Vietlaw Weekly Newsletter No. 366
It is prohibited from signing invoices with carved signature seals
Official letter No. 2515/TCT-CS dated June 22nd, 2018 of the General Department of Taxation regarding the use of carved signature seals on invoices
According to Clause 1 Article 19 of the Law on accounting No. 88/2015/QH13, accounting vouchers must be signed with ink pen; It is prohibited from signing accounting vouchers with carved signature seals.
Invoices are also considered to be accounting records (Clause 1 Article 20 of the Law on accounting No. 88/2015/QH13). As the result, in principle, enterprises are not allowed to use carved signature seals to append on invoices.
CV2515_22062018TCT[VLO].pdf (English translation)
New regulations on government guarantee issuance with regard to loans provided for enterprises
Decree No. 91/2018/ND-CP dated June 26th, 2018 of the Government on government guarantee issuance and management
In comparison with the earlier regulations, this Decree amends conditions for issuance of government guarantees to enterprises for implementing investment projects.
Accordingly, in order to be given government guarantees, enterprises must have been continuously operating for at least 03 years and have no overdue debt at the date of application for a government guarantee (Article 5).
However, this Decree removes some conditions such as: it is required to purchase insurance to insure repayment of 100% of debts in case the income from project's operations is not enough to service the enterprise’s debts; or it is required to a written commitment with the certification of authorized person of the parent company or organizational or individual entity that holds 65% of the charter capital or above that they shall fulfill repayment obligations if the obligor defaults.
Regarding procedures for issuance of government guarantees, the new regulations require enterprises to open an account for the project obtained the government guarantee at a commercial bank that has a credit rating equal to or one level lower than the sovereign credit rating (Articles 22, 23).
This Decree takes effect from July 1st, 2018.
This Decree replaces the Government’s Decree No. 04/2017/ND-CP dated January 16th, 2017, regulations in Clause 1 Article 3, Clause 2 Article 4, Article 6, Article 9 Chapter I, Section 2 Chapter II, Section 2 Chapter III and Chapter IV on government-backed bonds of the Government’s Decree No. 01/2011/ND-CP dated January 5th, 2011.
ND91_26062018CP[ENGLISH].pdf (English translation)
Amendments to regulations on customs declaration and valuation
Decree No. 59/2018/ND-CP dated April 20th, 2018 of the Government on amendments to some articles of the Decree No. 08/2015/ND-CP dated January 21, 2015 of the Government providing specific provisions and guidance on enforcement of the customs Law on customs procedures, inspection, supervision and control procedures
This Decree is to amend, supplement to the provisions relating to customs declarants, entities required to follow customs procedures, priority given to enterprises, procedures for pre-determination of goods codes, bases for determination of value of exports, bases for inspection of manufacturing or production facilities of exports, etc.
Accordingly, one of the new noticeable points of this Decree is to allow the authorization of customs declaration with regard to goods imported for executing an investment project exempted from tax.
In addition, according to Clause 4 Article 1 of this Decree, it is exempt from customs procedure for items on the outbound, inbound and in-transit vehicles.
With regard to enterprises which are given priority given, they shall be exempted from inspection after completing customs clearance at the customs authorities’ offices, except the case stipulated in Clause 1, Article 78 of the Law on Customs.
Regarding “selling price” to be used as the basis for calculation of customs value of exports, it shall be determined according to the following methods: (a) the selling price stated in the sale contracts or commercial invoices; (b) the selling price of the identical or similar exported goods in the customs database; (c) the selling price of identical or similar exported goods, which are sold in the market of Vietnam; (c) the selling price collected by the customs authority.
In case enterprises request the pre-determination of codes of goods, they shall submit the application for pre-determination of codes within at least 60 days before the export or import.
Regarding inspection of manufacturing or production facilities of exports, this Decree adds some new cases subject to the inspection, such as: Import the commodities for processing, manufacturing exported products for the first time; there are changes in address, scale, and manufacturing capability without notifying customs authority; hiring the entire processing of goods for export, etc.
This Decree takes effect from June 5th, 2018.
