Legal Document Updates in English (23/2021)

4 LEVELS OF TAX LAW COMPLIANCE OF TAXPAYERS

This is a new content specified in the Ministry of Finance’s Circular No. 31/2021/TT-BTC dated May 17, 2021 prescribing the application of risk management in tax administration.

According to this Circular, taxpayers are assessed and classified in to one of four levels of tax law compliance (instead of three levels as defined in previous regulations): High compliance; Medium compliance; Low compliance and Non-compliance. Management measures according to regulations shall be applied to taxpayers falling into the level of non-compliance. For taxpayers at levels of high, medium, low compliance and non-compliance, analysis the nature of the behavior to identify measures to improve the compliance is required.

Measures for improvement of tax law compliance of taxpayers includes: Record taxpayers complying the tax laws in the list to consider and select for commendation; For cases subject to improvement of compliance, organize

programs to meet taxpayers, dialogue conferences, seminars and training in order to help taxpayers properly and fully fulfill their tax obligations, research to amend policies, simplify administrative procedures, etc.

In addition, taxpayers shall be subject to sentinel supervision if showing one of the following signs: They conduct via-bank transactions showing suspicious signs; They or their lawful representatives are accused in criminal cases for acts of violations in taxation, invoices and documents; They show signs of high tax risks in key issues or subject to tax administration supervision through information collected by the tax agencies’ management work; They are collected as prescribed and they fail to explain or supplement information or provide explanations or additional information but fail to meet the requirements and time limit stated in the written notices of the tax agency.

This Circular takes effect on July 02, 2021.

FINANCIAL MANAGEMENT MECHANISM APPLICABLE TO PPP INVESTMENT PROJECTS

On March 26, 2021, the Government issues the Decree No. 28/2021/ND-CP prescribing the financial management mechanism applicable to public-private partnership (PPP) investment projects.

Specifically, grounds for determining the investor's equity include: The latest annual financial statement audited by an independent audit agency and the audited interim financial statement as prescribed; Dossiers of invitation to prequalification and bidding dossiers specifying the grounds for determining the investor's equity and the required time for determining the investor's equity serving as a basis for evaluating the investor’s financial capacity; etc.

A financial plan in the prefeasibility study report and feasibility study report of a PPP project must contain the following contents: Total investment amount of the PPP

project; Funding sources for implementation of PPP projects; Return on equity of the investor; Plans for recovery of investment capital and profits of the investor, etc.

In addition, the increased turnover amounts shared with the State by the PPP project enterprise shall be considered as a direct reduction in turnover when determining the taxable income of a PPP project enterprise. The PPP project enterprise shall remit the increased turnover amounts shared with the State into the state budget as prescribed. The decreased turnover amounts shared with the PPP project enterprise by the State shall be considered as a turnover from the provision of public products and services by the PPP project enterprise.

This Decree takes effect from the signing date.

5 CRITERIA FOR EVALUATING THE ANNUAL PERFORMANCE
OF THE VIETNAM DEVELOPMENT BANK

The Government promulgates the Decree No. 46/2021/ND-CP on financial management regime and operational efficiency assessment of Vietnam Development Bank on March 31, 2021.

Specifically, the criteria for evaluating the annual performance of the Development Bank, including: 1 - Investment credit of the State; 2 - Bad debt ratio; 3 - Financial results; 4 - Situation of law obedience on investment, management and use of State capital at the Development Bank for professional activities arising in the evaluation year; 5 - Situation on compliance with the reporting regimes.

Besides, after covering the deficit from previous years, the financial results for the year reaching the surplus condition shall be distributed as follows: Deduct 5% into the reserve fund to supplement charter capital, the maximum amount of

which does not exceed the charter capital of the Development Bank; Deduct 10% into the financial provision fund, the maximum amount of which does not exceed the 25% charter capital of the Development Bank; Deduct up to 25% into the development investment fund, etc.

In addition, expenses that are not accounted in operating expenses of the Development Bank include: Damages that have been supported by the State or by the insurance agency or the party causing the damage; Expenses for basis construction investment, procurement, upgrading and renovation of fixed assets belonging to capital of basis construction investment; Expenses for supporting localities, social organizations, other agencies, etc.

This Decree takes effect on June 01, 2021.

BY 2030, 100% OF DIRECTING AGENCIES COMPLETES
THE NATURAL DISASTER PREVENTION DATABASE

The Decision No. 379/QD-TTg approving the National Strategy on natural disaster prevention and control through 2030, with a vision toward 2050 is issued by the Prime Minister on March 17, 2021.

Accordingly, the Strategy sets out a number of specific targets toward 2030 as follows: Reduce damage caused by natural disasters, focus on ensuring the safety of people’s lives during storms and floods, and reduce the loss of people’s lives due to flash floods and landslides by 50% compared to the 2011-2020 period; Strive for 100% of government agencies at all levels, organizations and households to fully receive information and understand natural disaster prevention skills; 100% of national, regional and provincial directing and operating agencies for natural

HO CHI MINH CITY EXTENDS SOCIAL DISTANCING FOR ANOTHER 14 DAYS

This highlight content is stipulated in the Official Dispatch No. 1931/UBND-VX dated June 14, 2021 of the People’s Committee of Ho Chi Minh City.

Specifically, Ho Chi Minh City decides to continue implementing social distancing in the entire City under the Prime Minister’s Directive No. 15/CT-TTg dated March 27, 2020 for another 14 days, starting from 0:00 on June 15, 2021.

Meetings, events of over 20 people in one room, cultural, sport and entertainment events in public areas shall be suspended; it is not allowed to gather over 10 people outside of offices, schools, and hospitals, etc.

Convenience stores are allowed to operate but must comply with the regulations on prevention and control of the COVID-19 pandemic, not serve more than 10 people at a time and keep safe distance while waiting for payment. Food and beverage service establishments may operate but must not serve on-site, only takeaway and delivery services are allowed. The delivery person must ensure full pandemic prevention and control measures, especially wearing a mask and keeping a distance of 02 meters while waiting to pick up the goods. Heads of the above-mentioned establishments are requested to ensure safety and fully implement pandemic prevention measures.