Vietlaw Weekly Newsletter No. 374
Labour - Employment
Regarding entities participating in obligatory social insurance
Official letter No. 2740/BHXH-BT dated July 20th, 2018 of Vietnam Social Security regarding entities participating in obligatory social insurance
Currently, the obligatory social insurance regime is only apply to these entities (Clause 1 and Clause 3 Article 2, Clause 2 Article 21 of the Law on Social Insurance No. 58/2014/QH13 )
1. Cadres, state employees and servants;
2. Enterprise managers with pay;
3. Persons working under contracts of indefinite terms, labor contracts with fixed terms, labor contracts for seasonal jobs or a certain job with a term of full three months to under 12 months.
4. Persons working under labor contracts for seasonal jobs or a certain job with a term of full one month to under 3 months (this regulation is newly supplemented from January 1st, 2018).
Persons other than those mentioned above must not participate in obligatory social insurance and may participate in voluntary social insurance regime.
CV2740_20072018BHXH[VLO].pdf (English translation)
New regulations on complaints and denunciations in labour sector
Decree No. 24/2018/ND-CP dated February 27th, 2018 of the Government on providing for settlement of complaints about and denunciations of labour, vocational education, Vietnamese guest workers, employment, occupational safety and hygiene
This Decree is to regulate in details procedures for filing a complaint and denunciation in labour, employment, vocational education and Vietnamese guest workers.
Accordingly, one of the new points of this Decree is to allow complainants to be optional to bring the case to the court right at the initial time or after the first-time complaint is handled but the complainant does not agree with it or over the time limit for first-time complaint handling but the first-time complaint remains unhandled.
Under the earlier regulations in Decree No. 119/2014/ND-CP , it only allowed complainants to bring the case to the court when they do not agree with second-time complaint handling decision or over the prescribed time limit but the second-time complaint remains unhandled.
In case a complainant option to bring the case to the court right at the initial time or after the first-time complaint is handled but the complainant does not agree with it or over the time limit for first-time complaint handling but the first-time complaint remains unhandled, he/she shall file a lawsuit in the court in accordance with regulations of the Code of civil procedures.
If the complainant option to bring the case to the court when he/she does not agree with the second-time complaint handling decision or over the prescribed time limit but the second-time complaint remains unhandled, the complainant is entitled to file a lawsuit in the court in accordance with regulations of the Code of administrative procedures.
This Decree comes into effect from April 15th, 2018 and replaces Decree No. 119/2014/ND-CP dated December 17th, 2014 and regulations on complaints and denunciations by employees provided in Decree No. 75/2012/ND-CP dated October 3rd, 2012, Decree No. 76/2012/ND-CP dated October 3rd, 2012.
ND24_27022018CP[EN].pdf (English translation)
Enterprises employing under 10 workers shall be exempt from registration of their pay scale, payroll
Decree No. 121/2018/ND-CP dated September 13th, 2018 of the Government on amendments to the Government's Decree No. 49/2013/ND-CP dated May 14, 2013 on guidelines for the Labor Code in terms of wages
This Decree is to supplement regulations in order to clarify the purpose of establishment of labor productivity norms and supplement entities that are exempt from submitting its pay scale, payroll, and labor productivity norms to the authorities.
Accordingly, the establishment of labor productivity norms according to Article 8 of Decree No. 49/2013/ND-CP is used as the basis for giving product-based pay to employees.
Any enterprise that employs fewer than 10 workers shall be exempt from submitting its pay scale, payroll, and labor productivity norms to the labor authority of district where its business facilities are located.
This Decree takes effect from November 1st, 2018.
ND121_13092018CP[ENGLISH].pdf (English translation)
Advertising - Publishing
Regarding withholding tax on incomes from online advertising service
Official letter No. 3149/TCT-CS dated August 15th, 2018 of the General Department of Taxation regarding tax policy applicable to costs of online advertising
In case a company hires advertising positions on Google, Facebook which belong to the ownership of foreign organizations, the foreign parties shall be subject to withholding tax in Vietnam in accordance with the regulations of Circular No. 103/2014/TT-BTC.
Before making payment for service charges, the company shall be responsible for withholding, declaring and paying withholding tax, including value added tax (VAT) and EIT (enterprise income tax).
If costs of online advertising are used for business and production activities, have adequate payment invoices and documents in accordance with Article 4 of Circular No. 96/2015/TT-BTC , they shall be accounted into EIT – liable incomes.
Notably, if the foreign party does not provide invoices for the Company, it has to present the declaration and payment document of withholding tax as the basis for making cost accounting.
