Vietlaw Weekly Newsletter No. 356
New guidelines on penalties for administrative violations against regulations in construction sector
Circular No. 03/2018/TT-BXD dated April 24th, 2018 of the Ministry of Construction elaborating on a number of Articles of the Government’s Decree No. 139/2017/ND-CP dated November 27, 2017 on penalties for administrative violations against regulations on investment and construction; extraction, processing and trading of minerals used in construction, production and trading of building materials; management of infrastructural constructions; real estate business, housing development, management and operation of apartment buildings and office buildings
This Circular provides guidelines on applications of additional penalties for violations against regulations on construction, including:
1. Suspension of building permit within a definite period
2. Compensation for adjoining building which has been collapsed or is facing collapse
3. Enforced demolition of the works or works items which have been illegally constructed
4. Enforced suspension of execution of the construction works for adjustments to or issuance of a new building permit
5. Enforced transfer of illegal benefits obtained from illegal construction
Accordingly, for the case of executing the construction works inconsistently with the building permit or failure to obtain a building permit, the violating entity is obliged to suspend the execution of the construction works from the time when the administrative violation is recorded and within a maximum period of 60 days from the date on which the administrative violation is recorded, the violating entity is obliged to carry out procedure for applying for a new building permit or approval for changes or modifications to the existing building permit.
Over the aforesaid time limit, if the violating entity is unable to present the new building permit or the modified one, he/she is compulsory to demolish the construction works or works items built inconsistently with law regulations.
Notably, if the violating entity can present the new building permit or the modified one within the time limit but it is not consistent with the existing construction works, he/she is also subject to the compulsory demolition of such the construction works.
This Circular takes effect from June 12th, 2018 and replaces Circular No. 02/2014/TT-BXD dated 12th, 2014.
TT03_24042018BXD[ENGLISH].pdf (English translation)
Specific policies for Hoa Lac Hi-Tech Park
Circular No. 32/2018/TT-BTC dated March 30th, 2018 of the Ministry of Finance on guidelines for the Government's Decree No. 74/2017/ND-CP dated June 20, 2017 on specific policies for Hoa Lac Hi-Tech Park
This Circular provides for specific mechanisms policies for Hoa Lac hi-tech park (HHTP), including:
1. Site clearance and relocation;
2. Management and operation of technical infrastructure facilities;
3. Determination of land rents, compensation for site clearance and incentives;
4. Land management in functional areas infrastructure facilities of which are constructed and used for commercial purposes by investors;
5. Tax incentives;
6. Collection, transfer and use of land rents, payments for compensation and site clearance expenses, infrastructure user fees, wastewater treatment service fees, and deposits paid for securing the project implementation;
7. Transitional regulations on cases in which land has been used.
Accordingly, a new investment project in the HHTP is liable to the tax rate of 10% within 15 years, qualifies for a tax exemption within a maximum period of 04 years and gets 50% reduction in the amount of tax payable within 09 successive years.
With regard to new investment project which has total investment of at least VND 4,000 billion, it is liable to the tax rate of 10% within 30 years, qualifies for a tax exemption within a maximum period of 04 years and gets 50% reduction in the amount of tax payable within 09 successive years.
Import duties, personal income tax and non-agricultural land use tax shall comply with applicable regulations of law on taxes.
This Circular takes effect from May 15th, 2018.
TT32_30032018BTC[ENGLISH].pdf (English translation)
Some issues relating to invoice and tax policies applicable to goods as gifts to customers
Dispatch No. 13430/CT-TTHT dated March 31st, 2017 of the Departments of Taxation of Hanoi on response to tax policies
The document is to reply to some issues relating to invoice and tax policies applicable to goods as gifts given to customers.
Accordingly, in case a company presents gifts to its customers for the purpose of serving production and business in accordance with provisions of commercial law, the expenditures on gifts shall be recorded as reasonable expenses when determining income liable to enterprise income tax.
Upon giving the gifts to customers, the company has to still create invoices and fully calculate value added tax as if the goods are sold to customers (Clause 7, Clause 9 Article 3 of Circular No. 26/2015/TT-BTC).
However, in case the company buys gift vouchers of supermarkets to present customers, the gift vouchers are valuable papers equivalent to money, used as a payment instrument rather than goods, the company shall not issue invoices other than payment vouchers for making cost accounting.
According to Clause 10 Article 3 of Decree No. 65/2013/ND-CP , incomes from gifts are subject to personal income tax (PIT) only include gifts that are securities, capital holdings, real estate and other assets subject to ownership registration. Accordingly, in case the company gives gifts (goods, gift vouchers) to individual customers, if the gifts are not assets that must be registered for ownership, the company shall not deduct PIT.