ND59_20042018CP[ENGLISH].pdf (English translation)
New regulations incentive policy for development of linkages in production and consumption of agricultural products
Decree No. 98/2018/ND-CP dated July 5th, 2018 of the Government on regarding incentive policy for development of linkages in production and consumption of agricultural products
According to Article 7 of this Decree, enterprises that are in charge of leaders of linkages in production and consumption of agricultural products may receive a subsidy as 100% of cost of hiring consultants for establishing a linkage, provided that it shall not exceed VND 300 million.
A project on linkage in production and consumption of agricultural products may be eligible for getting a subsidy from state budget as 30% of total investment in machinery, equipment and construction of infrastructural facilities serving the linkage, including workshops, warehouses or yards serving the production, preparation, storage, processing and consumption of agricultural products. Total subsidy shall not exceed VND 10 billion (Article 8).
This Decree takes effect from August 20th, 2018 and abolishes Decision No. 62/2013/QD-TTg dated October 25th, 2013.
ND98_05072018CP[ENGLISH].pdf (English translation)
Cars - Motorcycles
Tyres used on dumpers shall be classified into Heading 4011.80
Official letter No. 2491/TCHQ-TXNK dated May 8th, 2018 of the General Department of Vietnam Customs regarding issues relating to classification of tyres
Refer to the List of Vietnam’s imports and exports issued together with Circular No. 65/2017/TT-BTC, rubber pneumatic tyres which are only used on dumpers designed for off-highway use other than for the transport of goods in mines shall be classified into Heading 4011.80. Their 8-digit HS codes depend on their rim sizes).
CV2491_08052018TCHQ[VLO].pdf (English translation)
Certificate of Origin (C/O)
Regarding difference between HS code on C/O and that in customs declaration
Official letter No. 4400/TCHQ-TXNK dated July 25th, 2018 of the General Department of Vietnam Customs regarding guidance on determination of HS codes for imported goods
With regard to the same goods but the foreign manufacturer declares HS code on certificate of origin (C/O) different from that imposed according to Vietnam’s laws, whether the C/O is accepted?
According to Article 26 of Circular No. 38/2015/TT-BTC , if the difference between HS code on C/O and the declared HS code does not affect nature of the imports, the customs office may consider accepting the validity of the C/O.
However, if the customs office has grounds to determine that the imports on the C/O are not the imports as declared, the customs office shall not consider accepting such C/O.
CV4400_25072018TCHQ[VLO].pdf (English translation)
It is required to clearly specify goods quantity and weight on printed C/O
Dispatch No. 1321/GSQL-GQ4 dated May 7th, 2018 of the General Department of Customs on regarding issues relating to C/O
Relating to the declaration of origin in the electronic C/O form D, the General Department of Vietnam Customs requests to carry out according to point 2 of Official letter No. 1888/TCHQ-GSQL dated April 10th, 2018.
With regard to paper-based C/O form D (printed C/O), goods quantity and weight must be clearly specified in accordance to provisions of the Agreement
CV1321_07052018TCHQ[ENGLISH].pdf (English translation)
Complaints - Denunciation
Law on denunciation 2019
Law No. 25/2015/QH14 dated June 12th, 2018 of the National Assembly on Denunciation
One of the new points of this Law is the supplement to regulations on prohibited acts such as obstructing the denouncer and settling denunciations in a negligently and unfair manner.
In addition, this Law also enlarges scope of protection of a denouncer. Accordingly, every denouncer and his/her relative shall be entitled to have protection of his/her information; protection of his/her position, job, life, health, property, honor and dignity.
Time limit for settling denunciations shall be reduced from 60 days to 30 days, from 90 days to 60 days (with regard to a complicated case).
This Law takes effect from January 1st, 2019 and replaces Law on denunciation No. 03/2011/QH13 dated November 11th, 2011.
LL25_12062018QH14[ENGLISH].pdf (English translation)
Regarding refund of export duty on re-imported goods
Official letter No. 8861/BTC-CST dated July 25th, 2018 of the Ministry of Finance regarding import duty policy (2 trang)
According to the regulations at point a Clause 7 Article 114 of Circular No. 38/2015/TT-BTC , if exported goods have to be imported back to Vietnam, export tax that has been paid shall be refunded and import tax shall be cancelled.
