Vietlaw Weekly Newsletter No. 365
Labour - Employment
Official schedule of state holidays in 2019
Official letter No. 6519/VPCP-KGVX dated July 11th, 2018 of the Government's Office on national holidays in 2019 for public sector employees
According to this Official letter, the Prime Minister has approved the schedule of state holidays in 2019 as follows:
- Calendar New Year: Public employees shall be entitled to take days off from Monday, December 31st, 2018 to the end of Tuesday, January 1st, 2019, and shall be required to take Saturday, January 5th, 2019 as a compensatory workday.
- Lunar New Year: Public employees shall be entitled to take days off from Monday, February 4th, 2019 to the end of Friday, February 8th, 2019 without taking swapping workday.
- Victory Day (April 30th, 2019) and International Workers’ Day (May 1st, 2019): Public employees shall be entitled to take days off from Monday, April 29th, 2019 to the end of Wednesday, May 1st, 2019, and shall be required to take Saturday, May 4th, 2019 as a compensatory workday.
The aforesaid schedule of state holidays is only applicable to state employees. With regard to enterprises, they may themselves decide schedule of holidays on the basis of their specific programs, plans.
CV6519_11072018VPCP[ENGLISH].pdf (English translation)
Law on competition applicable from July 1st, 2019
Law No. 23/2018/QH14 dated June 11th, 2018 of the National Assembly on competition
This Law sets forth anti-competitive practices, economic concentration that causes or may cause anti-competitive effects on the market of Vietnam; unfair competition practices; competition legal proceedings; sanctions against violations of competition law; state management of competition.
Accordingly, in comparison with the regulations in the earlier Law, this Law enlarges regulated entities. In particular, apart from enterprises, industry associations, this Law also applies to public sector entities (Article 2).
In addition, this new Law also supplements some agreements which are considered to be anti-competitive agreements such as: agreements on distributing customers; agreements on not trading with enterprises other than the parties to the agreements; agreements on restricting consumption market, sources of supply of goods and services from enterprises other than the parties to the agreements (Article 11).
Relating to criteria for determining an enterprise or a group of enterprises holding a dominant position on the market, apart from market share, this new Law also supplements the criterion “substantial market power”. In particular, it shall base on these factors; financial strength and size of the enterprise; advantages in technology and technical infrastructure; right to own, obtain and assess infrastructure, etc. (Article 26).
This Law takes effect from July 1st, 2019 and replaces the Law on competition No. 27/2004/QH11 dated December 14th, 2004.
LL23_12062018QH14[ENGLISH].pdf (English translation)
There is no limit on types of commodities traded on commodity exchanges
Decree No. 51/2018/ND-CP dated April 9th, 2018 of the Government on amendments to some articles of the Government’s Decree No. 158/2006/ND-CP dated December 28, 2006 elaborating the Commercial Law with respect to trading in commodities through commodity exchanges
One of the most important amendments of this Decree is the removal of the limit on scope of commodities allowable to be sold and purchased through commodity exchanges according to the List announced by the Ministry of Commerce. Under this Decree, it is allowable to sell and purchase all types of goods, including commodities subject to conditional business and limited to business (except for commodities banned from business).
However, with regard to commodities subject to conditional business and limited to business, the commodity exchange shall register with a competent authority so that such commodities can be listed on the commodity exchange. With regard to other commodities, it is required to inform the Ministry of Industry and Trade at least 30 days before such commodities are officially listed on the commodity exchange.
In addition, according to the newly-added regulations, foreign investors are also entitled to trade commodities through commodities exchanges in Vietnam and entitled to contribute capital to establish a Vietnamese foreign commodity exchange or purchase shares and stakes of the Vietnamese foreign commodity exchange. However, their holding shall not exceed 49% of the charter capital.
With regard to Vietnamese traders, under the new regulations, they are entitled to trade commodities through foreign commodity exchanges through domestic commodity exchanges interconnected with foreign commodity exchanges.
This Decree takes effect from June 1st, 2018.
ND51_09042018CP[ENGLISH].pdf (English translation)
Guidelines for entities that are exempt from or required to have certificate of practicing in bidding operation
Official letter No. 2683/BKHDT-QLDT dated April 26th, 2018 of the Ministry of Planning and Investment regarding regulations provided for individuals participating in bidding activities
This document is to provide guidelines in details for entities that are exempt from or required to have the certificate of practicing in bidding operation from January 1st, 2018 according to the regulations of the Law on bidding and Circular No. 03/2016/TT-BKHDT.