CV13430_31032017CTHN[ENGLISH].pdf (English translation)
Amendments to regulations on provision of services at airports
Circular No. 27/2017/TT-BGTVT dated August 25th, 2017 of the Ministry of Transport on amendments to certain articles of the Circular No. 36/2014/TT-BGTVT dated August 29, 2014 by the Minister of Transport on quality of passenger services at airports and the Circular No. 14/2015/TT-BGTVT dated April 27, 2015 by the Minister of Transport on non-refundable fixed compensation in air passenger transport
This Circular is to amend, supplement to requirements of material facilities, infrastructure with regard to airport enterprises and enterprises providing passenger services such as space for check-in areas, number of check-in counters, number of seats, etc.
In addition, according to the amendments at this Circular, airlines shall be exempted from obligations to pay the non-refundable fixed compensation to passengers of cancelled flights who are partners using discount tickets.
This Circular takes effect from November 1st, 2017.
TT27_25082017BGTVT[ENGLISH].pdf (English translation)
Certificate of Origin (C/O)
Regarding goods in transit in counties other than members of VKFTA
Official letter No. 2667/TCHQ-GSQL dated May 16th, 2018 of the General Department of Vietnam Customs regarding issues relating to certificate of origin (C/O)
According to the regulations in Article 10 Annex 4 of Circular No. 40/2015/TT-BCT, in case goods from Korea imported to Vietnam are in transit in countries other than members of Vietnam-Korea Free Trade Agreement (VKFTA), upon carrying out customs procedures, it is required to provide documents proving the direct transport.
CV2667_16052018TCHQ[VLO].pdf (English translation)
Regarding fines on breaches of construction contracts
Official letter No. 828/BXD-KTXD dated April 16th, 2018 of the Ministry of Construction regarding guidelines on performance of construction contracts
According to the Ministry of Construction’s opinions, “guarantee for contract performance” means a method in order for a contractor to ensure the performance of his obligations in line with the signed contract, including the payment of fines imposed on breaches of the contract, unless there are other agreements reached by the parties in the contract.
Regarding fines imposed on breaching construction contracts, currently, the maximum fine imposed on breaches of a contract under applicable laws is 12% of value of the breached contract.
CV828_16042018BXD[VLO].pdf (English translation)
How to withhold PIT on brokerage commissions paid to foreigners
Official letter No. 760/CT-TTHT dated January 26th, 2018 of the Department of Taxation of Ho Chi Minh city regarding tax policies
In case a company pays brokerage commissions to foreigners in Vietnam but the foreigners do not sign labor contract with the company, if the foreigners are residents in Vietnam, the company shall withhold PIT at the tax rate of 10% (Clause 1.i Article 25 of Circular No. 111/2013/TT-BTC).
However, if the foreigners are non-residents in Vietnam, the company shall withhold PIT at the tax rate of 20% according to Clause 1 Article 18 of Circular No. 111/2013/TT-BTC).
CV760_26012018CTHCM[VLO].pdf (English translation)
Import and export policies
Requirements of a dossier for import of already – used equipment
Official letter No. 1406/GSQL-GQ1 dated May 14th, 2018 of the General Department of Vietnam Customs regarding import of already – used machinery, equipment
According to point a Clause 1 Article 6 of Circular No. 23/2015/TT-BKHCN, already - used equipment shall be imported only if its age must not exceed 10 years.
Apart from the prescribed customs dossier, importers must additionally provide these documents when they import already - used equipment (Clause 2, Article 7 of Circular No. 23/2015/TT-BKHCN):
- 01 original Certificate of manufacturing year and manufacturing standard issued by the manufacturer of the already - used equipment in accordance with regulations;
- 01 original assessment Certificate of manufacturing year and manufacturing standard issued by an assessing organization of the already - used equipment in accordance with regulations
Customs authorities shall base on the aforesaid documents in order to settle customs procedures for enterprises.
CV1406_14052018TCHQ[VLO].pdf (English translation)
New procedures for response to information security incidents
Circular No. 20/2017/TT-BTTTT dated September 12th, 2017 of the Ministry of Information and Communications regulations on coordinating and responding to information security incidents nationwide
Similar to the current regulations, Vietnam Computer Emergency Response Team VNCERT is still the National Coordinating Agency for Incident Response.
Organizations, enterprises and individuals are still voluntarily to register for joining the emergency response network.
The new point of this Circular is the supplementation of the incident response procedures (Annex II) and outline plan for responding to information security incidents (Annex III).
This Circular does not include activities to respond to serious network information safety incidents prescribed in the Decision No. 05/2017/QD-TTg.
This Circular takes effect from November 1st, 2017 and abolishes Circular No. 27/2011/TT-BTTTT dated October 4th, 2011.
