Legal Document Updates in English (39/2020)

GUIDANCE ON REDUCTION 30% OF ENTERPRISE INCOME TAX PAYABLE IN 2020

On September 25, 2020, the Government issues the Decree No. 114/2020/ND-CP on detailing the implementation of the National Assembly’s Resolution No. 116/2020/QH14 on reduction of enterprise income tax payable in 2020 for enterprises, cooperatives, non-business units and other organizations.

Specifically, to reduce 30% of enterprise income tax amount payable in the enterprise income tax period of 2020 for enterprises having total turnover no more than VND 200 billion in 2020. In case an enterprise’ expected total turnover in the enterprise income tax period of 2020 is not exceed VND 200 billion, such enterprise shall determine its quarterly temporary payment equivalent to 70% of the quarterly payable enterprise income tax amount.

At the end of the enterprise income tax period of 2020, if the enterprise’s total turnover in 2020 is not exceed VND

200 billion, such enterprise shall make a declaration of reduction of enterprise income tax for 2020 when settling enterprise income tax as prescribed.

If the first enterprise income tax period of a newly established enterprise is 2019 or the last enterprise income tax period of an enterprise which is converted into another form, or has it form of ownership transformed, or is consolidated, merged, split up, divided, dissolved or bankrupted is 2021, and such period is less than 03 months, then such period shall be added into the enterprise income tax period of 2020 to become an enterprise income tax period.

This Decree takes effect on August 03, 2020 and applies for the enterprise income tax period of 2020.

TO ADJUST THE MASTER PLAN ON DEVELOPMENT
OF VIETNAM’S COASTAL ECONOMIC ZONES

On September 24, 2020, the Prime Minister issues the Decision No. 1453/QD-TTg on adjusting and supplementing the Master plan on development of Vietnam’s coastal economic zones by 2020.

Specifically, to add the Quang Yen coastal economic zone (Quang Ninh province), Southeast Quang Tri economic zone (Quang Tri province), Thai Binh coastal economic zone (Thai Binh province) and Ninh Co economic zone (Nam Dinh province) to the Master plan on development of Vietnam’s coastal economic zones by 2020.

Besides, the time for adding the Southeast Quang Tri economic zone (Quang Tri province), Thai Binh coastal economic zone (Thai Binh province) and Ninh Co economic zone (Nam Dinh province) to the system of economic zones must comply with the Prime Minister’s Document No. 663/TTg-KTTH of May 13, 2013.

In addition, the time for adding the Quang Yen coastal economic zone (Quang Ninh province) to the system of economic zones must comply with the Prime Minister's Document No. 604/TTg-CN of May 22, 2020.

This Decision takes effect on the signing date.

TO EXTEND THE TIME LIMIT FOR LAND-USING INVESTMENT PROJECT REGISTRATION
IN CASE OF ERRORS IN THE SYSTEM

On September 18, 2020, the Ministry of Planning and Investment issues the Circular No. 06/2020/TT-BKHDT on guiding the Government's Decree No. 25/2020/ND-CP dated March 17, 2015 on detailing a number of articles of the Bidding Law regarding investor selection.

Accordingly, if only one investor meets preliminary requirements on capacity and experience, the Chairperson of provincial-level People’s Committee shall consider and decide to implement according to one of the following plans: To notify and guide the investors to submit dossiers to submit the investment policy decision as prescribed by law; To extend the registration time for project implementation.

Besides, the Department of Planning and Investment shall post the Lists of land-using investment projects and notices of invitation to submit statement of interest on the System for 07 working days, from the date on which the List of projects is approved. When carrying out the information, the

following documents shall be enclosed with: Decision on approval of the Lists of land-using investment projects, Decision on approving the dossier of invitation to prequalification for PPP projects, etc.

In addition, in case an error in the System leads suspension of service provision, the deadlines for submission of a dossier of project implementation registration for land-using investment projects that fall in the malfunction duration shall be extended as follows: In case such error is troubleshot and the System starts to operate again from 0:00. to 12:00, the new deadline shall be 15:00 on the same day; In case such error is troubleshot and the System starts to operate again on Saturday, Sunday or on public holidays, the new deadline shall be 09:00 on the first working day after weekends or public holidays, etc.

This Circular takes effect on November 05, 2020.