Accordingly, from January 1st, 2018, individuals are required to have the certificate of practicing in bidding operation when:
+ they directly participate in making dossiers of invitation for expression of interest, dossiers of invitation for pre-qualification, bidding dossiers, dossiers of requirements; assessment of dossiers of expression of interest, dossiers of pre-qualification participation, bid dossiers, dossiers of proposals; and
+ they belong to these units: Professional project management boards (that are field-based project management boards or area-based project management boards or project management boards that are established in order to manage professional projects); enterprises, units operating in advisory for bidding; permanent concentrated procurement units.
In contrast, they shall be exempt from the certificate of practicing in bidding operation (it is only required the certificate of training in bidding) when:
+ they belong to project management board that is established in order to execute a specific project and this project management board shall be terminated after the project completes;
+ they directly participate in the jobs mentioned in Clause 7 Article 35 of Circular No. 03 but they do not professionally operate in the bidding field.
+ they directly participate in the jobs mentioned in Clause 7 Article 35 of Circular No. 03 in concentrated procurement in the form of taking concurrent responsibilities irregularly and discontinuously and do not professionally, permanently operate in the bidding field.
With regard to bids for which the contractor selection is held before January 1st, 2018 but the work of contractor selection is not completed after January 1st, 2018, the individuals shall be allowed to continue performing their jobs until they are finished without the requirement of the certificate of practicing in bidding operation.
CV2683_26042018BKHDT[VLO].pdf (English translation)
Guidelines on settlement of assets acquired from various sources of capital when cooperatives are declared bankrupt
Circular No. 31/2018/TT-BTC dated March 30th, 2018 of the Ministry of Finance on settlement of assets acquired from various sources of capital when cooperatives and cooperative unions are dissolved or declared bankrupt.
“Assets acquired from various sources of capital” regulated in this Circular are assets acquired from financial assistance grants or subsidies given by the Government; annual investment and development funds; offered and donated amounts which are defined as undivided assets; other capital and assets which are defined as undivided assets in the charter, and capital contributions by members of cooperatives.
According to Article 3 of this Circular, when a cooperative is dissolved or declared bankrupt, its assets acquired from various sources of capital shall be settled in the following order:
- The assets shall be transferred to cooperatives or administrative agencies, public service providers or state-owned enterprises among which other cooperatives located in the same district shall be given priority.
- If the assets cannot be transferred to the aforesaid entities, they shall be liquidated or sold to eligible entities.
The valuation of undivided assets and assets transferred, liquidated is required to hire a qualified valuation service provider or establish the valuation council.
Upon transfer or liquidation of assets, it is compulsory to carry in the form of auction sale, except for an asset whose revalued amount is less than VND 2,000,000
This Circular takes effect from May 14th, 2018.
TT31_30032018BTC[ENGLISH].pdf (English translation)
Cars - Motorcycles
It is banned from import of special - use motorcycles of which frame number has been punched
Official letter No. 2053/TCHQ-GSQL dated April 17th, 2018 of the General Department of Vietnam Customs regarding import of special - use motorcycles of which frame number has been punched
According to Clause 1 Article 5 and point c Clause 6 Section II Annex I of Decree No. 187/2013/ND-CP , special - use motorcycles of which frame or engine number has been erased, modified or refitted belong to the list of goods banned from import.
Accordingly, enterprises are not allowed to import special - use motorcycles of which frame number has been punched.
CV2053_17042018TCHQ[VLO].pdf (English translation)
Certificate of Origin (C/O)
Regarding the use of a general C/O for goods imported under various forms
Official letter No. 4120/TCHQ-GSQL dated July 13th, 2018 of the General Department of Vietnam Customs regarding issues relating to C/O (certificate of origin) form D
According to the General Department of Vietnam Customs’ opinions, if at the same time an enterprise registers many customs declarations with various forms at 01 Sub-department of customs for the same shipment which is granted a general C/O, the C/O shall be accepted for the whole shipment.
With regard to declarations registered before June 5th, 2018, the application of C/O shall be carried out according to the new regulations at Article 7 of Circular No. 38/2018/TT-BTC.
CV4120_13072018TCHQ[VLO].pdf (English translation)
Culture - Sports
Law on physical training and sports applicable from 2019 (amended)
Law No. 26/2018/QH14 dated June 14th, 2018 of the National Assembly on amendments to the Law on Physical Training and Sports No. 77/2006/QH11
According to the amendments at this Law, apart from national sports, swimming and traditional martial arts are also prioritized for development.
With regard to prohibited acts, this Law supplements the regulation on prohibiting from organizing illegal sports betting and participating in illegal sports betting.