However, the re-imported goods must meet these conditions “goods have not been used for manufacturing, processing, repaired overseas or used overseas”.
CV8861_25072018BTC[VLO].pdf (English translation)
Import tariff quota applicable to salt and avian eggs originated in ASEAN countries shall be removed
Circular No. 04/2018/TT-BCT dated April 2nd, 2018 of the Ministry of Industry and Trade on not applying import tariff quota to salt and avian eggs originated in ASEAN countries
This Circular is to announce the removal of tariff quota applicable to salt and avian eggs originated in ASEAN countries.
Accordingly, salt of heading 25.01 and avian eggs of heading 04.07 shall not be subject to the import tariff quota if they meet the regulations on goods origin in the ASEAN Trade in Goods Agreement and have certificate origin form D.
This Circular takes effect from May 17th, 2018.
TT04_02042018BCT[VLO].pdf (English translation)
Design - Architecture
Regarding PIT on income from provision of design consultancy service
Dispatch No. 2754/TCT-TNCN dated June 23rd, 2017 of the General Department of Tax regarding unbound invoices and PIT on income from design consultancy service contract
In case a company signs a contract to hire an individual to carry out the design consultancy service, if this person has been granted the independent practicing certificate and has obtained tax and business registration, income from the design consultancy service shall be subject to personal income tax (PIT) in accordance with regulations applied to the business individual provided at Circular No. 92/2015/TT-BTC . This service provider shall himself/herself declare and pay tax.
In contrast, if this person possesses an independent practicing certificate but has not applied for business registration, he/she shall be subject to PIT according regulations on PIT on income from salary, wage in Circular No. 111/2013/TT-BTC . The company shall withhold 10% PIT from any amount of at least VND 2 million before it is paid to the individual.
CV2754_23062017TCT[ENGLISH].pdf (English translation)
Education - Training
Regarding taxes paid on behalf of foreign contractors
Official letter No. 48506/CT-TTHT dated July 12th, 2018 of the Department of Ha Noi city regarding taxes paid on behalf of foreign contractors
According to this Official letter, if a Vietnamese University develops a joint training program with foreign universities and has to pay the foreign universities teaching remunerations to lecturers and management remunerations to the program managers, it shall withhold and pay withholding tax on behalf of the foreign contractors.
However, it is only required to pay enterprise income tax (EIT) at a percentage of 5% revenue. With regard to value added tax (VAT), it is exempt (because teaching, occupational training shall not be subject to VAT).
With regard to foreign lecturers and joint training program managers, they have to themselves declare and pay PIT in Vietnam. The Vietnamese University shall only notify the foreign universities of obligation to PIT payment of the foreign individuals according to the regulations at Clause 16 Article 2 of Decree No. 12/2015/ND-CP .
CV48506_12072018CTHN[VLO].pdf (English translation)
New criteria for identification of specialized vehicles to be exempt from import duty
Circular No. 14/2017/TT-BKHCN dated December 1st, 2017 of the Ministry of Science and Technology on criteria for identification of vehicles; specialized machinery, equipment, parts and supplies and list of scientific documents prescribed in clause 2 article 40 of the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016 on guidelines for the Law on export and import duties
This Circular provides for criteria for identification of vehicles; specialized machinery, equipment, parts and supplies as well as other commodities to be exempt from import duty, in particular:
1. Specialized vehicles used in technological line directly serving manufacturing activities of investment projects.
2. Specialized vehicles used for petroleum activities.
3. Vehicles in the technological line directly serving shipbuilding activities.
4. Specialized machinery, equipment, parts and supplies serving scientific research and technological development.
5. Specialized machinery, equipment, parts and supplies serving development of technology incubation and science and technology enterprise incubation.
6. Specialized machinery, equipment, parts and supplies serving technological innovation.
In addition, this Circular also promulgates List of scientific documents serving scientific research, technological development, science and technology enterprise incubation and technological innovation to be considered for duty exemption (Article 9).