CV3149_15082018TCT[VLO].pdf (English translation)
New regulations on information system security in baking operations
Circular No. 18/2018/TT-NHNN dated August 21st, 2018 of the State Bank on information system security in baking operations
According to Article 5 of this Circular, banks have to set out information security regulations which shall at least contain basic contents as follows: Management of information technology assets; Management of human resources; Assurance of safety in terms of physical and installation environment; Access management; Management of information security incidents, etc. Such regulations must be reviewed at least once every year.
At the same time, banks have to establish or assign a department in charge of information security to perform the task of information security assurance and response to cybersecurity incidents and manage the center for cyber information security operation (Article 12)
It is required to apply anti-phishing authentication measures and methods for preventing and fighting against illegal alteration to websites which provide online transaction services and detecting and providing warning of suspected transactions, Denial of Service attack (DoS) and Distributed Denial of Service attack (DDoS) (Article 24).
Periodically, to carry out assessment of security system once every six months (for Level 3 information systems), once every year (for Level 2 information systems), once every two years (for Level 1 information systems (Article 41).
This Circular comes into effect from January 1st, 2019 unless otherwise prescribed in point b Clause 2 Article 12 which comes into force from January 1st, 2020.
TT18_21082018NHNN[ENGLISH].pdf (English translation)
How to determine whether a project is subject to the scope of regulation of the Law on bidding or not
Official letter No. 6104/BKHDT-QLDT dated August 31st, 2018 of the Ministry of Planning and Investment regarding guidelines on implementation of law on bidding
According to Point c Clause 1 Article 1 and Clause 44 Article 4 of Law on bidding No. 43/2013/QH13 , this Law also provides for projects on development investment financed by state, state-owned enterprises with level equal to 30% or more or less than 30% but more than 500 billion VND in total invested capital of each project.
Accordingly, projects on development investment financed the state's capital, state-owned enterprises’ capital which accounts for at least 30% or less than 30% but more than 500 billion VND in total invested capital of the projects belong to scope of regulation of the Law on bidding.
Notably, the aforesaid regulation only bases on value of state's capital, state-owned enterprises' capital directly contributed to total invested capital of a project rather than considering charter capital or capital contribution proportion of the state in the enterprise which is the project owner.
CV6104_31082018BKHDT[VLO].pdf (English translation)
Regarding loan interest costs upon suffering from losses from business activities
Official letter No. 5772/CT-TTHT dated June 15th, 2018 of the Department of Taxation of Ho Chi Minh city regarding tax policy
According to Clause 3 Article 8 of Decree No. 20/2017/ND-CP , total loan interest cost arising within a specific tax period of an enterprise that engages in related-party transactions must not exceed 20% of total net profit generated from business activities plus loan interest costs and depreciated costs arising within that period.
Therefore, under such regulations, an enterprise that engages in related-party transactions shall be only allowed to make cost accounting for loan interest costs when the total net profit plus loan interest costs and amortization costs arising within that period (aka the EBITDA indicator) is larger than 0 (there are profits).
In contrast, if the EBITDA indicator within the period is less than 0 (there are losses), total loan interest costs within the tax period shall not be deducted when determining incomes liable to enterprise income tax.
CV5772_15062018CTHCM[VLO].pdf (English translation)
Certificate of Origin (C/O)
Self-certification of goods origin shall be carried out regardless of agricultural or industrial products
Official letter No. 4992/BCT-XNK dated June 25th, 2018 of the Ministry of Industry and Trade regarding goods origin
According Clause 9 Article 25 of Decree No. 08/2015/ND-CP , enterprises may use electronic customs declaration without additional submission of the printed customs declaration when they apply for C/O for exports.
However, according to the Ministry of Industry and Trade’s opinions, because currently the looking up of electronic customs declarations on the customs system usually faces with errors resulting in the delay of time limit for settlement of dossiers of enterprises. As the result, in the application for issuance of C/O as prescribed in Article 15 of Decree No. 31/2018/ND-CP, it is still required the submission of the customs declaration printed from the electronic customs declaration.
With regard to the self-certification of origin as prescribed in Article 25 of Decree No. 31/2018/ND-CP, in case a trader meets some criteria for selection under international treaty to which Vietnam is a signatory or a party or criteria according to regulations of importing countries set forth by the Ministry of Industry and Trade at related legal normative documents, the trader may carry out the self-certification of origin of exported goods regardless of agricultural or industrial goods.
CV4992_25062018BCT[VLO].pdf (English translation)
Regarding import of insecticidal preparations
Official letter No. 2860/GSQL-GQ1 dated September 12th, 2018 of the General Department of Vietnam Customs regarding import of anti - mosquito coils
Upon import of insecticidal preparations, if the preparations belong to the cases mentioned in Article 49 of Decree No. 91/2016/ND-CP , enterprises have to apply for the import permit.