In addition, this Law also supplements business conditions applied to professional sports clubs, sports business requirements applied to enterprises and conditions for sports betting.
Accordingly, sports betting companies are permitted to operate only after obtaining certificate of eligibility for sports betting issued by competent authorities and operate sports included in the list of sports activities permitted for sports betting business.
This Law takes effect from January 1st, 2019.
LL26_14062018QH14[ENGLISH].pdf (English translation)
It is not allowable to carry out procedures for export abroad of goods dispatched from bonded warehouses at any Express Customs Branch
Official letter No. 3416/CPN-DGS dated November 1st, 2017 of Ho Chi Minh city Express Customs Branch regarding receipt of goods dispatched from bonded warehouses for export abroad
According to point c Clause 3 Article 91 of Circular No. 38/2015/TT-BTC , goods exported abroad from a bonded warehouse may only be exported through the checkpoints prescribed by the Prime Minister and the Ministry of Industry and Trade.
However, an Express Customs Branch is not a border gate Sub- department of customs and therefore it is not competent to settle customs procedures for goods dispatched from bonded warehouses for exported abroad.
CV3416_01112017HQCPN[VLO].pdf (English translation)
Regarding VAT refund with regard to investment projects
Official letter No. 1549/TCT-CS dated April 24th, 2018 of the General Department of Taxation regarding value added tax (VAT) refund.
According to point c.1 Clause 3 Article 1 of Circular No. 130/2016/TT-BTC, from July 1st, 2016 investment projects of a business establishment to which charter capital is not fully contributed as registered shall not be entitled to receipt input VAT refund.
Input VAT of such projects shall be only declared for gradual deduction until it is fully deducted.
CV1549_24042018TCT[VLO].pdf (English translation)
Regarding pilot implementation of particular policies for development of Ho Chi Minh city
Resolution No. 54/2017/QH14 dated November 24th, 2017 of the National Assembly on pilot implementation of particular policies for development of Ho Chi Minh city
This Resolution prescribes the pilot implementation of particular policies applied to Ho Chi Minh City (hereinafter referred to as the City) on management of land, investment, state finance and state budget and the pay rate of public officials and public employees.
Accordingly, regarding investment, the Resolution allows the People’s Council of the City to decide the investment guidelines of group A projects, except projects prescribed in point a, b, c and d in clause 1 in Article 8 of the Law on public investment No. 49/2014/QH13 .
Regarding management of state finance and state budget, the Resolution allows the People’s Council of the City to send a proposal to the Government for consideration which is then submitted to the Standing Committee of National Assembly for issuing a decision on pilot increase in tax or tax rate applied to goods subject to special excise duty and environmental protection duty in the City. However, the extra amount of tax or tax rate shall not exceed 25% of current tax amount or current tax rate.
In addition, the People’s Council of the City is also allocated the right to increase or apply fees and charges which are not prescribed in the List of fee and charge issued together with the Law on Fees and Charges in the City.
This Resolution takes effect from January 15th, 2018.
NQ54_24112017QH[ENGLISH].pdf (English translation)
Regarding PIT incurred by a foreigner who earns incomes from 2 places
Official letter No. 2644/CT-TTHT dated April 9th, 2018 of the Department of Taxation of Ho Chi Minh city regarding personal income tax (PIT)
According to Clause 3 Article 21 of Circular No. 92/2015/TT-BTC , with regard to a foreigner who is assigned to Vietnam to work by the parent company, if he receives salary from both places, every quarter he has to directly declare and pay PIT on the income paid by the parent company, using form No. 02/KK-TNCN.
At the end of each year, such foreigner has to summarize his global incomes in order to declare and make tax accounting according to form No. 02/QTT-TNCN (if he is the resident in Vietnam).
CV2644_09042018CTHCM[VLO].pdf (English translation)
Requirements of regulation conformity certification with regard to information technology products
Official letter No. 2305/BTTTT-CVT dated July 17th, 2018 of the Ministry of Information and Communications regarding registration for inspection of quality of products, goods subject to the specialized management of the Ministry of the Ministry of Information and Communications
According to this Official letter, before January 1st, 2018, when enterprises carry out customs procedure, they have to present the Certificate of conformity with regulations (with regard to products, goods included in Annex I), or the written reception of publication of conformity with regulations (with regard to products, goods included in Annex II of Circular No. 04/2018/TT- BTTT).
If the aforesaid papers are not available, enterprises have to send a written commitment to customs authorities and the Vietnam Telecommunications Authority on the completion of procedures for certification of conformity with regulations /publication of conformity with regulations within 15 working days from the date of customs clearance.