TT20_12092017BTTTT[EN].pdf (English translation)
Containers temporarily imported for re-export shall be exempt from VAT
Official letter No. 2407/TXNK-CST dated May 15th, 2018 of the General Department of Vietnam Customs regarding valued added tax (VAT) on imported goods
According to Clause 20 Article 5 of the Law on VAT No. 13/2008/QH12 , goods temporarily imported for re-export within a certain period of time are not subject to VAT.
Accordingly, in case a company imports mini containers in the form of temporary import for re-export, it shall not pay VAT.
However, if the company imports mini containers then sells them to customers in Vietnam for export abroad (it is not the form of temporary import for re-export), it shall not be exempt from VAT. Upon the importation, the company has to pay 10% VAT.
CV2407_15052018TCHQ[VLO].pdf (English translation)
Pharmaceutical - Cosmetics
Regarding Lists of substances allowable/disallowable to be used in cosmetics
Official letter No. 6777/QLD-MP dated April 16th, 2018 of the Ministry of Health regarding update of regulations on substances used in cosmetics
Relating to cosmetics, the document announces that the Drug Administration of Vietnam has posted Annexes of ingredients of substances allowable/disallowable to be used in cosmetics according to results of the 27th meeting between the ASEAN Cosmetic Committee (ACC) and the ASEAN Cosmetic Scientific Body (ACSB) on its website at the address: http://www.dav.gov.vn, including:
1. Substances disallowable to be used in cosmetics (Annex II).
2. Substances used in cosmetics with limits on concentration/content (Annex III).
3. Colouring agents provisionally allowed for use in cosmetic products (Annex IV).
4. Preservatives allowed for use in cosmetic products (Annex VI).
5. UV filters which cosmetic products may contain (Annex VII).
Roadmap for application of the contents updated at the aforesaid Annexes of the Agreement on the ASEAN Harmonized Cosmetic Regulatory Scheme shall be as follows:
- With regard to Methylisothiazolinone (MIT): Cosmetic products which contain MIT leaving on body (leave - on products) or cosmetic products which contain MIT exceeding the concentration of 0,0015% (15 ppm) are only circulated in the market to June 1st, 2019.
- With regard to Lyral (HICC), Atranol, Chloroatranol subtances: they are included in Annex II (Substances disallowable to be used in cosmetics). As the result, enterprises are not allowed to further proclaim cosmetic products whose component formula contains any of the aforesaid substances. Cosmetic products which have been proclaimed shall be further circulated in the market to January 1st, 2020.
- With regard to cosmetic products which contain oxidizing/non - oxidizing colouring agents for hair dyeing in Annex III (Substances used in cosmetics subject to limits on concentration/content): on the products’ labels, it is required to write a warning "Wear suitable gloves". From December 1st, 2020, all cosmetic products for hair dyeing whose formula contains oxidizing/non - oxidizing colouring agents for hair dyeing included in Annex III must be written this warning when they are sold in the market.
CV6777_16042018BYT[VLO].pdf (English translation)
Only projects with less than VND 15 billion are exempt from establishment of project management board
Official letter No. 742/BXD-KTXD dated April 9th, 2018 of the Ministry of Construction regarding guidelines on application of Decision No. 79/QD-BXD dated February 15th, 2017 of the Ministry of Construction
According to Clause 8 Article 1 of Decree No. 42/2017/ND-CP, an investor is only allowed to use qualified affiliated units to directly manage construction projects with regard to construction projects with less than VND 15 billion in total investment. For construction projects with VND 15 billion or more, it is required to establish a project management Board.
Upon the use of qualified affiliated units to directly manage construction projects, project management costs in total investment or construction estimate shall be determined according to the guidelines provided in Part I of the Standard project management and construction consulting costs issued together with Decision No. 79/QD-BXD dated February 15th, 2017 and the factor k = 0.8 shall be applied.
CV742_09042018BXD[VLO].pdf (English translation)
Real estates trading
Some issues relating to residential construction projects
Official letter No. 975/BXD-QLN dated May 4th, 2018 of the Ministry of Construction regarding guidelines on some issues in the course of implementation of the Law on Construction, the Law on Housing, and Decree No. 100/2015/ND-CP dated October 20th, 2015
According to Clause 2 Article 17 of the Law on housing No. 65/2014/QH13, residential construction projects include these projects:
- Projects for building or renovating an independent housing or housing estate;
- Projects for building residential area synchronized with technical and social infrastructure in the rural areas;
- Projects for building urban areas;
- Projects using multi-purpose land which have residential land plots;
- Projects for building works for both residential and business purposes.
Accordingly, a project for building residential area in the form of only investing in technical infrastructure for the purpose of lot division for sale of grounds shall be also considered to be a residential construction project
As the result, the investor has to comply with the regulations in Clause 1 Article 19 of the aforesaid Law on housing.
