Vietlaw Weekly Newsletter No. 370
List of 42 banks allowable to provide guarantees for future-acquired houses
Decision No. 2401/QD-NHNN dated November 15th, 2017 of the State Bank of Vietnam on proclamation of list of commercial banks that have full capacity to provide guarantees for future-acquired houses
This Decision is proclaim the List of 42 commercial banks that have full capacity to provide guarantees for future-acquired houses.
This List shall be amended, supplemented and proclaimed right at the time having changes.
This Decision takes effect from the date of its signing.
QD2401_15112017NHNN[VLO].pdf (English translation)
Requirement for notification of online e-commerce shopping websites shall be removed
Circular No. 21/2018/TT-BCT dated August 20th, 2018 of the Ministry of Industry and Trade on amending a number of articles of Circular No. 47/2014/TT-BCT dated December 5th, 2014 of the Ministry of Industry and Trade on management of e-commerce websites and Circular No. 59/2015/TT-BCT dated December 31st, 2015 of the Ministry of Industry and Trade prescribing the management of e-commerce activities via applications on mobile equipment
One of the new noticeable points of this Circular is the removal of the regulations on notifying online e-commerce shopping websites provided in Article 8 and registration for e-commerce website rating provided in Article 21 of Circular No. 47/2014/TT-BCT .
However, regarding subjects that have to register e-commerce service provision websites (Article 13), they include all traders or organizations having e-commerce websites which provide at least one of the following services: Service of e-commerce trading floor, online promotion service, online auction service. Under the earlier regulations, registrants are only traders or organizations operating in trade promotion or enterprise support.
In addition, regarding subjects must make notification of goods sale applications on mobile equipment (Article 10 of Circular No. 59/2015/TT-BCT), they are traders, organizations or individuals that have been granted tax identification numbers and own sale applications.
This Circular takes effect from October 18th, 2018.
TT21_20082018BCT[VLO].pdf (English translation)
Foreigners are not allowed to delegate tax accounting if they additionally earn incomes outside Vietnam
Official letter No. 2249/TCT-TNCN dated June 6th, 2018 of the General Department of Taxation regarding personal income tax (PIT) declaration and delegation
According to the regulations in Circular No. 111/2013/TT-BTC and the amendments at Circular No. 92/2015/TT-BTC , foreign workers that are residents in Vietnam are only allowed to delegate a Vietnamese company to make PIT accounting on their behalf if they do not additionally earn incomes outside Vietnam.
If such foreign workers additionally earn incomes outside Vietnam, they have to directly declare and pay PIT on such incomes and have to themselves make the tax accounting at the end of each year rather than being allowable to delegate the Vietnamese company make PIT accounting on their behalf.
CV2249_06062018TCT[VLO].pdf (English translation)
Import and export policies
New procedures for duty exemption, reduction, refund with regard exports, imports
Decision No. 1919/QD-TCHQ dated June 28th, 2018 of the General Department of Customs on procedures for tax exemption, tax reduction, tax fund, tax cancellation, overpaid taxes associated with exported and imported goods
This Decision is to promulgate procedures for receipt and settlement of applications for registration of list of duty-free goods; duty exemption procedures while clearance; procedures for duty exemption and duty refund with regard exports, imports.
Accordingly, with regard to the list of duty-free goods, this Decision allows enterprises to notify online list of duty-free goods. The e-customs system will automatically receive and grant duty-free code to each project. A duty-free project may have multiple e-lists of duty-free goods. The modification, adjustment to the list of duty-free goods shall be also carried out online.
However, with regard to the application for duty reduction, it shall not be received online for the reason that required documents in the application for duty reduction must be submitted 3 originals and 1 copy bearing certified true copy stamp.
Regarding duty refund, this Decision specifies that refund time limit for claims for refund before inspection is 6 working days and for claims for refund after inspection is 40 working days.
This Decision takes effect 15 days from the day on which it is signed.
To supersede Decision No. 1780/QD-TCHQ dated June 17th, 2016; part X of procedures for exemption of export or import duties in customs procedures applied to exported and imported goods issued together with Decision No. 1966/QD-TCHQ dated July 10th, 2015.
QD1919_28062018TCHQ[ENGLISH].pdf (English translation)
Bases for determination of consultancy costs and construction estimates
Official letter No. 27/BXD-KTXD dated August 9th, 2018 of the Ministry of Construction regarding determination of costs of construction investment consultancy and construction estimates
Relating to costs of construction investment consultancy and determination of construction estimates, currently they are carried out according to these regulations:
- Costs of bidding document preparation and bid evaluation in case of a consulting contract shall be carried out according to the norms announced in Decision No. 79/QD-BXD dated February 15th, 2017.