From August 1st, 2018: When importing group-2 commodities under the specialized management of the Ministry of Information and Communications, enterprises have to present the registration for the quality inspection certified by the specialized inspection agency (the Vietnam Telecommunications Authority) when they carry out procedures for goods clearance according to Decree No. 74/2018/ND).
The application for registration for the quality inspection of commodities shall be carried out according to Clause 2a Article 7 of Decree No. 132/2008/ND-CP (which has been supplemented at Clause 3 Article 1 of Decree No. 74/2018/ND-CP).
Locations of reception of the registration for the quality inspection of commodities: the Vietnam Telecommunications Authority. Of which, in Ha Noi, it is Verification and Certification Center 1; in Ho Chi Minh city it is Verification and Certification Center 2; and in Da Nang it is Verification and Certification Center 3.
CV2305_17072018BTTTT[VLO].pdf (English translation)
It is required to make construction detailed planning for key technical infrastructure zones
Official letter No. 13/BXD-QHKT dated April 23rd, 2018 of the Ministry of Construction regarding difficulties, problems in implementation of the Construction Law No. 50/2014/QH13
According to Clause 25 Article 3 and points g, h Clause 1 Article 24 of the Construction Law No. 50/2014/QH13 , construction projects of “key technical infrastructure zones” are considered particular-function zones and it is required to make and approve construction detailed planning.
Accordingly, construction projects of clean water plants, aquaculture areas, consolidated animal-raising zones are required to make and approve construction detailed planning.
Contents and order of, procedures for, formation and approval of construction detailed planning shall comply with the regulations of the Construction Law, Decree No. 44/2015/ND-CP and Circular No. 12/2016/TT-BXD.
However, currently, the Ministry of Construction is coordinating with relevant Ministries, branches in elaborating a draft law on amending, supplementing to the Construction Law, the Law on housing, the Law on real estate trading and the Law on urban planning. Accordingly, the draft proposes the exemption from making construction planning with regard to key technical infrastructure zones; land use norms shall be controlled through the general site plan. With regard to agricultural parks applying high technology, construction detailed planning shall be only made for areas having construction works rather than being made for areas of agricultural production.
Regarding VAT rate applicable to foreign companies’ agents that transport goods on containers in Vietnam
Official letter No. 2755/CT-TTHT dated April 11th, 2018 of the Department of Taxation of Ho Chi Minh city regarding value added tax (VAT) rate
According to the regulations at point d Clause 1 Article 9 of Circular No. 219/2013/TT-BTC , maritime services which are entitled to 0% VAT only include these services: ship towing; pilotage; sea rescue; wharves; freight handling; moorings; hatch control; hull cleaning; freight checking; registration.
Accordingly, in case a company signs agent contracts with foreign shipping companies in order to operate and engage in the business of transport of goods in tank containers Vietnam, it shall not be entitled to apply 0% VAT.
Upon collecting agent charges and service charges (travelling expenses, commutation charges), the Company has to issue value added invoice with the tax rate of 10%.
CV2755_11042018CTHCM[VLO].pdf (English translation)
Regarding environment protection tax on imported white oil
Official letter No. 2087/TXNK-CST dated April 27th, 2018 of the General Department of Vietnam Customs regarding environment protection tax policy applicable to white oil
According to Article 2 of Circular No. 159/2012/TT-BTC, goods imported for processing goods for export shall be exempt from environment protection tax. However, goods imported for manufacturing goods for export shall not be exempt from environment protection tax
Accordingly, in case an enterprise imports white oil for the purpose of manufacturing goods for export, it has to pay environment protection tax.
CV2087_27042018TCHQ[VLO].pdf (English translation)
Value Added Tax (VAT)
Regarding VAT rate applicable to counseling service provided and consumed in Vietnam
Official letter No. 2642/CT-TTHT dated April 9th, 2018 of the Department of Taxation of Ho Chi Minh city regarding value added tax (VAT) rate
According to Article 9 of Circular No. 219/2013/TT-BTC , services consumed in Vietnam are not entitled to apply 0% VAT even the service buyers are outside Vietnam.
Accordingly, in case a company signs a contract with a foreign customer to provide counseling service for activities which are performed in Vietnam, this service is consumed in Vietnam and therefore not entitled to apply 0% VAT (it shall be subject to 10% VAT).
CV2642_09042018CTHCM[VLO].pdf (English translation)
Regarding PIT incurred by a foreigner worker who is a resident in Vietnam
Official letter No. 20055/CT-TTHT dated April 17th, 2018 of the Department of Taxation of Ha Noi city regarding personal income tax (PIT) policy for a Japanese person who is a resident.