With regard to other cases, if the imported preparations had valid sale registration certificates, they shall be imported on demand in unlimited quantity or value and must not apply for a permit (Article 48 of Decree No. 91/2016/ND-CP ).
Forms of registration of sale of preparations are specified in Article 21 of the aforesaid Decree No. 91/2016/ND-CP .
CV2860_12092018TCHQ[VLO].pdf (English translation)
Regarding transportation freight arisen after goods have been imported to the first importing checkpoint
Official letter No. 5475/TCHQ-TXNK dated September 20th, 2018 of the General Department of Vietnam Customs regarding transportation costs and costs related to transport
Relating to the calculation of import duty on transportation freight, the General Department of Vietnam Customs requests Customs Departments of provinces and cities to carry out in accordance with the guidelines provided in Official letter No. 3581/TCHQ-TXNK dated June 20th, 2018.
Accordingly, it is not allowed to calculate import duty on freight for transportation of goods paid for activities arisen after the goods have been imported to the first importing checkpoint or failing to concurrently meet the conditions specified in Clause 1 Article 13 of Circular No. 39/2015/TT-BTC .
CV5475_20092018TCHQ[VLO].pdf (English translation)
Regarding duty exemption upon transfer of imported goods
Official letter No. 4272/TXNK-CST dated August 1st, 2018 of the General Department of Vietnam Customs regarding transfer of imported goods
According to point a Clause 22 Article 103 of Circular No. 38/2015/TT-BTC , in case an entity eligible for investment incentives does not import goods but instead buy goods exempt from import duty from another entity in Vietnam to form fixed assets, then it is still eligible for exemption from import duty and the seller is not required to pay tax arrears.
However, it is required to meet the conditions according to which the transfer price is not inclusive of import duty.
CV4272_01082018TCHQ[VLO].pdf (English translation)
Restaurants within hotels shall be exempt from the Certificate of food safety
Official letter No. 4088/ATTP-NDTT dated August 6th, 2018 of the Ministry of Health regarding guidelines on development of some regulations on food safety requirements
According to the new regulations at point g Clause 1 Article 12 of Decree No. 15/2018/ND-CP “Restaurants within hotels” shall be exempt from the Certificate of food safety. However, when the restaurants organize activities for events, mobile parties, they have to comply with the regulations on food safety in food services business.
“Industrial kitchens” (not registered as a food business) are exempt from the issuance of Certificate of food safety in accordance with point h Clause 1 Article 12 of Decree No. 15/2018/ND-CP . According the result, these establishments must not apply for the Certificate of food safety (even they wish to be granted the Certificate of food safety).
CV4088_06082018BYT[VLO].pdf (English translation)
Fee for intellectual property protection: VND 200,000/application
Notification No. 4769/TB-TCHQ dated August 14th, 2018 of the General Department of Vietnam Customs on collection of fees for customs inspection and supervision of imported and exported goods subject to intellectual property protection requirements
According to this notification, before submitting the application for intellectual property protection for imports and exports, enterprises have to pay fee to customs authorities in order to serve inspection and supervision activities .
Fee rate is VND 200,000 per an application, applicable from April 14th, 2018, shall be paid to account of each customs authority.
Customs inspection and supervision fees which have already been paid shall not be reimbursed in the event of refusal of the application for customs inspection and supervision as provided by regulations in force.
TB4769_14082018TCHQ[ENGLISH].pdf (English translation)
Promulgation of National technical regulation on lubricating oils for internal combustion engines
Circular No. 06/2018/TT-BKHCN dated May 15th, 2018 of the Ministry of Science and Technology on promulgation a Circular on “National technical regulation on lubricating oils for internal combustion engines”
The National technical regulation on lubricating oils for internal combustion engines, QCVN 14:2018/BKHCN, is promulgated together with this Circular
This Regulation provides for maximum limits of specifications and requirements for control of quality of lubricating oils for internal combustion engine.
This Regulation applies to organizations and individuals related to import, production, preparation, distribution and retail of lubricating oils for internal combustion engines in Vietnam.
“Lubricating oil for internal combustion engines” regulated in this Regulation means an oil used for 4-stroke and 2-stroke internal combustion engines and including:
- Mineral oil means an oil obtained from petroleum by distillation and treatment.
- Synthetic oil means an oil produced from chemical reactions of original compounds.
- Semi-synthetic oil means a mixture of mineral oil and synthetic oil.
According to item 4 of this Regulation, lubricating oil that is produced, prepared and imported must be undergone the declaration of conformity and must bear the conformity mark (CR) before being marketed.
This Circular takes effect from July 30th, 2018
From December 15th, 2018, lubricating oils for internal combustion engines that are produced, prepared and imported on the market must apply this Regulation.
Lubricating oils for internal combustion engines that are produced, prepared, imported and sold on the market before December 15th, 2018 shall continue to be sold until June 15th, 2020.