FROM OCTOBER 01, MAXIMUM SHORT-TERM LOAN INTEREST RATE IN VND IS 5.5%/YEAR

On September 30, 2020, the State Bank of Vietnam issues the Decision No. 1730/QD-NHNN on the maximum short-term loan interest rate in Vietnam dong of credit institutions and foreign bank branches for borrowers to meet the capital demand in service of a number of economic sectors and industries as prescribed in the Circular No. 39/2016/TT-NHNN dated December 12, 2016.

Accordingly, the maximum short-term loan interest rate in VND as prescribed in Clause 2, Article 13 of the Circular No. 39/2016/TT-NHNN which is applied by the credit institutions, foreign bank branches (except for people’s

credit fund and micro financial institution) shall be 4.5% per annum. For the People’s credit fund and micro financial institution, the maximum short-term loan interest rate in VND to be applied shall be 5.5% per annum.

Besides, the interest rate applied to credit contracts and loan agreement documents signed before the effective date of this Decision shall continue to be implemented under the signed credit contracts and loan agreements in accordance with the law at the time of contract and agreement signing.

This Decision takes effect on October 01, 2020.

FROM OCTOBER 01, DEPOSIT INTEREST RATE APPLICABLE DEPOSITS
WITH TERM OF 1 TO LESS THAN 6 MONTHS IS 4.0%/YEAR

On September 30, 2020, the State Bank of Vietnam issues the Decision No. 1729/QD-NHNN on the maximum interest rate applicable to VND deposits of organizations and individuals at credit institutions and foreign bank branches as prescribed in the Circular No. 07/2014/TT-NHNN dated March 17, 2014.

Accordingly, the maximum interest rate applicable to call deposits and deposits with term of less than one month shall be 0.2% per annum.

At the same time the maximum interest rate applicable to deposits with term of one month to less than six months shall be reduced from 4.25% per annum to 4.0 per annum. For People’s credit funds and micro-financial institutions, the maximum interest rate applicable to deposits with term of one month to less than six months shall be reduced to 4.5% per annum in comparison to 4.75% per annum as in previous regulations.

This Decision takes effect on October 01, 2020.

TO ISSUE THE LIST OF WASTES PERMITTED FOR IMPORT FROM OVERSEAS
FOR USE AS PRODUCTION MATERIALS

On September 24, 2020, the Prime Minister promulgates the Decision No. 28/2020/QD-TTg providing the list of wastes permitted for import from overseas for use as production materials.

Accordingly, wastes permitted for import from overseas for use as production materials include: Waste of iron, steel; Waste of plastic; Waste of paper; Waste of glass; Waste of non-ferrous metal; Waste of granulated blast-furnace slag.

At the same time, to provide the roadmap to the end of December 31, 2021 for a number of wastes permitted for

import from overseas for use as production materials: Recovered paper or paperboard (waste and scrap);

Other, including also unsorted waste and scrap (with HS Code of 4707.90.00); Granulated slag from the manufacture of iron or steel (granulated blast-furnace slag includes: Granulated slag, slag sand from the manufacture of cast iron, iron, steel) with HS Code of 2618.00.00.

This Decision takes effect on November 15, 2020.

TIME LIMIT FOR APPRAISING CONSTRUCTION WORKS OF SPECIAL GRADE IS 45 DAYS MAXIMUM

On September 18, 2020, the Government promulgates the Decree No. 113/2020/ND-CP on detailing Point dd, Clause 3, Article 3 of the Law Amending and Supplementing a Number of Articles of the Law on Construction regarding appraisal of construction designs to be implemented after basic designs and exemption from construction permits.

Accordingly, time limit for appraisal and review of licensing conditions is that for appraisal under Clause 8, Article 30 of Decree No. 59/2015/ND-CP is prescribed as follows: 45 days for construction works of grade I or special grade; 35 days for construction works of grade II or grade III; 25 days for other construction works.

To be specific: Within 05 working days after receiving a dossier submitted for appraisal, an appraising agency shall consider it and request in writing the project owner to supplement such dossier for appraisal. Within 03 working days after receiving a complete dossier submitted for appraisal, an appraising agency shall send a written request, enclosed with relevant documents, to a construction licensing agency for collection of opinions to certify satisfaction of conditions for grant of a work construction permit.

Besides, construction project owners shall take responsibility for lawfulness and accuracy of dossiers submitted for appraisal and fulfill appraising agencies’ requests stated in notices of results of appraisal of construction designs and assessment of conditions for grant of construction permits.

This Decree takes effect from the signing date through December 31, 2020.