Accordingly, with regard to specialized vehicles used in technological line directly serving manufacturing activities of investment projects, criteria for identification of import duty exemption basically are not changed. However, this Circular enlarges scope of duty exemption towards movable equipment having a particular structure to perform some certain functions in addition to the transport function.
This Circular takes effect from June 1st, 2018 and replaces Circular No. 01/2014/TT-BKHCN dated February 18th, 2014.
TT14_01122017BKHCN[ENGLISH].pdf (English translation)
Projects formed from the splitting of an enterprise shall not be eligible for EIT incentives
Official letter No. 48505/CT-TTHT dated July 12th, 2018 of the Department of Taxation of Ha Noi regarding enterprise income tax (EIT) incentives for projects invested in industrial zones
According to Clause 3 Article 10 of Circular No. 96/2015/TT-BTC , projects of new investment in industrial parks eligible for EIT incentives shall not include projects formed from the splitting, separation, merger or transformation of enterprises.
Accordingly, projects formed from the splitting, separation, merger or transformation of enterprises, even execution locations are within industrial parks, shall not be eligible for tax incentives.
In case a foreign investor initially applies for an investment certificate for a project in an industrial park, then registers to establish a company in order to execute the project, if such conditions as “the industrial park does not belong to areas with socio-economic advantages”, “the project is not formed from the splitting, separation, merger or transformation of enterprises”, “the company fully make cost accounting” and “the company pays tax as declared” are met, the project shall be also eligible for tax incentives.
Currently, tax incentives given to new investment projects in industrial parks are still tax exemption for 2 years and 50% tax reduction for the next 4 years (Article 6 of Circular No. 151/2014/TT-BTC).
CV48505_12072018CTHN[VLO].pdf (English translation)
Regarding EIT incentives for FDI enterprises
Official letter No. 26768/CT-TTHT dated May 4th, 2018 of the Department of Taxation of Ha Noi city regarding enterprise income tax (EIT) incentives
According to Article 4 of Circular No. 83/2016/TT-BTC , from December 27th, 2015, projects of new investment are only entitled to EIT incentives if the conditions on fields or areas eligible for incentives are met and there is no particular incentive for projects of foreign direct investment (FDI) enterprises.
Accordingly, in case an FDI enterprise executes a project of new investment, if the conditions on fields or areas eligible for incentives are not met, the FDI enterprise shall not be eligible for EIT incentives.
CV26768_04052018CTHN[VLO].pdf (English translation)
Import and export duties
Goods imported from Guinea are not eligible for MFN duty rates
Official letter No. 2528/TCHQ-KTSTQ dated May 10th, 2018 of the General Department of Vietnam Customs regarding reply to a written request for application of import duty rates to wood items
According to the General Department of Vietnam Customs’ opinions, currently, the Republic of Equatorial Guinea is neither a member of the World Trade Organisation (WTO) nor has agreement on the most favoured-nation (MFN) and special preferential treatment in trade relations with Vietnam.
Accordingly, goods imported from Guinea, including wood items, are not eligible to enjoy MFN duty rates but they shall apply ordinary duty rates according to Decision No. 36/2016/QD-TTg .
CV2528_10052018TCHQ[VLO].pdf (English translation)
Law on cybersecurity
Law No. 24/2018/QH14 dated June 12th, 2018 of the National Assembly on Cybersecurity
This Law provides for protection of national security and public order in cyberspace; responsibility of relevant organizations and individuals
Accordingly, under Article 8 of this Law, there are many prohibited acts on cyberspace, such as: provision of false information for the purpose of causing public confusion or economic loss, obstructing regulatory bodies or law enforcers, violating lawful rights and interests of other organizations and individuals; enticing, persuading or tempting others to commits crimes; act of cyberattack, cyber terrorism, cyber espionage and cyber crimes; causing breakdown, attacking, infiltrating, overriding, interfering with, disrupting, paralyzing or sabotaging national security information systems; infiltrating a telecommunications network, the Internets, computer network, information systems, etc.