TT06_15052018BKHCN[ENGLISH].pdf (English translation)
Tax of Personal Income
Regarding PIT on house rents included in bonuses
Official letter No. 3256/TCT-TNCN dated March 23rd, 2018 of the General Department of Taxation regarding personal income tax (PIT) policy
According to Clause 2 Article 11 of Circular No. 92/2015/TT-BTC , the house rents paid by an enterprise on behalf of employees shall be subject to PIT according to the actual amount paid on behalf but they must exceed 15% of total taxable income.
According to Official letter, in case an enterprise pays bonuses to an employee in which including the house rents, the house rents included in the bonuses shall be also subject to PIT but they must not exceed 15% of total taxable income in accordance with the aforesaid regulations.
CV3256_23082018TCT[VLO].pdf (English translation)
New regulation on dam and reservoir safety management
Decree No. 114/2018/ND-CP dated September 4th, 2018 of the Government on dam and reservoir safety management
This Decree provides for management of dam and reservoir safety in respect of dams at the height from 5 m and above or reservoirs with full capacity of from 50,000 m2 and above and safety of dam lowlands.
This Decree applies for domestic and foreign organizations and individuals involved in activities related to dams and reservoirs in the territory of the Socialist Republic of Vietnam.
This Decree takes effect from the date of its signing and replaces Decree No. 72/2007/ND-CP dated May 7th, 2007.
To abolish Clause 1, Clause 2, Clause 3, Clause 4, Clause 11 Article 4 of Decree No. 67/2018/ND-CP dated May 14th, 2018; Decision No. 285/2006/QD-TTg dated December 25th, 2006.
ND114_04092018CP[ENGLISH].pdf (English translation)
Electricity - Energy
Amendment to the mechanism for provision of assistance in development of wind power projects in Vietnam
Decision No. 39/2018/QD-TTg dated September 10th, 2018 of the Prime Minister on amending several articles of Decision No.37/2011/QD-TTg dated June 29, 2011 of the Prime Minister on mechanism for provision of assistance in development of wind power projects in Vietnam
This Decision is to abolish some articles relating to the mechanism for provision of assistance in development of wind power projects in Vietnam regulated in Decision No. 37/2011/QD-TTg .
This Decision takes effect from November 1st, 2018.
QD39_10092018TTg[ENGLISH].pdf (English translation)
Requirements of certification of animal disease-free zones and establishments
Circular No. 14/2016/TT-BNNPTNT dated June 2nd, 2016 of the Ministry of Agriculture and Rural Development on providing for animal disease-free zones and establishments
This Circular stipulates requirements, procedures and application for certification of animal disease-free zones and establishments
Animal disease-free zone or establishment refers a zone (an urban district or a suburban district, town, province, city) or an establishment (an animal raising establishment or a commune, ward, town) where no case of diseases covered by the certificate of disease-free status occurs within a certain period of time corresponding to each disease and animal specifies and veterinary activities in which ensure disease control.
Competence to issue the certificates belongs to the Department of Animal Health of Vietnam (for zones) and Provincial departments in charge of managing veterinary medicine (for establishments).
Any zone or establishment that are recognized to be an animal disease-free zone or establishment shall be eligible to apply for certificates of Vietnamese Good Animal Husbandry Practices (VietGAHP) or Vietnamese Good Aquaculture Practices (VietGAP); get priority in commercial promotion or product promotion programs and some other entitlements.
This Circular takes effect from July 19th, 2016.
To replace Decision No. 66/2008/QD-BNN dated May 26th, 2008 and Article 3 of Circular No. 20/2011/TT-BNNPTNT dated April 6th, 2011.
TT14_02062016BNN[ENGLISH].pdf (English translation)
Economic – technical norms for dredging of marine works
Circular No. 44/2018/TT-BGTVT dated August 3rd, 2018 of the Ministry of Industry and Trade on issuing economic – technical norms for dredging of marine works
Economic – technical norms for dredging of marine works are applied to domestic and foreign entities, organizations and individuals related to the dredging and overhaul of shipping channels, internal waters and territorial waters within the seaport’s water area.
This Circular takes effect from October 1st, 2018.
TT44_03082018BGTVT[ENGLISH].pdf (English translation)
National technical regulation on lubricating oils for internal combustion engines
National technical regulation QCVN 14:2018/BKHCN dated May 15th, 2018 of the Ministry of Science and Technology on lubricating oils for internal combustion engines
This document provides for maximum limits of specifications and requirements for control of quality of lubricating oils for internal combustion engine.
This National technical regulation is issued together with Circular No. 06/2018/TT-BKHCN dated May 15th, 2018 which takes effect from July 30th, 2018.