Legal Document Updates in English (13/2021)

EXPENDITURES FOR SUPPORTING THE COVID-19 PREVENTION
ARE NOT SUBJECT TO ENTERPRISE INCOME TAX

On March 31, 2021, the Government promulgates the Decree No. 44/2021/ND-CP providing guidance on deductible expenses for determining taxable income of enterprises’ and organizations’ expenditures for supporting and financing the Covid-19 pandemic prevention and control.

Specifically, enterprises may account expenses for supporting and financing the Covid-19 pandemic prevention and control in Vietnam in kind or cash through units receiving supports and sponsorships (including Vietnam Fatherland Front Committees at all levels; health establishments; armed forces; Covid-19 Response Funds,

etc.), as deductible expenses for determination of taxable income.

Dossiers to identify such funding comprise: Written records of supporting or financing certification made according to the form as prescribed, or paper documents or electronic documents of funding certification signed and sealed by representatives of sponsoring business establishments and representatives of units receiving supports and sponsorships, enclosed with legal invoices and documents of the sponsorship (in-kind or cash).

This Decree takes effect on the signing date.

APPRAISAL CHARGES FOR FIRE-FIGHTING EQUIPMENT

The Ministry of Finance promulgates the rates and the collection, remittance, management and use of appraisal charges for fire-fighting equipment in the Circular No. 02/2021/TT-BTC dated January 08, 2021.

To be specific: VND 130,000/vehicle for fire trucks, fire ships, fire canoes and ladder fire trucks; VND 40,000/fire pump; VND 20,000/reel of fire hose; VND 10,000/fire nozzle; VND 30,000/set for fire extinguishing control panels; VND 30,000/item for fire detectors, manual call points, fire alarm bells, fire alarm lights, emergency exit indicators and exit lightings; etc.

In addition, fuel cost and necessary per diem incurred when appraising the fire-fighting equipment; expenses for printing and affixing of appraisal stamps shall be paid by organizations or individuals requesting the appraisal based on actual costs and in accordance with the law regulations.

By the 5th every month at the latest, charge collectors shall deposit the charge amounts collected in the previous month into an account of charges to be paid to the state budget, opened at the State Treasury. They may retain 90% of the total collected charge amounts for expenses for spending items as specified.

This Circular takes effect on February 22, 2021.

CONDITIONS FOR DUTY-FREE TEMPORARY IMPORT
OF AUTOMOBILES BY DIPLOMATS

On March 26, 2021, the Prime Minister issues the Decision No. 14/2021/QD-TTg amending and supplementing a number of articles of the Prime Minister’s Decision No. 53/2013/QD-TTg dated September 13, 2013, on temporary import, re-export, destruction and transfer of automobiles and motorbikes of entities eligible for privileges and immunities in Vietnam.

Accordingly, a diplomat of Vietnam-based diplomatic missions may temporarily imported duty-free automobiles and motorbikes if satisfying the following conditions: Has worked in a Vietnam-based diplomatic mission, consular office or representative office of an international organization which is eligible for privileges and immunities, for at least 18 months counting from the date he/she is granted an identity card by the Ministry of Foreign Affairs, and still work in Vietnam for at least 12 months.

Besides, the management of automobiles temporarily imported free of duty by entities eligible for privileges and

immunities in Vietnam which have been sold, given or donated to other organizations or individuals in Vietnam but have not yet been carried out procedures for transfer and belong to the List of vehicles notified by the Ministry of Finance is prescribed as follows:

Firstly, automobiles in the List of vehicles no longer under management or in use, as confirmed by Vietnam-based diplomatic missions, consular offices or representative offices of international organizations (hereinafter referred to as representative offices) with the Ministry of Foreign Affairs (Vietnam);

Secondly, automobiles in the List of vehicles that are not authorized to the managing agencies for re-export or destruction by the entities eligible for privileges and immunities work after their working terms in Vietnam expire, as confirmed with the Ministry of Foreign Affairs (Vietnam) by the representative offices where such entities work.

This Decision takes effect on May 15, 2021.

APPROVING THE SCHEME ON DEVELOPMENT OF URBAN AREAS
 IN VIETNAM IN RESPONSE TO CLIMATE CHANGE

The Prime Minister promulgates the Decision No. 438/QD-TTg on approving the Scheme on development of urban areas in Vietnam in response to climate change in the 2021-2030 period on March 25, 2021.

Specific objectives of the scheme include: to formulate programs and plans to survey and assess levels of impacts of climate change on the urban system prone to high risk; to propose pilot programs and projects, estimate funding, and assign ministries, sectors and localities to coordinate with one another in organizing the implementation thereof; to set urban development orientations, focusing on improvement of quality of technical infrastructure, environmental services and overall master plans in adaptation to disasters and climate change, etc.

The Scheme shall be implemented with 02 phases: Phase I (2021-2025): To be implemented in 5 urban areas, including Ho Chi Minh City, Ha Noi, Can Tho, Hai Phong and Da Nang, and urban areas in 07 provinces in the Northern Coastal region, Central Coastal region and Mekong River delta and 07 provinces in the Northern Mountainous region and Central Highlands region; Phase II (2026-2030): To be implemented in coastal and delta urban areas prone to flood; or at high risk of flashfloods and landslides in the provinces in the Northern Mountainous region, Central Coastal region, etc.

This Decision takes effect on the signing date.

GUIDANCE ON METHOD TO DETERMINE ELECTRICITY GENERATION PRICES

The Ministry of Industry and Trade issues the Circular No. 57/2020/TT-BCT dated December 31, 2020 providing method to determine electricity generation prices and power purchase agreement.

Electricity generation prices of a power plant shall be determined on a basis of rational expenses of the project owner during the entire economic life of the project and the financial internal rate of return (IRR) not exceeding 12%.

Remarkably, for power plants with power purchase agreement expired but economic life unexpired: The electricity generation price stated in the current power purchase agreement shall continue to be applied for the next years until the expiration of the economic life.

Components of price for operation and maintenance of the power plant is revised according to the following principles:

Firstly, components of price for operation and maintenance by major repair expenses and other expenses are revised according to the average cost slippage rate as specified. The two parties shall study and propose mechanism of revision of components of prices price for operation and maintenance by major repair expenses and other expenses for foreign currency-based items;

Secondly, cost for operation and maintenance by workforce cost shall be revised according to changes to region-based minimum wage at the time of payment or according to CPI index announced by the General Statistics Office but not exceed 2.5%/year.

This Circular takes effect on February 22, 2021.