Legal Document Updates in English (33/2011)

GUIDANCE ON THE IMPLEMENTATION OF THE RESOLUTION 08
ON TAX EXEMPTION AND REDUCTION
 

On August 19, 2011, the Office of Government issued Official Dispatch No. 5716/VPCP-KTTH dated August 19, 2011 on process and procedure in the Decree promulgating the implementation of the Resolution No. 08/2011/QH13 on tax exemption and reduction.
Accordingly, at the proposal of the Ministry of Finance at the Official Dispatch No. 10693/BTC-CST dated August 11, 2011 on drafting the Decree promulgating the implementation of the Resolution No. 08/2011/QH13 dated August 06, 2011 of the National Assembly on issuing supplementing some ofsolutions of tax in order to

untie difficulties for enterprises and individuals in the simplified process and procedure, the Prime Minister agreed with the proposal of the Ministry of Finance at above Official Dispatch and assign the Ministry of Finance to cooperate with the Ministry of Justice to have specific implementation.

TO ESTABLISH THE NATIONAL TECHNOLOGICAL INNOVATION FUND
 

On August 05, 2011, the Prime Minister, Mr. Nguyen Tan Dung signed to issued the Decision No. 1343/QD-TTg  amending, supplementing the Decision No. 1101/QD-TTg dated July 23, 2009 of the Prime Minister on non-business organizations directly under the Ministry of Science and Technology.

Accordingly, from August 05, the Ministry of Industry and Trade will be added more the National Technological Innovation Fund, and increase the total non-business organizations directly under the Ministry of Science and Technology to 11 instead of 10 non-business organizations as before.

The National Technological Innovation Fund is established in accordance with the Decision No. 1342/QD-TTg, it is the state financial organization and operates not for profitable purposes, it has functions for preferential loans, supporting loan rate, capital guarantee, supporting capitals for organizations, individuals and businesses in researching, transferring, innovating and finishing technology.

Fund’ s charter capital is VND 1.000 billion by the state budget on scientific activities, technology in supplying and being supplied with supplementary capitals annually to archive Fund’s charter capital level. Fund is allowed to use 50% capital supplied by the state budget in order to carry out forms of supporting loan rate, preferential loans and capital loan guarantee.

FROM SEPTEMBER 01, BANKS ARE ALLOWED TO LEND OVER 80%
MOBILIZATION CAPITAL
 

The State Bank of Vietnam (hereafter called the State Bank) issued the Circular No. 22/2011/TT-NHNN amends, supplements some articles of the Circular No. 13/2010/TT-NHNN dated May 20, 2010 of the State Bank of Vietnam stipulating prudential ratios in operations of credit institutions (hereafter called Circular 13), which was amended and supplemented at the Circular No. 19/2010/TT-NHNN dated September 27, 2020 on amending, supplementing some articles of the Circular 13 (hereafter called Circular 19) by issuing the Circular No. 22/2011/TT-NHNN (Circular 22) dated August 30, 2011.

Among them, the most important content is that the State Bank agrees to discard ratio of granted credits to mobilized capital out of the capital adequacy ratio that credit institutions must ensure compared to previous regulations. In particular, banks are allowed to lend over 80% mobilizations, for non-bank credit institutions, this ratio is not limited in the rate of 85% compared to previous regulations.

However, credit institution’s loan activities are limited within other prudential ratios in accordance with regulations of the Circular 13 as: Capital adequacy ratio; credit limits; solvency ratios, limits on capital contribution share purchase.

Credit institutions, excluding foreign bank branches, shall maintain a capital adequacy ratio of 9% between their own capital and their total risk-weighted assets (individual capital adequacy ratio). Credit institutions shall make consolidated financial statements under law. In addition to maintaining an individual capital adequacy ratio stipulated in Clause 1 of this Article, they shall concurrently maintain a capital adequacy ratio of 9% of the basis of consolidation of capital and assets of their own and their affiliated companies (consolidated capital adequacy ratio).

The Circular 22 also improves the risk co-efficient from 20% to 50% to asset that are foreign-currency receivables secured with valuable papers issued by the credit institution itself. Receivables in Vietnam dong must be secured with valuable papers issued by other credit institutions established in Vietnam;

BRINGING ABOVE USD 5000 ON ENTRY AND EXIT MUST DECLARE CUSTOMS
 

On August 12, 2011, the State Bank of Vietnam issued the Circular No. 15/2011/TT-NHNN providing for the carrying of cash in foreign currency, Vietnamese dong by individuals upon entry into and exit from the country.