CV975_04052018BXD[VLO].pdf (English translation)
Culture - Sports
National technical regulation on E-UTRA base stations
National technical regulation QCVN 110:2017/BTTTT dated October 17th, 2017 of the Ministry of Information and Communications on evolved universal terrestrial radio access (E-UTRA) base stations (BS)
This regulation specifies the technical requirements for evolved universal terrestrial radio access (E-UTRA) base stations operating in whole or in part in any band.
This regulation is promulgated together with Circular No. 24/2017/TT-BTTTT dated October 17th, 2017, which takes effect from July 1st, 2018.
QCVN110_17102017BTTTT[EN].pdf (English translation)
Electricity - Energy
Promulgation of the National technical regulation on general electromagnetic compatibility for radio broadband data transmission equipment
Circular No. 18/2017/TT-BTTTT dated September 11th, 2017 of the Ministry of Information and Communications on issuing "National technical regulation on general electromagnetic compatibility for radio broadband data transmission equipment"
This Circular is to promulgate the National technical regulation on general electromagnetic compatibility for radio broadband data transmission equipment, QCVN 112:2017/BTTTT.
This Circular takes effect from July 1st, 2018.
TT18_11092017BTTTT[EN].pdf (English translation)
Plan for enhancing state management in hydro power sector
Decision No. 396/QD-BCT dated February 10th, 2017 of the Ministry of Industry and Trade on introduction of action plan for implementing the Resolution No. 33/2016/QH14 on interpolation and answer about hydro power at second meeting session held by XIV National Assembly
This Plan aims to make positive change in state management and enforcement of regulations of laws on planning, construction, investment and operation of hydropower projects/works by relevant authorities; ensure safety development of hydropower industry, social and environmental protection.
This Decision takes effect from the date of its signing.
QD396_10022017BCT[ENGLISH].pdf (English translation)
National technical regulation on general electromagnetic compatibility for radio broadband data transmission equipment
National technical regulation QCVN 112:2017/BTTTT dated September 11th, 2017 of the Ministry of Information and Communications on general electromagnetic compatibility for radio broadband data transmission equipment
This regulation and QCVN 18:2014/BTTTT stipulate the requirements for electromagnetic compatibility (EMC) for radio broadband data transmission equipment are listed as follows:
- Radio communications equipment using spread spectrum modulation in the 2.4 GHz band;
- Radio access equipment operating in the frequency range from 5 150 MHz to 5 350 MHz, 5 470 MHz to 5 725 MHz and 5 725 MHz to 5 850 MHz;
- High-speed radio access equipment from 57 GHz to 66 GHz; and
- Equipment of BWA/WiMAX broadband radio access system in both TDD and FDD modes.
This Regulation is promulgated together with Circular No. 18/2017/TT-BTTTT dated September 11th, 2017, which takes effect from July 1st, 2018.
QCVN112_11092017BTTTT[EN].pdf (English translation)
Jurisdiction and organizational structure of the Ministry of Science and Technology
Decree No. 95/2017/ND-CP dated August 16th, 2017 of the Government on defining the functions, tasks, powers and organizational structure of Ministry of Science and Technology
This Decree takes effect from the date of its signing and replaces Decree No. 20/2013/ND-CP dated February 26th, 2013.
ND95_16082017CP[EN].pdf (English translation)
Promulgation of National technical regulation on evolved universal terrestrial radio access (E-UTRA FDD) repeater
Circular No. 25/2017/TT-BTTTT dated October 17th, 2017 of the Ministry of Information and Communications on promulgating “National technical regulation on Evolved Universal Terrestrial Radio Access (E-UTRA FDD) Repeater”
Promulgated together with this Circular is the National technical regulation on evolved universal terrestrial radio access (E-UTRA FDD) repeater, QCVN 111:2017/BTTTT ).
This Circular takes effect from July 1st, 2018.
TT25_17102017BTTTT[EN].pdf (English translation)
National technical regulation on evolved universal terrestrial radio access (E-UTRA FDD) repeater
National technical regulation QCVN 111:2017/BTTTT dated October 17th, 2017 of the Ministry of Information and Communications on evolved universal terrestrial radio access (E-UTRA FDD) repeater
This regulation specifies technical requirements for repeaters of E-UTRA FDD system operating in the entire band or part of the band
This regulation is promulgated together with Circular No. 25/2017/TT-BTTTT dated October 17th, 2017, which takes effect from July 1st, 2018.
QCVN111_17102017BTTTT[EN].pdf (English translation)
Promulgation of National technical regulation on E-UTRA base stations
Circular No. 24/2017/TT-BTTTT dated October 17th, 2017 of the Ministry of Information and Communications on issuing “National technical regulation on Evolved Universal Terrestrial Radio Access (E-UTRA) - Base Stations”
Promulgated together with this Circular the National technical regulation on Evolved Universal Terrestrial Radio Access (E-UTRA) base stations, QCVN 110:2017/BTTTT.
This Circular takes effect from July 1st, 2018.