Legal Document Updates in English (13/2011)

DOMESTIC ADOPTION REGISTRATION FEE IS VND 400.000 PER CASE
 

On March 21/, 2011, the Government issued the Decree No. 19/2011/ND-CP providing in detail for implementation of a number of articles of the law on adoption. Accordingly, the domestic adoption registration fee is 400.000 dong per case; Inter-country adoption registration fee is nine million dong (9.000.000 dong)/case; Adoption registration fee at the representative agencies is three million dong (3.000.000 dong)/case.

Exempting domestic adoption registration fee for the case stepfather or stepmother adopts their stepchild; natural aunt, uncle, child’s father’s elder brothers adopt their nephews, nieces; adopt children as provided in clause 1 Article 3 of this Decree and adoption in the remote areas.
In particular, Reducing 50% of rate of Inter-country adoption registration fee for the case that stepfather or stepmother adopts their stepchild; natural aunt, uncle, child’s father’s elder brothers adopt their nephews, nieces. If adopting two and above children are siblings, shall be reduced 50% of rate of Inter-country adoption registration fee from the second child.

The Decree also accepts the caste that adoption arose in reality between Vietnamese citizens but have not yet registered before the date of first of January, 2011, if it meets conditions referred to clause 1 Article 50 of Law on Adoption, shall be registered from January 01, 2011 to December 31, 2015 at the Commune-level People’s Committees in which adoptive parents and adopted child permanently residing.

As per competence for adoption registration, the Decree regulates in details that For domestic adoption, the People’s Committees of Commune, Ward, Township (hereinafter called as The Commune-level People’s Committees) of place in which adoptee permanently residing are competent to register adoption; Regarding inter-country adoption, the People’s Committees of centrally-affiliated Provinces, Cities (hereinafter called the Provincial-level People’s Committees), in which the adopted persons are permanently residing shall decide to let such person to be adoptee;

In case stepfathers or stepmothers allow their wife or husband’s step-children to be their adoptees; natural aunts, uncles allow their nephews, nieces to be their adoptees or having an agreement between adopting person and natural parents or guardian of children allowed to be adoptees, the Commune-level People’s Committees of place in which adopting persons permanently residing are competent to register adoption.

GOVERNMENT AMENDS THE AUDITOR’S STANDARDS
 

On February 22, 2011, the Government issued the Decree No. 16/2011/ND-CP on amending and supplementing the Government’s Decree No 105/2004/ND-CP dated March 30, 2004, of independent auditor.

Independent audit means the inspection and certification by auditors and auditing enterprises of truthfulness and rationality of accounting documents and data and financial statements of enterprises and organizations (hereinafter referred collectively to as audited units) when so requested by such units.

Under this Decree’s regulation, auditors are required to have bachelor or higher degrees in Economic-Finance-Bank or Accounting-Auditing instead of having bachelor degrees in economics- finance-banking or accounting-auditing as before. 

Besides, auditors have to have financial or accounting actual working time for at least 5 years or longer or actual time of working as auditor assistants in auditing enterprises for at least 4 years or longer, counted from the year of bachelor degree issuing to the year of exam registration (Decree 105/2004/ND-CP does not regulate clearly the beginning time to calculate auditor’s actual working time). Other standards for auditors are remained no changes as in the Decree No. 105/2004/ND-CP.

These amends and supplement take effect from April 20, 2011.

DEPOSIT INTERESTS’ TAX ARE EXEMPTED FROM PERSONAL INCOME TAX
 

On January 26, 2011, the Ministry of Finance issued the Circular No. 12/2011/TT-BTC amending the Ministry of Finance’s Circular No. 84/2008/TT-BTC of September 30, 2008, guiding a number of articles of the Law on Personal Income Tax, and amending the Ministry of Finance’s Circular No. 02/2010/TT-BTC of January 11, 2010, additionally guiding the Ministry of Finance’s Circular No. 84/2008/TT-BTC of September 30, 2008.

