Our Vietnam legal update #154 would lead you on 03 legal issues:
I. Regulations on enforcement of the Civil Code about security for performance of obligations
On 19 March 2021, the Government issued Decree No. 21/2021/ND-CP to regulate the enforcement of the Civil Code about security for performance of obligations, takes effect on 15 May 2021, with the following contents:
- One obligation can be secured by many types of security or many different properties. When there is a breach of obligation and there is no prior agreement, the types of security are used as follow:
- The obligation secured by many types of security: the secured party choose one type of security or choose to use all.
- The obligation secured by many properties: Any property can be used to secure the breaching obligation.
- In case the collateral used to secure a different obligation or to perform another civil transaction which the secured party hold the origin of the relating Certificate, the secured party must give the third party in the aforementioned obligation, transaction the origin of the relating Certificate to finish the transaction as regulated by law.
- The Investors can use their investment projects, which is not forbidden to transfer by the Investment Law or other Law, as a security for performance of obligations.
- When the mortgagor exercises his/her right to invest in the mortgaged property to increase its value, the increased value is included in the mortgaged property. The investment to the mortgaged property must be agreed on by the mortgagee and he/she has the right to terminate the investment if it makes the mortgaged property decrease in value.
- When in a mortgaged property, another property raises up or increases in value by investment, and there is no prior agreement, the mortgage disposal of the invested property is performed as follow:
- If the new property raises up and is separable from the mortgaged property and does not make the mortgaged property decrease in value compared to the pre-invested state, the mortgage disposal will be performed on the mortgaged property only.
- If the new property raises up and is not separable from the mortgaged property, the mortgage disposal will be performed on the two of them.
II. Criteria for identifying hi-tech enterprises
On 16 March 2021, the Prime Minister issued Decision No. 10/2021/QD-TTg on prescribing criteria for identifying hi-tech enterprises. In addition to the criteria which is regulated in the Law on High Technologies 2008, hi-tech enterprises must also meet the following criterial:
- Revenue from high-tech products must reach at least 70% of the total annual net revenue subtract the input value of the enterprise.
- Minimum percentage for research activity and enterprise development:
No. | Types of enterprise Percentage of total expenses over total net revenue subtract input value | Percentage of participating workers over total number of workers
1 | Total funding sources of VND6,000 billion or more and 3,000 workers or more | 0,5% | 1%
2 | Not belong to type 1 and have total funding sources of VND100 billion and more than 200 workers | 1% | 2.5%
3 | Other cases | 2% | 5%
III. Guiding the finalization of PIT
On 12 March 2021, the Ministry of Finance issued Official Letter No. 636/TCT-DNNCN on guiding the PIT finalization with the following contents:
- Subjects of tax finalization:
- Residents earn income from salaries or wages (“Income”), if there are additional taxes payable or overpaid taxes and request a refund or offset against the next tax period;
- Residents have been present in Vietnam for fewer than 183 days in the first calendar year but more than 183 days in 12 consecutive months from the arrival date; or a person is foreigner working in Vietnam;
- Foreign individuals who terminate their labor contract at Vietnam;
- Income payers; or
- The one who is authorized to finalize PIT.
- Subjects of not finalizing PIT:
- Individuals whose payable tax amount after the final settlement of each year is from VND50,000 or less or the payable tax amount is smaller than the temporarily paid tax amount without claiming tax refund or offset against the next tax period;
- The individual whose income is signed on a labor contract of 03 months or more in a unit and has other source of monthly income in other places in the year not exceeding VND10 million and has been deducted PIT according to the rate of 10% and there is no requirement for tax finalization with this income;
- An individual whose life insurance is purchased by an employer (except voluntary pension insurance), other optional insurance with accumulated premium that the employer or insurance company has deducted personal income tax at the rate of 10% of the premium amount; or
- Salary payers do not generate income.
- The PIT exemption for a taxpayer is VND11 million/month (VND132 million/year) and dependent exemption is VND4.4 million/month.
- The deadline for submission of tax finalization declaration dossiers is the last day of the 3rd month from the end of the calendar year or fiscal year (for organization) and the last day of the 4th month from the end of the calendar year (for individual).
Maybe you are interested in reading other updates: 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 1) | January 2021 (Part 2)