Our Vietnam legal update #146 would lead you on 03 legal issues:
I. New Decree provides guidance on enterprise registration
On 04 January 2021, the Government issued Decree No. 01/2021/ND-CP on enterprise registration, effective from 04 January 2021. In which, the notable changes are as follows:
- Enterprise code is also the number of units participating in social insurance of the enterprise;
- No more Business Registration Offices established in Ho Chi Minh City and Hanoi City. Instead, the Business Registration Office can set up points of receipt and returning of results in many different places in the provincial location.
- Cases of granting enterprise registration according to contingency procedures:
- Certification of enterprise registration according to the contingency process is the granting of enterprise registration not done through the National Enterprise Registration Information System.
- Certification of enterprise registration according to the contingency process is applied when one or more of the following cases occur:
- The National Enterprise Registration Information System is under construction and upgrading;
- The National Enterprise Registration Information System has technical problems; or
- War, riot, natural disasters and other force majeure.
- Adding the case of authorizing the Public postal service to carry out the business registration procedures.
- There is no time limit to suspend business for business households.
II. Guiding the implementation of the contents of the labor contract, the Collective Bargaining Council and jobs that impact adversely on the reproduction and child-rearing functions
Ministry of Labor, War invalids and Social Affairs issued Circular No. 10/2020/TT-BLDTBXH on 12 November 2020 effecting from 01 January 2021 with the notable contents as follows:
- The employee’s information in the content of labor contract no longer contains a written agreement on the conclusion of the labor contract of the legal representative for the employee from full 15 years old to under 18 years old or a written agreement of the employee under 15 years old who agrees for his legal representative to enter into a labor contract.
- Regulations on the protection of the business secret, technology know-how, as follows:
(i) The main contents of the agreement on the protection of the Business Secret, technology know-how:
- List of business secrets and technology know-how;
- Scope of using business secrets, technology know-how;
- Term of protection of business secrets and technology know-how;
- Methods of protecting business and technology know-how;
- Rights, obligations and responsibilities of employee and employer in the period of protecting business and technology know-how;
- Handling of breach of agreements to protect business secrets and technology know-how.
(ii) Procedures for disciplining and handling the employee’s breach of the agreement on the protection of the business secret, technology know-how as detecting for the time being and after the termination of the employment contract.
- Establishment, functions, obligations and operations of the collective bargaining council is specified.
- Determination of List of occupations and jobs that adversely affect the reproduction and child-rearing of male or female employee.
- Salary used as a basis for calculating severance pay and job loss allowance is the average salary under the labor contract in the preceding 06 months before the employee quits or loses his job, including:
- Salary by job or title;
- Salary allowances to compensate for factors of working conditions, complexity of work, living conditions, and level of labor attraction that the salary agreed in the labor contract has not been taken into account or incomplete calculation;
- Additional amount is paid regularly in each pay period according to regulations.
III. Contractor tax on foreign contractor income arising income in Vietnam
Tax Department of Binh Duong Province issued Official Letter No. 28694/CT-TTHT about tax policy on 18 December 2020 with the following content:
- If the foreign contractor (“FC”) arising income in Vietnam on the basis of contracts, agreements, or commitments between FC and a Vietnamese organization or individual, FC’s income is taxable income under the provisions.
- Regarding tax exemption and reduction for income from loan interest of FC under Double Taxation Agreements (“DTA”):
- The income not fully satisfying the conditions for tax exemption or reduction under the DTA shall not be exempted or reduced from tax.
- The income satisfying all the conditions for tax exemption or reduction under the DTA, FC must conduct procedure of notifying tax exemption or reduction according to Vietnam’s laws.