With regard to websites, web portals and social media pages, Article 26 of this Law bans from providing, posting or popularizing information which commits the regulations in Clauses 1, 2, 3, 4 and 5 Article 16 of this Law and other information that violates national security.
Domestic and overseas providers of telecommunications services, internet services and value-added services in Vietnam’s cyberspace have the responsibility to verify users’ information when they open digital accounts; protect confidentiality of users’ information and accounts; provide users’ information for professional cybersecurity forces upon request; stop providing or refuse to provide the aforementioned services for the organizations or individuals that post the violated information, etc.
Especially, Clause 3 Article 6 also requests overseas enterprises that provide telecommunications services, internet services and value-added services in Vietnam’s cyberspace have to open branches or representative offices in Vietnam. Data about private information, relationships of their service users or data created by their service users in Vietnam shall retain such data for a specific period of time defined by the Government.
This Law takes effect from January 1st, 2019.
LL24_12062018QH14[ENGLISH].pdf (English translation)
A bill of lading may be replaced by other equivalent transport documents
Official letter No. 1281/GSQL-GQ1 dated May 4th, 2018 of the General Department of Vietnam Customs regarding information on the bill of lading
According to point c Clause 2 Article 16 of Circular No. 38/2015/TT-BTC , a customs dossier of imported goods consists of the bill of lading or equivalent transport documents if goods are transported by sea, air, railroad, or multi-modal transport as prescribed by law (01 photocopy).
Accordingly, photocopy of the original bill of lading or photocopies of other equivalent transport documents if goods are transported by sea, air, railroad, etc. such as Surrendered Bill/ Telex Release/ Seaway Bill...are all accepted.
Relating to signature on the bill of lading, Article 160 of Vietnam Maritime Code No. 95/2015/QH13 regulates that signature on the bill of lading may be the signature of the carrier or master or a person acting on the carrier’s behalf.
In addition, in case the bill of lading lacks 1 or more particulars referred to in Article 160 but it still meets the requirements set out in Article 148 of Vietnam Maritime Code, the absence does not affect the bill of lading’s legal character.
CV1281_04052018TCHQ[VLO].pdf (English translation)
Amendments to 11 Laws pertaining to planning
Law No. 28/2018/QH14 dated June 15th, 2018 of the National Assembly on amendments to some articles concerning planning of 11 Laws
This Law is to amend, supplement to a number of articles pertaining to competence to and principles of formulation of planning in these Laws:
1. Law on Food Safety No. 55/2010/QH12
2. Law on Notarization No. 53/2014/QH13
3. Law on Pharmacy No. 105/2016/QH13
4. Law on Investment No. 67/2014/QH13
5. Law on Public Investment No. 49/2014/QH13
6. Law on Electricity No. 28/2004/QH11
7. Law on Chemicals No. 06/2007/QH12
8. Law on Science and Technology No. 29/2013/QH13
9. Law on Tobacco Control No. 09/2012/QH13
10. Law on Economical and Efficient Use of Energy No. 50/2010/QH12
11. Law on Children No. 102/2016/QH13
One of the noticeable points of this Law is the supplement of requirement upon formulating industrial parks and plants in the chemical sector.
Accordingly, locations of chemical industrial parks and chemical plants must be appropriate to properties and characteristics of chemicals, chemical production and storage technologies, and natural and socio-economic conditions in order to meet chemical safety requirements
This Law takes effect from January 1st, 2019.
LL28_15062018QH14[ENGLISH].pdf (English translation)
From July 1st, 2018: Statutory pay rate shall be increased to VND 1,390,000
Decision No. 1916/QD-TTg dated November 29th, 2017 of the Prime Minister on giving 2018 state budget estimates
This Decision is to give 2018 state budget estimates to Ministries, Ministerial agencies, Governmental agencies, other central agencies, Vietnam Electricity, Vietnam Tobacco Company and provinces, centrally-affiliated cities.
This addition, under this Decision, the Government also requests Ministries/ branches to adjust statutory pay rate from VND 1,300,000 per month to VND 1,390,000 million per month from July 1st, 2018.
