATION
 AND PAYMENT OF VALUE-ADDED TAX
 

On December 27th, 2012 the Prime Minister issued the Decree No. 121/2011/ND-CP amending and supplementing a number of articles of the Government’s Decree No. 123/2008/ND-CP of December 8, 2008, detailing and guiding a number of articles of the Law on Value-Added Tax.

Accordingly, following cases are not required for declaration and payment of value-added tax including: goods and services provided outside Vietnam by Vietnam-based taxpayers, except international transportation with overseas places of departure and arrival; Revenues from compensation, bonus, support, transfer of the emission right and other financial revenues; Vietnam-based production and business organizations and individuals that purchase such services from foreign organizations without permanent establishments in Vietnam or overseas individuals not residing in Vietnam.

Besides, non-business organizations and individuals that are not value-added tax payers are not required to declare and calculate value-added tax when selling their assets, including assets they are using to secure loans at banks or credit institutions.

In addition to 12 cases not subject to tax mentioned in the Decree No. 123/2008/NĐ-CP, the Government also amended some cases not subject to tax such as: public services on sanitation, water drainage in streets and residential quarters; maintenance of zoos, flower gardens, parks, street greeneries and public lighting; funeral services…

This Decree takes effect on March 1, 2012.

 
THE TARGET TO 2012, TO BUILD AND DEVELOP A SAFE
AND SUSTAINABLE MICROFINANCE INSTITUTION SYSTEM
 

On December 06, 2011 the Prime Minister issued the Decision No. 2195/QD-TTg of December 6, 2011, approving the Scheme on building and development of a microfinance system in Vietnam through 2020.

The objective of the scheme is to build and develop a safe and sustainable microfinance institution system targeted at the poor, low-income earners, and micro and small-sized enterprises, contributing to the exercise of the Party's and the State's undertaking on social security assurance and sustainable poverty reduction.

In order to achieve these above objectives, the Prime Minister required that all ministries, sectors and localities should implement 5 solutions, of which formulate the legal environment suitable to the

characteristics of microfinance activities such as improving legal documents guiding the implementation of the Law on Credit Institutions; promulgating appropriate policies to encourage microfinance development; adopting appropriate tax and charge policies to support microfinance development.

Besides, the Prime Minister also required raising the policy making and management capacity of State management agencies; disseminating and raising awareness about microfinance; creating the condition of capital sources for microfinance...

This Decision shall take effect on the date of its signing.

CREDIT INSTITUTIONS EXCEED THE PROVIDED LEVEL
SHALL APPLY A REQUIRED RESERVE RATIO THAT IS TWICE
 

Credit institutions are required to closely follow targets and duties in 2012 and to seriously control the credit growth rate in the whole year of 2012 in line with the maximum credit growth rate provided for by the State Bank of Vietnam; controlling the proportion of outstanding loans to discouraged areas to be at 16% at the maximum as against the total outstanding loans in the whole year of 2012; to control credit growth rate in foreign currency in correspondence with the ability of capital mobilization and the guideline on polarization restriction in the economy.

In the event where the credit institution gains its credit growth rate and/or proportion of outstanding loan to discouraged areas exceed the provided level, the State Bank of Vietnam shall apply a required reserve ratio that is twice (02) as the required reserve ratio applicable to VND deposits and other measures for restricting the business scope.

These are some requirements of the Governor of the State Bank, Nguyen Van Binh, to credit institutions i

n the Directive No. 01/CT-NHNN dated February 13, 2012 on organizing the implementation of monetary policies and ensuring the banking activity to be safe and efficient in 2012.

The target of the Directive is to organize the implementation of monetary policies on a tight, careful and flexible manner, harmoniously coordinating with fiscal policies to stabilize the monetary market, ensuring the liquidity of credit institutions; to control growth rate of total means of payment at about 14-16% and of credit at about 15-17%; to lower the interest rate surface…

Under this Directive, the Governor of State Bank also required the credit institutions to restructure their liabilities and assets, to raise their financial and management capacity; to complete their organizational model, improving the quality of the internal inspection and audit, completing regulatory documents on operation so as to ensure the prudential, efficient operation and sustainable development.

TO REDUCE 30% OF 30% OF PAYABLE ENTERPRISE INCOME TAX AMOUNTS
IN 2011 FOR SMALL AND MEDIUM SIZED ENTERPRISES
 

The Ministry of Finance issued the Circular No. 154/2011/TT-BTC of November 11, 2011, guiding the Government’s Decree No. 101/2011/ND-CP of November 4, 2011, detailing the National Assembly’s Resolution No. 08/2011/QH13, additionally providing a number of tax-related solutions for enterprises and individuals to overcome their difficulties.

As regulated in the Circular, small- and medium-sized enterprises, labor-intensive enterprises engaged in production, sub-contract production and processing of From August 1 through December 31, 2011, business individuals and households having taxed incomes from salaries, wages or business activities which reach the tax agricultural, forest and aquatic products, textile and garment, leather footwear and electronic parts; and in construction of socioeconomic infrastructure works will be reduced 30% of payable enterprise income tax amounts in 2011.

An enterprise shall separately account incomes from production and business activities eligible, from those ineligible, for enterprise income tax reduction. If it is impossible to separately account incomes

from activities eligible for tax reduction, incomes used for calculating to-be-reduced tax amounts shall be determined according to the percentage of revenues from tax reduction-eligible activities to the enterprise’s total revenues in 2011.

Under the Circular, households and individuals leasing houses or rooms to workers, student or pupils; and households and individuals supplying shift meals to workers will be reduced 50% of the presumptive value-added tax from July 1 through December 31, 2012.

From August 1 through December 31, 2011, business individuals and households having taxed incomes from salaries, wages or business activities which reach the tax threshold at grade 1 in the Partially Progressive Tariff shall be exempted personal income tax.

This Circular takes effect on December 26, 2011, and shall be implemented under the National Assembly’s Resolution No. 08/2011/QH13.