In case a foreigner is residing and working in Vietnam but he receives incomes paid by the parent company outside Vietnam, he has to directly declare and pay PIT on such incomes according to form 02/KK-TNCN issued together with Circular No. 92/2015/TT-BTC .
At the end of the year, the foreigner has to himself make PIT accounting according to form 02/QTT-TNCN issued together with Circular No. 92/2015/TT-BTC if he is not the entity that is eligible to authorize other entity to make PIT accounting.
PIT on the incomes paid by the parent company that has been paid outside Vietnam shall be deducted from PIT payable in Vietnam according to point e Clause 2 Article 26 of Circular No. 111/2013/TT-BTC .
In case the Company in Vietnam pays costs for making temporary residence card, charges for medical examination on behalf of the foreign worker, such amounts must be included in his PIT – liable incomes.
However, other amounts such as tuition fees for children of the foreign worker to study in Vietnam, lump-sum moving allowances, charges for issuance of work permit shall be exempt from PIT.
CV20055_17042018CTHN[VLO].pdf (English translation)
Civil Servants - Cadres
At least 10% of employees of public service providers shall be dismissed before 2021
Resolution No. 19-NQ/TW dated October 25th, 2017 of the Central Committee on continuing to renovate organizational and management structure, enhance quality and efficiency of public service provider
Under this Resolution, private sector involvement must be promoted, especially sectors, fields and localities that private sectors have capacity to involve in and do it well; mobilize and effectively use all resources for investment in development of public service market in a socialist-oriented market economy. The above-mentioned tasks must be done in a transparent and public manner, not for commercial purposes and ensuring equality between public service provider and private service providers.
By 2021, dramatically decrease the number of contact points and dissolve at least 10% of public service providers throughout the country. Dismiss at least 10% of employees earned from state budget compared to those in 2015. Terminate labor contracts inconsistent with regulations issued by public service providers, except financial autonomy service providers.
NQ19_25102017BCHTU[ENGLISH].pdf (English translation)
Policies on socio-economic development in Ninh Thuan province
Annoucement No. 223/TB-VPCP dated June 22nd, 2018 of the Office Government's conclusions given by deputy prime minister vuong dinh hue at the meeting about special policies for provision of assistance for Ninh Thuan province in socio-economic development and people’s life and business settlement during 2018-2023
Policies on socio-economic development of Ninh Thuan province
Aiming to provide assistance for Ninh Thuan province in socio-economic development, the Government applied these policies:
- Provision of 100% of reciprocal capital from the central government budget to ODA projects;
- Extension of the time limit for implementing Decision No. 11/2017/QD-TTg on Feed in Tariff policy by 2020;
- Approval for provision of funding for 6 projects of national importance in medium-term public investment plan during 2021 – 2025;
- Provision of 10% of the on-lent capital for some of the province’s important ODA projects.
TB223_22062018VPCP[ENGLISH].pdf (English translation)
Master plan of Nha Trang city (Khanh Hoa province) till 2025
Decision No. 1396/QD-TTg dated September 25th, 2012 of the Government on approving adjustment of the master plan of Nha Trang city, Khanh Hoa province, till 2025
This Decision takes effect from the date of its signing.
QD1396_25092012TTg[ENGLISH].pdf (English translation)
New regulations on border health quarantine
Decree No. 89/2018/ND-CP dated June 25th, 2018 of the Government on guidelines for implementation of the Law on infectious disease prevention and control regarding the border health quarantine
This Decree deals with health declaration, health inspection with regard to people and objects, including conveyances entering, leaving and transiting Vietnam, cargos imported/exported, biological products being transported across the border between Vietnam and other countries; border control measures for preventing the spread of infectious diseases; and border health quarantine units.
Accordingly, any entry/exit person that belongs to these cases shall be subject to the health inspection: A person subject to compulsory declaration of health; a person experiencing any abnormal health symptoms or having a body temperature increased during the medical examination; a person accompanying, in direct or close contact with the person who experiences abnormal health symptoms (Article 8).
In addition, operators of all conveyances are required to complete the declaration of health upon entry, exit or transit, except aircrafts and ships for which quarantine procedures have been completed at the first port of entry (Article 12).
With regard to cargoes imported, exported or in transit, the health declaration must be also carried out, except for cargoes which are in transit without unloading, cargoes subject to animal quarantine regulated by the Minister of Agriculture and Rural Development (Article 20).
This Decree takes effect from August 10th, 2018 and replaces Decree No. 103/2010/ND-CP dated October 1st, 2010.