- Costs of construction design verification, costs of estimate verification equal (=) the rate (%) (promulgated in Table 17, Table 18 of Decision No. 79/QD-BXD) multiplied by (x) building cost (exclusive of VAT), in the total investment approved.
- In case the designing is made into a contract, the costs of construction design verification, the costs of estimate verification equal (=) the rate (%) (promulgated in Table 17, Table 18 of Decision No. 79/QD-BXD) multiplied by (x) building cost (exclusive of VAT) specified in the approved contract value.
- Costs of construction supervision, costs of equipment installation supervision and costs of construction survey supervision equal (=) the rate (%) (promulgated in Table 22, Table 23 and Table 24 of Decision No. 79/QD-BXD) multiplied by (x) building cost, equipment cost, survey cost (exclusive of VAT) in the approved building cost estimate or the approved construction survey cost estimate.
- The determination of construction estimate shall be carried out according to Article 9 of Decree No. 32/2015/ND-CP and Circular No. 06/2016/TT-BXD. With regard to certain building tasks that are not announced construction estimate norms by the authorities, the investor shall apply the norms of similar constructions or determine new construction estimate norms for being suitable.
Regarding tax declaration and payment upon receipt of shares as dividends
Official letter No. 3206/TCT-CS dated August 20th, 2018 of the General Department of Taxation regarding tax policy and invoice
According to the regulations in Clause 9 Article 26 of Circular No. 111/2013/TT-BTC , a person that receives shares as dividends might not declare and pay tax upon the receipt. When transferring capital (selling the shares), that person shall declare and pay both tax on the incomes from capital transfer and tax on the incomes from capital investment.
In which the tax on incomes from capital investment shall be declared and paid by the individual (the investor), the company shall not withhold and declare this tax.
With regard incomes from transfer of shares, they shall be subject to personal income tax (PIT) in terms of incomes from securities transfer (point b Clause 4 Article 2 of Circular No. 111/2013/TT-BTC ).
If the transferred shares belong to a public company at a Stock Exchange, the individual is not required to directly declare and pay tax at tax authority. Instead, the securities company or the commercial bank where the person opens his/her depository account/the asset management company entrusted by the individual to administer the investment portfolio shall declare tax (Clause 6 Article 21 of Circular No. 92/2015/TT-BTC .
CV3206_20082018TCT[VLO].pdf (English translation)
Certificate of Origin (C/O)
Regarding B/L with regard to goods in transit
Official letter No. 1726/GSQL-GQ4 dated June 11th, 2018 of the General Department of Vietnam Customs regarding issue relating to certificate of origin (C/O) form D
According to Article 21 Annex VII of Circular No. 22/2016/TT-BCT, if goods which are imported from the ASEAN nations into Vietnam are in transit in a third country, it is required to have the two-route Bill of Lading (B/L) or Through B/L.
If there is only the one-route B/L from the country where the goods are in transit to Vietnam, it is considered failing to meet the regulations of direct transportation and failing to meet the conditions for enjoyment of incentives.
CV1726_11062018TCHQ[VLO].pdf (English translation)
Regarding difference between HS code on C/O and that in customs declaration
Official letter No. 1652/GSQL-GQ4 dated June 6th, 2018 of the General Department of Vietnam Customs regarding difference between HS codes
According to Article 26 of Circular No. 38/2015/TT-BTC , if there is difference between HS code on C/O and that written in the customs declaration and such difference does not affect nature of the imports, the customs office may consider accepting the validity of the C/O. However, if the difference between HS code on C/O and that in the customs declaration results in the difference in nature of the goods, the C/O shall be rejected.
CV1652_06062018TCHQ[VLO].pdf (English translation)
It is only allowed to store goods in bonded warehouses for not more than 12 months
Official letter No. 2450/GSQL-GQ5 dated August 8th, 2018 of the General Department of Vietnam Customs regarding issues relating to bonded warehouses
According to Clause 1 Article 61 of the Customs Law No. 54/2014/QH13 , time limit for storing goods in bonded warehouses must not exceeding 12 months and such time limit may be extended once for not more than 12 months.
Duration for storing goods in bonded warehouses shall be counted from the date on which goods are sent to the bonded warehouses. The extension of such time limit shall be counted according to time of each declaration for sending goods into the bonded warehouses.
