Legal update on April 2021 (Part 1)

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Our Vietnam legal update #155 would lead you on 03 legal issues:

I. Guiding on enterprise registration

The Ministry of Planning and Investment (the “MPI”) issued the Circular No. 01/2021/TT-BKHDT about guiding on enterprise registration dated 16 March 2021 with the following contents:

  • Regulating 99 new forms are used in enterprise or household business registration procedures.
  • Within 90 days from the date Business Registration Office (the “BRO”) sends a notice for reviewing the information and legal status, the enterprise must compare, amend, update information and feedback, and the enterprise shall be responsible for validity and accuracy of registered information.
  • Organizations and individuals may request information stored on the system at the MPI, or in the BRO or the National Business Registration Portal and shall pay the fee according to the laws.

II. Financial management mechanisms applicable to investment projects in the form of public-private partnership (the “PPP Project”)

On 26 March 2021, the Government issued Decree No. 28/2021/ND-CP to regulate the financial management mechanisms applicable to the PPP project with the following contents:

1. The PPP project’s financial plan

  • Construction principles: shall reflect the legal costs and revenues fully; the financial goal of this plan must be based on the cash flows after taxes, the actual revenue excluding VAT; the used currency is Vietnam Dong.
  • Content: Total investment; investment funds; proposals for incentives and guarantees; profit on investor’s equity; estimated expenses during the operation of the project; …

2. Capital sources for implementing PPP project include investor’s equity capital, raising loan capital, corporate bond capital, and other legal funds to implement project.

3. Management, use, and payment of state capital in the implementation of the PPP projects

  • The PPP Contracting Authority (the “Contracting Authority”) sends 01 set of legal dossiers to the State Treasury – the place of opening account – for the first time before or at the same time requesting payment of the public investment capital; frequent expenditure capital; capital from legal sources for investment expenditures, frequent expenditures in PPP project.
  • The Contracting Authority prepares and sends to the State Treasury 01 set of dossiers requesting the payment of public investment capital in support of the construction of works and the infrastructure system.

4. Investment capital finalization for the works, the infrastructure system

  • After the completion of the PPP project and related works belongs to the PPP project, the finalization shall be executed.
  • The enterprise planned PPP project (the “Enterprise”) shall prepare and send dossiers for investment capital finalization for the works, and the basic system of the PPP project within the minimum time as follows:
    • Projects under the delegated authority of the National Assembly or the Prime Minister to grant investment policy decisions: 09 months;
    • Projects under the delegated authority of Ministers, heads of central authorities, and provincial People’s Councils: 06 months.

5. Performance for sharing of increased and decreased revenues:

  • The Contracting Authority requests the State Audit to audit the increased, decreased actual revenues of the project. For the increased revenues, the Enterprise sends to the State Budget within 60 days from the issued date of audit report from the State Audit. For the decreased revenue, the Competent Authority shall consider and decide to use the State Budget to pay within 60 days from the date of receipt of the dossiers.
  • Within 10 days from the submitted date of the annual tax finalization dossier from the Enterprise, the Enterprise shall send a written report to the Contracting Authority on the actual revenue of the fiscal year (if any).

III. Deductible expenses when determining the taxable income of CIT and PIT policy on the house rent paid by the enterprise on behalf of foreign employees

Tax Department of Binh Duong province issued Official Letter No. 2864/CTBDU-TTHT dated 22 February 2021 answering the Official Letter No. 22092020/KT-WSE of an enterprise with the following contents:

  • In case the labor contract signed between the Company and the foreign expert agreed that the Company shall pay the house rent for the foreign expert during the time working in Vietnam, the expenses have been paid to the isolated place is calculated in deductible expenses when determining the taxable income of CIT if having invoices, receipt of payment according to regulations.
  • The amount of money used to rent house, payment for electricity, water supply, and attached services (if any) for the house paid by the Company on behalf of the foreign employees is calculated in the taxable income of CIT according to the actual amount paid on behalf of employees but not exceeding 15% total taxable income (not including rent house) earned at the workplace regardless of income payer.

For down-loading: 

Legal Update #155 (EN version)

Maybe you are interested in reading other updates: March 2021 (Part 4)March 2021 (Part 3) | March 2021 (Part 2) | March 2021 (Part 1) | February 2021 (Part 2) | February 2021 (Part 1) | January 2021 (Part 5) | January 2021 (Part 4) | January 2021 (Part 3)January 2021 (Part 2)

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