According to the Circular’s regulations, tax-exempt deposit interests under this Point are interests received by individuals from their deposits at banks or credit institutions in the forms of demand deposit, time deposit, saving, deposit certificate, promissory note, bill and other forms of deposit on the principle of full repayment of principal and interest to depositors as agreed upon. All cases of receipt of deposit interests not from credit institutions established and operating under the Law on Credit Institutions are not tax-exempt.
Bases for determining tax-exempt incomes for the above interests are as follows: savings books (or savings cards), deposit certificates, promissory notes, bills and other papers on the principle of full repayment of principal and interest to depositors as agreed upon, for incomes from deposit interests; vouchers of payment of interests from life insurance policies, for incomes from these interests.
As in the Decree, individuals who have already had houses or residential land who transfer contracts on the purchase and sale of houses to be formed in future are

exempted from tax. Incomes from such transfer are ineligible for personal income tax exemption.
A tax declaration dossier comprises: notarized contract on the purchase and sale of houses to be formed in future. For second and subsequent transfers, the involved parties shall produce the previous contract; contract on the purchase and sale of houses to be formed in future signed with the tier-I or -II project owner or the project owner’s trading floor; completed personal income tax declaration form No. 11/KK-TNCN (issued together with the Ministry of Finance’s Circular No. 62/2009/TT-BTC of March 27, 2009). To fill in Box 04 on the declaration form the contract on the purchase and sale of houses to be formed in future in replacement of the land use rights and house ownership certificate.

For households and individuals transferring contracts on the purchase and sale of houses to be formed in future,  if the transfer price written in the contract on the transfer of the contract on the purchase and sale of houses to be formed in future and the tax declaration form does not accord with the market price, tax agencies shall fix a transfer price for tax calculation after referring to (according to working minutes) the prices at the real estate trading floors of the project owners or those based in the locality in which exists the transferred real estate.

APPLY 0% VAT FOR INSURANCE SERVICE FOR FOREIGNERS
 

On January 21, 2011, the Ministry of Finance issued the Circular No. 09/2011/TT-BTC guiding value-added tax and enterprise income tax on insurance business

VAT-liable objects include Non-life insurance and non-life insurance consultancy and brokerage services; assessment, indemnity examination and third party’s refund-claiming agency services; other goods and services liable to VAT under the VAT law which arise during the operation process of companies engaged in insurance activities.

The VAT calculation price is the VAT-exclusive original insurance premium, covering also surcharges and additional charges in addition to the service charges which an insurance enterprise is entitled to enjoy, excluding surcharges and compulsory appropriations it has to remit into the state budget.

For assessment, indemnity examination and third party’s refund-claiming agents and agents handling goods eligible for 100% indemnity for remuneration or commission, the VAT calculation price is the VAT-exclusive remuneration or commission amount (not yet deducted to pay any expenses) collected by the concerned insurance enterprise; for insurance brokerage enterprises, the VAT calculation price is the VAT-exclusive insurance brokerage commission amount minus the reduced amount of insurance brokerage commission (if any).

The tax rate of 0% applies to insurance services, including insurance services, insurance brokerage services and assessment, indemnity examination, third party’s refund-claiming and 100% indemnity-eligible goods handling agency services, provided to enterprises located in non-tariff zones or overseas organizations and individuals. The tax rate of 10% applies to other insurance business activities under tax-liable objects.

Some expenses of insurance enterprises which are allowed to be deducted are specified as follows: expenses for payment of indemnities under original insurance policies (original insurance indemnities, for non-life insurance, or payment of insurance money, for life insurance; expenses for original insurance indemnities of life insurance enterprises must be paid in conformity with insurance scope and insurance conditions; reinsurance ceding charges; appropriations for setting up professional provisions under the insurance business law; expenses for payment of insurance and insurance brokerage commissions and so on.

ALLOW TO BORROW FOREIGN CURRENCY FOR IMPORT GOODS AND SERVICES PAYMENT
 

On March 24, 2011, the State Bank of Vietnam issued the Circular No. 07/2011/TT-NHNN providing on foreign currency loans of the credit institutions with customers being residents.

Accordingly, the credit institutions licensed to operate in foreign exchange shall consider deciding of foreign currency loans with customers being residents for the following funds demands: the short-term, mid-term and long-term foreign currency loans in order to overseas paying for imported goods and services in foreign exchange on condition that customers have sufficient in order to paying of debt rely on the income source from production and business, buying of the loan credit institution or other credit institution undertaken in writing; the short-term foreign currency loans in order to implement production and business plan of goods exporting through the border gate, frontier of Vietnam on condition that customers

have adequate foreign exchange in order to paying of the debt rely on the income source of exporting; the loans for other foreign exchange capital demands have to take the approving in writing of the State Bank’s governor.
The credit institutions loan in foreign currency according to provisions in this Circular, law provisions on loans, foreign exchange management, safety ensuring rate in credit institutions’ business activities and other relative regulations of laws.

The limit time for sending the reports: Monthly, latest on the 10th of the next month of the report month.