CV2450_08082018TCHQ[VLO].pdf (English translation)
Education - Training
Amendments to the Regulation on private preschools
Circular No. 13/2018/TT-BGDDT dated May 30th, 2018 of the Ministry of Education and Training on amendments to Article 14 of the Regulation on Organization and Operation of private preschools enclosed with the Circular No. 13/2015/TT-BGDDT dated June 30, 2015 by Minister of Education and Training
According to the amendments in this Circular, the maximum number of children of a private preschool education group or class is 70 (seventy). Under the earlier regulations, the maximum number was 50 children.
However, the private preschool education groups and classes must ensure the organizational structure, including: Head of the group or class; officer in charge of preschool education activities, teachers, employees and children.
In which, the officer must possess an intermediate professional education diploma in early childhood pedagogy or higher; have a good health; meet standards pertaining to the professional title and professional standards of a preschool teacher;
Regarding eligibility requirements for establishment, merger, full or partial division, suspension or dissolution of private preschool education groups and classes, to comply with the regulations of Article 10, Article 11, Article 12 and Article 13 of Decree No. 46/2017/ND-CP .
This Circular takes effect from July 1st, 2018.
TT13_30052018BGDDT[ENGLISH].pdf (English translation)
Export processing enterprises
Regarding VAT rate applicable to the service of installment of electric system for an EPE
Official letter No. 41341/CT-TTHT dated June 18th, 2018 of the Department of Taxation of Ha Noi city regarding tax policies
According to Clause 1 Article 9 of Circular No. 219/2013/TT-BTC , activities of work construction, installment conducted in non-tariff zones shall be eligible to apply 0% VAT.
Accordingly, in case a company signs a contract to install electric system for an export processing enterprise (EPE), the company shall be entitled to apply 0% VAT.
CV41341_18062018CTHN[VLO].pdf (English translation)
Regarding offshore remittance of profits
Official letter No. 57077/CT-TTHT dated August 15th, 2018 of the Department of Taxation of Ha Noi city regarding offshore remittance of profits
According to Article 4 of Circular No. 186/2010/TT-BTC, foreign investors are allowed to remit profits to their home countries provided that these conditions are met: they have completed financial obligations to the State of Vietnam, submitted audited financial statements and enterprise income tax finalization declarations and made notices on the profits remittance abroad before the profits remittance abroad is taken place.
Accordingly, the notices on the profits remittance abroad shall be carried out according to the forms issued together with Circular No. 186/2010/TT-BTC and on which specifying the amount of profit remitted abroad every year (in case profits accumulated for many years are transferred aboard).
The foreign investors shall themselves determine the amount of profits remitted abroad in accordance with the regulations of Circular No. 186/2010/TT-BTC.
Time for remitting profits abroad is at least 7 working days after the notice on the profits remittance abroad has been sent to direct managing tax office.
CV57077_15082018CTHN[VLO].pdf (English translation)
Regarding authorization to receive PIT refund of foreigners
Official letter No. 2848/TCT-TNCN dated July 20th, 2018 of the General Department of Taxation regarding procedures for refund of personal income tax (PIT)
A foreigner that has returned his/her home country may authorize a company in Vietnam to carry out procedures for PIT accounting and refund of overpaid PIT.
However, this person has to make an authorization letter in which specifying the authorization to carry out procedures for tax accounting, tax refund and receipt of the tax refund on his/her behalf concurrently such authorization letter must be consularly legalized (Clause 13 Article 2 of Circular No. 26/2015/TT-BTC).
With regard to the company taking the authorization, when carrying out procedures for tax refund, it has to submit a written commitment to fully transfer the tax refund to the foreigner according to the authorization letter.
CV2848_20072018TCT[VLO].pdf (English translation)
Regarding PIT incurred by employees who work outside Vietnam under their tenure
Official letter No. 41345/CT-TTHT dated June 18th, 2018 of the Department of Taxation of Ha Noi city regarding personal income tax (PIT) incurred by employees who work at overseas permanent agencies
If Vietnamese employees who work outside Vietnam under their tenure are determined the residents in Vietnam, PIT on their salary, allowances and other incomes shall be withheld according to the partially progressive tax table (Article 25 of Circular No. 111/2013/TT-BTC).
In contrast, if such employees are non-residents in Vietnam, their incomes shall be withheld PIT at the tax rate of 20%. However, they shall be exempt from making PIT accounting (Article 18 of Circular No. 111/2013/TT-BTC).