In particular, Individuals carry foreign currency, Vietnamese dong in cash, upon entry into or exit from the country with passport through international border gates of Vietnam, in excess of USD 5,000 (Five thousand United States dollars) or other foreign currencies of the same value; VND 15,000,000 (Fifteen million Vietnamese Dong) shall be required to declare to the border Customs.

In the event where a person, upon entry into the country, carries an amount of cash in foreign currency in excess of USD 5,000 or other foreign currencies of the same value and has a demand for depositing such amount of foreign currency to his foreign currency payment account at a credit institution, foreign bank’s branch authorized to engage in foreign exchange (hereinafter collectively referred to as authorized credit institutions), he shall be required to declare to the border Customs. Entry-exit declaration statement with confirmation of the border Customs about the carried amount of foreign currency in cash as a basis for the authorized credit institution to cause the foreign currency in cash deposited to the payment account.

Amount of foreign currency and Vietnamese dong in cash required to be declared at the border gate Customs shall not be applied to the individuals who carry means of payment, valuable papers in foreign currency or in Vietnamese dong such as traveler’s cheques, bank card, savings book, securities and other valuable papers.

As according to this Circular, General Director (Director) or an authorized representative in conformity with provisions of laws of the authorized credit institution shall be responsible for issuing the Confirmation to the individual carrying foreign currency, Vietnamese dong in cash for purposes as stipulated in Paragraph 2 and Paragraph 3 Article 8 of the Decree No. 160/2006/ND-CP dated 28/12/2006 of the Government providing in details for the implementation of the Ordinance on foreign exchanges.

In any case other than as stated above, the State Bank of Vietnam shall consider and approve in writing to the individual who has a demand for carrying abroad foreign currency, Vietnamese dong in cash based on the actual situation and necessity of specific cases.

ENTERPRISES MUST SUBMIT TAX DECLARATION DOSSIERS IN THE REGULATED TERM
 

On answering the Official Dispatch No. 5548/CT-TTHT dated July 07, 2011 of the Department of Tax of Ho Chi Minh City on the proposal on guidance about tax declaration in the time of tax code redemption. The General Department of Tax issued the Official Dispatch No. 2966/TCT-KK dated August 23, 2011 on tax declaration in the time of tax code redemption.

Accordingly, Section V, Part B of the Circular No. 157/2007/TT-BTC dated dated December 24, 2007 of the Ministry of Finance guiding the enforcement  enforcement by withdrawal of tax identification numbers, suspension of use of invoices; revocation of business registration certificates or establishment and operation licenses or practice licenses. Point 1.3, Section I, Part B of the Circular No. 60/2007/TT-BTC dated June 14, 2007 of the Ministry of Finance; point c, section 1, Article 9 of the Circular No. 28/2011/TT-BTC dated February 28, 2011 of the Ministry of Finance guiding For taxes to be declared on a monthly, quarterly or yearly basis, if no tax obligation arises in a tax period or taxpayers are currently eligible for tax incentives, exemption or reduction, taxpayers shall still submit tax declaration dossiers to

tax agencies within the set time limit, except for cases in which activities that give rise to the tax obligation have terminated and cases in which business operations are suspended under Point e, Clause 1 of this Article. Point 1.3, Section II, Part B of the Circular No. 129/2008/TT-BTC dated December 26, 2008 of the Ministry of Finance guiding the conditions for VAT tax. Section IV, Part B of the Circular No. 130/2008/TT-BTC dated December 26, 2008 of the Ministry of Finance guiding on payments without being deducted when defining tax liable incomes.

As a result, in the case that enterprises applied compulsory measures on tax code redemption, enterprises must submit tax declaration dossiers to tax offices when having arising cases in invoices for trading goods and services or payable amount in accordance with regulated term. Enterprises are allowed to declare tax deduction and add to the expenses when calculating enterprise income tax if they can satisfy all regulations on the Circular No. 129/2008/TT-BTC on VAT and Circular No. 130/2008/TT-BTC on enterprise income tax.