Our Vietnam Legal Update #175 would lead you on 03 legal issues:
I. Conditions for obtaining tax incentives for expanded investment projects
The General Department of Taxation issued Official Letter No. 2920/TCT-CS dated 03 August 2021 to guide on tax incentives policies for expanded investment projects. The main content is as follows:
- For an enterprise with an expansion investment project to obtain corporate income tax incentives, the expanded investment project must meet the criteria prescribed by laws on investment. The criteria are capital, business investment activities, investment location, investment time.
- In case an enterprise has an expansion to an investment project with its initial investment capital without increasing its investment capital, it is not defined as an expansion to the investment project.
II. Guarantee for the business investment of investors upon changes of laws
The General Department of Taxation issued Official Letter No. 2754/TCT-CS dated 27 July 2021 to guide on the guarantee for business investment upon changes of laws. The main contents are as follows:
- When a new law provides more favorable investment incentives, investors are entitled to obtain the new incentives for the remaining period of the incentive enjoyment of the project (except for special investment incentives for the investment projects as regulated by law).
- When a new law that provides less favorable investment incentives than those previously applied to the investor, investors shall keep obtaining the previous incentives for the remaining period of the incentive obtainment of the project.
III. Derivatives and derivatives market
The Ministry of Finance issued Circular No. 58/2021/TT-BTC dated 12 July 2021 on providing guidelines for some articles of Government’s Decree No. 158/2020/ND-CP dated 31 December 2020 on derivatives and derivatives market with the notable contents as follows:
- Trading, clearing, and settlement for derivative transactions, including Stock-index futures contracts and government-bond futures contracts.
- To conduct derivative transactions, investors are required to open trading accounts at trading members and margin accounts at clearing members that are designated by trading members.
- A fund management company may open 02 omnibus trading accounts are opened in its name to manage investment portfolios of trustors, including (1) 01 account used for serving domestic trustors; (2) 01 account used for serving foreign trustors.
- 01 trading account may be opened for each of securities investment funds or companies that it manages at each trading member. This account shall be opened in the name of the securities investment fund or company.
- A securities company established abroad may open 02 trading accounts at each trading member, including (1) 01 trading account is opened to serve its derivative proprietary trading; (2) 01 omnibus trading account is opened to provide derivative brokerage services for other foreign investors.
- Regulating on the rules for activating of members of Vietnam Exchange (VNX) and Vietnam Securities Depository and Clearing Corporation (VSDCC).
- A clearing member shall open cash margin accounts for investors in its name and shall separately manage the cash margin account of each investor. The clearing member shall open 01 securities margin account for each investor for managing positions, obligations to provide margin, margin assets, transferable assets, and making settlements for positions on the investor’s trading account.
- VSDCC shall carry out clearing for derivatives according to each account of the investor or clearing member according to the rule that corresponding positions of a derivative with the same maturity date on an account shall be considered and deducted by VSDCC for determining net position on that account.
- VSDCC is entitled to refuse novation for invalid transactions and notify HNX in some cases per law.
- Investors and clearing members are allowed to use both cash and securities as margins for their derivative transactions.
Maybe you are interested in reading other Legal Update of BLawyers Vietnam: August 2021 (Part 2) | August 2021 (Part 1) | July 2021 (Part 5) | July 2021 (Part 4) | July 2021 (Part 3) | July 2021 (Part 2) | July 2021 (Part 1) | June 2021 (Part 4) | June 2021 (Part 3) | June 2021 (Part 2) | June 2021 (Part 1)