This Decision takes effect from the date of its signing.
QD1916_29112017TTg[ENGLISH].pdf (English translation)
Tax of Contractor
Regarding withholding tax incurred by a parent company upon leasing machinery to subsidiary company
Official letter No. 49272/CT-TTHT dated July 16th, 2018 of the Department of Taxation of Ha Noi city regarding withholding tax policy
According to Article 1 of Circular No. 103/2014/TT-BTC, in case a parent company outside Vietnam earns income in Vietnam from leasing machinery to its subsidiary company, the parent company shall be subject to withholding tax.
If the parent company fails to meet the conditions for paying tax according to the declaration method, the subsidiary company shall be responsible for withholding, paying tax on behalf of the parent company according to the rates of 5% value added tax (VAT) and 5% enterprise income tax (EIT) (Article 12, Article 13 of Circular No. 103/2014/TT-BTC).
Regarding exchange rates used for conversion of revenue in a foreign currency for calculation of withholding tax, they shall be determined as follows: If the parent company has an account in Vietnam, the buying rate of the commercial bank where parent company’s account is opened shall be applied; In case the parent company does not have an account in Vietnam, the selling rate of the commercial bank where the subsidiary company’s account is opened shall be applied.
CV49272_16072018CTHN[VLO].pdf (English translation)
Regarding withholding tax on commissions on brokerage outside Vietnam
Official letter No. 2438/CT-TTHT dated April 2nd, 2018 of the Department of Taxation of Ha Noi city regarding tax policy
According to Clause 3 Article 2 of Circular No. 103/2014/TT-BTC, incomes from services provided and consumed outside Vietnam shall be exempt from withholding tax.
Concurrently, according to Article 1 of Circular No. 111/2013/TT-BTC , non-resident individuals shall only pay personal income tax (PIT) on income earned within the Vietnamese territory.
Accordingly, in case a foreigner is a non-resident individual who provides the brokerage service outside Vietnam for a Vietnamese enterprise, the brokerage commissions shall not be subject to withholding tax in terms of PIT.
CV2438_02042018CTHCM[VLO].pdf (English translation)
Textile - Garment - Footwear
Claim for reduction of MFN duty on bearing textile for production of conveyor is rejected
Official letter No. 5291/BTC-CST dated May 9th, 2018 of the Ministry of Finance regarding import duty on bearing textile for production of conveyor
Relating to import duty on bearing textile of nylon - polyamides belong to HS code 5407.10.29, according to the Ministry of Finance’s opinions, the current MFN duty rate of 12% has been maintaining sine 2012 up to now and it is uniformly applied to all woven fabrics of Heading 54.07.
As the result, if reducing the MFN duty rate applicable to the aforesaid textile for production of conveyor from 12% to 5%, it shall not be suitable to the rules of imposition of tariff schedules and duty rates regulated in Clause 5 Article 10 of the Law on import and export duties No. 107/2016/QH13 "Uniform imposition of duty rates upon goods of the same nature, composition, uses, or technical features".
Particularly, tyre cord fabric of heading 59.02 for production of tyre currently is entitled to apply the MFN duty rate of 5%; this goods item has physical nature (composition), technical standard different from bearing textile for production of conveyor. As the result, the imposition of different duty rates is reasonable.
Therefore, the Ministry of Finance still maintains the MFN duty rate of 12% (under Decree No. 125/2017/ND-CP ) rather than reducing it.
If enterprises wish to enjoy a lower duty rate, they may seek sources of import from countries/ areas that have signed Trade Agreements with Vietnam in order to be eligible to apply FTA duty rates.
CV5291_09052018BTC[VLO].pdf (English translation)
National technical regulation on surface water quality
National technical regulation QCVN 08-MT:2015/BTNMT dated December 21st, 2015 of the Ministry of Natural Resources and Environment on surface water quality
This National technical regulation provides for maximum permissible limits of surface water quality parameters.
This National technical regulation is issued together with Circular No. 65/2015/TT-BTNMT dated December 21st, 2015, which takes effect from March 1st, 2016.