With regard to residents, at the end of each year, they have to make tax accounting if additional tax is incurred, tax refund is claimed, or overpaid tax is offset against tax in the next period. The delegation of tax accounting shall be carried out according to Clause 3 Article 21 of Circular No. 92/2015/TT-BTC .
CV41345_18062018CTHN[VLO].pdf (English translation)
Import and export policies
Regarding import duty on waste, rejects which are obtained from the export production process are sold domestically
Official letter No. 3156/TXNK-CST dated June 15th, 2018 of the General Department of Vietnam Customs regarding waste, rejects
Relating to tax policies applicable to waste, rejects of goods used for export production, the General Department of Vietnam Customs requests enterprises to study Article 71 of Circular No. 38/2015/TT-BTC and the amendments at Clause 49 Article 1 of Circular No. 39/2018/TT-BTC to carry out.
Under the above - mentioned provisions, when waste and rejects which are obtained from the process of production of goods for export are sold, consumed domestically, import duties shall be exempt but it is required to declare and pay value added tax (VAT), excise tax (if any), environmental protection tax (if any).
Declaration forms of waste and rejects which are obtained from the process of production of goods for export are sold, consumed domestically shall be carried out according to Form No. 04 Annex IIa (for electronic declaration) or Form No. 06/BKKTT/TXNK Annex VI (for direct declaration) issued together with Circular No. 38/2015/TT-BTC .
CV3156_15062018TCHQ[VLO].pdf (English translation)
Products which are derived from waste recycling shall be exempt from export duty
Official letter No. 3111/TXNK-CST dated June 14th, 2018 of the General Department of Vietnam Customs regarding tax policies applicable products of waste recycling and treatment to be exported
According to point b Clause 19 Article 16 of the Law on import and export duties No. 107/2016/QH13, exports that are products of waste recycling and treatment are exempt from export duty.
Documents and procedures for export duty exemption shall be carried out according to Article 31 of Decree No. 134/2016/ND-CP.
Criteria for identification of goods exempt from export duty are specified in Article 25 of Decree No. 134/2016/ND-CP and Official letter No. 2111/TXNK-CST dated April 27th, 2018.
CV3111_14062018TCHQ[VLO].pdf (English translation)
Regarding requirement for customs clearance of group 2 - information technology and communication products and goods
Official letter No. 2765/BTTTT-CVT dated August 21st, 2018 of the Ministry of Information and Communications regarding inspection of quality of products, goods subject to the management by the Ministry of Information and Communications
According to this Official letter, from August 1st, 2018, imported group-2 products subject to the specialized management of the Ministry of Information and Communications must be undergone the quality inspection in accordance with the regulations of Decree No. 78/2018/ND-CP.
Accordingly, the registration for inspection of quality of group-2 products must be carried out at the Vietnam Telecommunications Authority – the Ministry of Information and Communications at these addresses:
- In Ha Noi: Verification and Certification Center 1, the Viet Nam Telecommunications Authority. Tel: 024.37820992.
- In Da Nang: Verification and Certification Center 3, the Vietnam Telecommunications Authority. Tel: 0236.3897889.
- In Ho Chi Minh city: Verification and Certification Center 2, the Vietnam Telecommunications Authority. Tel: 028.39919066.
Group-2 products shall be granted customs clearance only when the importers present the written registration of quality inspection certified by the Vietnam Telecommunications Authority.
CV2765_21082018BTTTT[VLO].pdf (English translation)
Regarding withholding tax on transport freight
Official letter No. 57072/CT-TTHT dated August 15th, 2018 of the Department of Taxation of Ha Noi city regarding withholding tax on transport freight
In case a company hires a foreign contractor to transport exports from Vietnam to a foreign country, the total freight for the whole route (including the domestic route and the international route) shall be subject to withholding tax.
In which enterprise income tax shall apply the percentage of 2% upon revenue and value added tax shall the percentage of 3% of revenue (except for the case of eligibility to apply 0% VAT thanks to satisfaction of international transport conditions).
CV57072_15082018CTHN[VLO].pdf (English translation)
Pharmaceutical - Cosmetics
Export of drugs shall be exempt from license
Official letter No. 10712/QLD-KD dated June 8th, 2018 of the Ministry of Health regarding export of drugs
According to Clause 5 Article 60 of the Law on pharmacy No. 105/2016/QH13 , drugs and medicinal ingredients may be exported without being licensed by the Ministry of Health, except for rare, precious and special herbs subject to control, drugs subject to special control, medicinal ingredients that are psychotropic, narcotic ingredients, or precursors.
