Vietnam Legal Newsletter on March 2023 (Real Estate, Tax)

Our Newsletter #8 would lead you on the following:

LEGAL UPDATE

I. Solutions for removing and promoting the real estate market’s safe, healthy and sustainable development

The Government issued Resolution No.33/NQ-CP dated 11 March 2023 on several solutions to remove difficulties and promote safe, healthy, sustainable development of the real estate market with some notable contents as follows:

  • The Resolution sets goals as follows:
    • Removing difficulties and obstacles, especially in institutions, organization of implementation and capital sources for the real estate market;
    • Promoting the development of the real estate market, increasing supply and at the same time adjusting the structure of real estate market products more rationally, focusing on the development of social housing, workers’ housing, housing suitable to the people’s income; and
    • Monitoring and supervising effectively the market status to promptly take appropriate measures and solutions to prevent the market from “hot development” or “freezing”, spreading rumors and speculations to hike real estate prices for illicit profits, causing an imbalance between supply and demand and ensure healthy operation according to the market mechanism.
  • The main tasks and solutions for corporate bond source:
    • Directing and guiding capital-raising activities (including bond issuance) of real estate trading enterprises on the stock market to comply with the law;
    • Controlling capital-raising activities of real estate trading enterprises on the stock market to prevent speculation, price manipulation and hiking. At the same time, creating conditions, not hindering enterprises (with sufficient capacity and good and healthy business performance…) to raise capital for recovery and development;
    • Inspecting and supervising the compliance with the law on issuance, investment and provision of services on corporate bonds, especially private placement of bonds by real estate enterprises and credit institutions related to real estate enterprises, enterprises with large bond issuance volume, high-interest rates, loss-making enterprises and bond issuers without collateral; and
    • Studying and proposing synchronous policies and solutions to develop the corporate bond market in a safe, healthy, and sustainable manner.
  • This Resolution was issued to remove difficulties for the real estate market in Vietnam. Accordingly, the Government needs implement this Resolution carefully and with a plan, coordinate closely and in detail with ministries, branches, central authorities, localities and relevant authorities and units, which will boost Vietnam’s real estate market in the near future.

II. Reducing land rental and water surface rental for subjects affected by the Covid-19 pandemic

The Prime Minister issued Decision No.01/2023/QD-TTg dated 31 January 2023 on the reduction of land rental and water surface rental for subjects affected by the Covid-19 pandemic with some notable contents as follows:

  • Subjects of application:
    • Organizations, units, enterprises, households and individuals directly is leased land or water surface by the State with annual land rental and water surface rental payment under competent state authorities’ decisions or contracts or certificates of land use rights and ownership of houses and other land-attached assets (“land or water surface lessee”);
    • The land or water surface lessees are ineligible for land rental or water surface rental exemption or reduction and land or water surface lessees are eligible for land rental or water surface rental reduction as specified in the land law and other relevant laws.
  • Land rental or water surface rental reduction levels:
    • Reduction of 30% of land rental and water surface rental payable in 2022; not reduce the amount of land rental, water surface rental owed in the previous years of 2022 and late payment interest (if any); and
    • The reduction in rent is calculated on the payable land rental and water surface rental in 2022 as prescribed by law. In case the land or water surface lessee is entitled to a reduction in land rental or water surface rental according to regulations and/or deduction of compensation and ground clearance in accordance with the law on land rental and water surface rental, 30% reduction of land rental, water surface rental is calculated on the payable land rental or water surface rental (if any) after the reduction and/or deduction as prescribed by law.
  • Dossiers of request for land rental or water surface rental reduction
    • A written request for land rental or water surface rental reduction for 2022 made according to the Form provided in Decision 01/2023/QĐ-TTg; and
    • A copy of the land or water surface lease decision, land or water surface lease contract, or certificate of land use rights and ownership of houses and other land-attached assets issued by a competent state authority.
  • Procedures for land rental or water surface rental reduction
    • The land or water surface lessee shall submit 01 set of dossiers of request for land rental or water surface rental to a tax authority, an economic zone management board, a hi-tech park management board, or other authority under the law from the effective date of this Decision to the end of 31 March 2023;
    • Based on the dossier of request for land rental or water surface rental reduction submitted by a land or water surface lessee, within 30 days after receiving a sufficient dossier, a competent authority shall determine the reduced land rental or water surface rental amount and issue the decision on land rental or water surface rental reduction under the law on land rental or water surface rental collection and the law on tax administration.

III. Obligation to pay value-added tax when providing services abroad

The Tax Department of Hanoi City issued Official Letter No. 4423/CTHN-TTHT dated 09 February 2023 on the value-added tax obligations when implementing projects abroad. Accordingly, the Tax Department responded to Official Letter No. 23.01/2023/CV-CK of CK Engineering Vietnam Co., Ltd (“the Company”) having problems determining value-added tax (“VAT”) obligations when implementing a project abroad with the following comments:

  • Under Article 9 of Circular 219/2013/TT-BTC in case the Company has construction and installation activities abroad for a foreign organization (without a permanent establishment in Vietnam) if the Company meets the conditions regulated in Article 9.2 of Circular No. 219/2013/TT-BTC, the VAT rate of 0% shall be applied.
  • In addition, when the service provision takes place both in Vietnam and outside Vietnam, but the service contract is signed between two taxpayers in Vietnam or has a permanent establishment in Vietnam, the tax rate of 0% applies only to the value of services performed outside of Vietnam according to Article 9.1 of Circular 219/2013/TT-BTC. In case, the contract does not specify the value of services performed in Vietnam separately, the taxable price is determined according to the ratio (%) of costs to the total cost incurred in Vietnam. The company in Vietnam must have documents proving the services provided outside Vietnam.
  • Exported goods and services are goods and services sold or supplied to organizations and individuals abroad and consumed outside of Vietnam; sold and supplied to organizations and individuals in non-tariff zones; goods and services provided to foreign customers under the law. Output contracts signed between the Company and foreign customers in the case of export if the conditions in Article 9.2 of Circular 219/2013/TT-BTC are satisfied.
  • The Company based on the actual situation, compared with the provisions of the law cited in this Official Letter 4423/CTHN-TTHT to comply with the regulations.

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PUBLISHED VIDEO

BLawyers Vietnam’s lawyers would like to provide 4 following issues:

1. Requirements for the investor to suspend the investment project
2. Requirements for the investor to suspend the investment project
3. Required documents
4. Penalties if failing to notify suspension of the investment project

UPCOMING EVENTS

DISCUSSION ON REGULATIONS REGARDING DISPUTE SETTLEMENT BY ARBITION

Date of Event: From 23 March 2023 to 14 April 2023

Location: Ho Chi Minh City

Hosting Organizations:

  • VIAC
  • Collab unit

For more information, see at: Chuỗi hoạt động: Bàn Luận Về Quy Định Liên Quan Đến Giải Quyết Tranh Chấp Bằng Phương Thức Trọng Tài | VIETNAM INTERNATIONAL ARBITRATION CENTER (viac.vn)

For downloading: 

Newsletter #8 (EN version)

Maybe you are interested in reading other Newsletters of BLawyers Vietnam: Newsletter on January 2022 / Newsletter on December 2022 

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