Concurrently, Decree No. 54/2017/ND-CP also does not compulsorily regulate that exported drugs must be granted a certificate of drug registration in Vietnam (except for narcotic drugs, psychotropic drugs, precursors, combined drugs that contain narcotic active ingredients, psychotropic active ingredients or precursors, medicinal ingredients that are narcotic active ingredients, psychotropic active ingredients or drug precursors).
Accordingly, upon exporting drugs, enterprises shall only directly carry out procedures at customs authority without a license granted by the Ministry of Health.
CV10712_08062018BYT[VLO].pdf (English translation)
Regarding loan interest costs in terms of related-party transactions
Official letter No. 57305/CT-TTHT dated August 16th, 2018 of the Department of Taxation of Ha Noi city regarding implementation of Decree No. 20/2017/ND-CP
According to Clause 3 Article 8 of Decree No. 20/2017/ND-CP , with regard to an enterprise that carries out related-party transactions, it is only allowed to make cost accounting for loan interest costs if they do not exceed 20% of total net profit plus loan interest costs and depreciated costs arising within that period.
The above – mentioned limit for making cost accounting for loan interest costs is applied to total loan interest costs arising within a specific tax period, regardless of the loan interest costs arisen from related parties or independent parties.
CV57305_16082018CTHN[VLO].pdf (English translation)
From July 1st, 2018: Pension, social insurance allowance shall be increased by 6.92%
Decree No. 88/2018/ND-CP dated June 15th, 2018 of the Government on adjustments of pensions, social insurance allowances and monthly allowances
According to Article 2 of this Decree, from July 1, 2018, the amount of pension, social insurance allowance and monthly allowance shall be increased by 6.92% in comparison with the amount received in June 2018.
The entities whose pension, social insurance allowance and monthly allowance are increased from July 1st, 2018 include:
1. Cards, public officials, workers, public employees and employees; soldiers, people’s police and cipher officers who are on monthly pensions;
2. Officers of communes, wards and commune-level towns who are on monthly pensions and allowances;
3. Those who are on monthly work-capacity loss allowance; those who are on monthly allowance as prescribed in Decision No. 91/2000/QD-TTg, Decision No. 613/QD-TTg;
4. Officers of communes, wards, commune-level towns who are on monthly allowance as prescribed in Decision No. 130/CP and Decision No. 111-HDBT;
5. Soldiers who are on monthly allowances as prescribed in Decision No. 142/2008/QD-TTg, Decision No. 38/2010/QD-TTg;
6. People’s police who are on monthly allowances as prescribed in Decision No. 53/2010/QD-TTg;
7. People's police on monthly allowances as prescribed in Decision No. 62/2011/QD-TTg;
8. Those who are on monthly occupational accident and disease benefits.
This Decree takes effect from July 1st, 2018.
ND88_15062018CP[EN].pdf (English translation)
Duties on used goods which have to be re-exported shall not be refunded
Official letter No. 4443/TXNK-CST dated August 7th, 2018 of the General Department of Vietnam Customs regarding refund of import duty
According to point c Clause 1 Article 19 of the Law on import and export duties No. 107/2016/QH13, import duties on imports which have to be re-exported to a foreign country or to a non-tariff zone shall be refunded.
However, import duties on the re-exported goods shall be refunded only when such goods have not been used or undergone working or processing (Clause 2 Article 19 of the Law on Law on import and export duties).
At the same time, the re-export of goods must be done by the initial importer or a person authorized by the initial importer (Point a Clause 1 Article 34 of Decree No. 134/2016/ND-CP).
CV4443_07082018TCHQ[VLO].pdf (English translation)
Powers and organizational structure of Vietnam Food Administration
Decision No. 2728/QD-BYT dated May 3rd, 2018 of the Ministry of Health on defining functions, tasks, powers and organizational structure of Vietnam food administration affiliated to the Minsitry of Health
The Vietnam Food Administration is an agency that is affiliated to the Ministry of Health, and meant to assist the Minister of Health in performing state management and organizing the implementation of laws on the field of food safety that is within the jurisdiction of the Ministry of Health and assigned to manage nationwide.
This Decision takes effect from the date of its signing and replaces Decision No. 4062/QD-BYT dated October 22nd, 2012