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Legal answers
Who can buy duty free goods
Answered

Decree No. 100/2020 / ND-CP dated August 28 th , 2020 of the Government regulating the
business of duty-free goods, specifying the subjects and conditions for buying duty-free goods.
The document takes effect from October 15, 2020

Subjects and conditions for buying duty-free goods are: Persons who leave or transit after
completing exit or transit procedures, passengers on international flights leaving from Vietnam or
People waiting for exit can buy duty-free goods. Include:

(1) people exiting or in transit through international land border checkpoints;  International
intermodal rail station border gates, class 1 seaports and international civil airport border gates
may purchase duty free goods at duty-free shops located in isolated areas. (2) People waiting for
exit can buy duty-free goods at local duty-free shops. Duty-free goods are received at the pick-up
counter in the quarantine area at the international checkpoint where the passenger exits. (3)
Foreign tourists traveling in groups by sea, holding a passport or international travel document
are entitled to purchase duty-free goods at a seaport type 1, domestic duty-free shop. In case of
buying duty-free goods domestically, tourists may receive the goods at the receiving counters in
the quarantine area at the class 1 seaport checkpoint where the tourists leave.

In addition to the place of receiving goods specified in this Clause, customers who
purchase goods specified at Points 1, 2 and 3 above (except for customers buying goods on
international flights leaving from Vietnam) may receive goods overseas.  This is the new
regulation to be added in Decree 100/2020/ND-CP in 2020.

In addition, other buyers of duty-free goods such as passengers on international flights
departing from Vietnam, persons on entry, and subjects enjoy privileges and immunities in
Vietnam… remain the same as before.

Guidance on the declaration of CIT payable reduction in 2020
Answered

On September 25, 2020, the Government issued Decree No. 114/2020/ND-CP, detailing
the implementation of the National Assembly's Resolution No. 116/2020/QH14 on
corporate income tax (“CIT”) payable in 2020 for enterprises, cooperatives, non-business
units and other organizations (”Decree 114/2020/ND-CP”).

Accordingly, guidance on the declaration of CIT payable reduction in 2020, specifically as
follows:

1. Enterprises shall determine by themselves the reduced CIT amount:

– Enterprises determine by themselves the amount of CIT to be reduced when: temporarily
calculating tax (quarterly) and declaring the CIT payable in the CIT period 2020.

– When making a tax declaration dossier, the enterprise shall declare the reduced CIT on the
declaration forms enclosed with Circular No. 151/2014/TT-BTC dated October 10, 2014 of
the Ministry of Finance and the amended and supplemented documents (if any) and in the
CIT Appendix are reduced according to Resolution No. 116/2020/QH14 issued together
with Decree 114/2020/ND-CP.

2. When enterprises underpay/overpay the quarterly temporary tax amount:

Underpayment compared to the temporarily paid tax amount (quarterly): The enterprise
must additionally pay the outstanding tax + late payment interest in accordance with the
Law on Tax Administration and its guiding documents.

Overpayment compared to the payable tax amount of the CIT period 2020: Overpaid tax
amounts shall be handled according to the provisions of the Law on Tax Administration
and guiding documents.

3. Inspection and examination by competent state agencies in the declaration of CIT
payable reduction in 2020:

– Through inspection and examination, the competent authority discovered: (1) Enterprises
are not subject to tax reduction according to the provisions of Decree 114/2020/ND-CP; or
(2) The payable tax amount of the CIT period 2020 is larger than the paid tax amount =>
the enterprise must pay: the outstanding tax + late payment interest from the date of
expiration of the tax payment time limit + fines in accordance with the Law on Tax
Administration and its guiding documents.

– In case enterprises: (1) additionally declaring CIT declaration dossiers for the tax period
2020; or (2) implementing a decision after inspection and examination by a competent
authority => Leading to an increase in CIT payable, the additional CIT is reduced by 30%
in accordance with the Decree. 114/2020/ND-CP.

– In case enterprises: (1) additionally declaring CIT declaration dossiers for the tax period
2020; or (2) implementing a decision after inspection and examination by a competent
authority => Leading to the reduction of corporate income tax payable, the overpaid tax amount (if any) shall be handled according to the provisions of the Law on Tax

Administration and guiding documents.

4. The value of the Decree 114/2020/ND-CP provides:

– It is a supporting policy from the state to help enterprises overcome difficult times due to
the impact of the Covid-19 epidemic;

– It is the capital facilitation for enterprises to develop production and business, improve
competitiveness, expand production scale;

– It is a measure to maintain long-term revenues for the state budget.

Above is the news: Guidance on the declaration of CIT payable reduction in 2020, in

Decree No. 114/2020/ND-CP.

Decree No. 114/2020/ND-CP takes effect from the effective date of Resolution No.
116/2020/QH14 and applies to the CIT period 2020, interpreted as August 3, 2020.

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Some notes on the reduction of CIT payable in 2020
Answered

On September 25, 2020, the Government issued Decree No. 114/2020/ND-CP, detailing
the implementation of the National Assembly's Resolution No. 116/2020/QH14 on
corporate income tax (“CIT”) payable in 2020 for enterprises, cooperatives, non-business
units and other organizations (“Decree 114/2020/ND-CP“).

Accordingly, some notes on the reduction of CIT payable in 2020, specifically as follows:

1. Notes on the reduced CIT amount:

– The reduced CIT amount of the CIT period 2020 is calculated on the entire income of the
enterprise, including the incomes specified in Clause 3, Article 18 of the Law on CIT.

– The reduced CIT amount specified in Decree 114/2020/ND-CP is calculated on the
payable CIT amount of the CIT period 2020, after deducting the CIT amount that
enterprises are enjoying preferential treatment according to the provisions of the Law on
CIT and its guiding documents.

2. Notes on the CIT period:

– The CIT period is determined according to the calendar year, if the enterprise applies a
fiscal year different from the calendar year, the CIT period is determined according to the
fiscal year specified in the Law on CIT and its guiding documents.

– In case the first tax period is 2019 (for a newly established enterprise) or the last tax period
is 2021 (for an enterprise transforming enterprise type, form of ownership, consolidation,
merger, division, dissolution, bankruptcy), for a period of less than 03 months => then this
tax period is added to the CIT period 2020 (Note: Determination of total revenue and the
reduced tax in this case only applies to the CIT period 2020 within 12 months).

3. The value of the Decree 114/2020/ND-CP provides:

– It is a supporting policy from the state to help enterprises overcome difficult times due to
the impact of the Covid-19 epidemic;

– It is the capital facilitation for enterprises to develop production and business, improve
competitiveness, expand production scale;

– It is a measure to maintain long-term revenues for the state budget.

Above is the news: Some notes on the reduction of CIT payable in 2020, Decree No.
114/2020/ND-CP.

Decree No. 114/2020/ND-CP takes effect from the effective date of Resolution No.
116/2020/QH14 and applies to the CIT period 2020, interpreted as August 3, 2020.

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30% reduction of CIT payable in 2020
Answered

On September 25, 2020, the Government issued Decree No. 114/2020/ND-CP, detailing
the implementation of the National Assembly’s Resolution No. 116/2020/QH14 on
corporate income tax (“CIT”) payable in 2020 for enterprises, cooperatives, non-business
units and other organizations (“Decree 114/2020/ND-CP“).

Accordingly, enterprises that meet the following conditions will receive a 30% reduction
in CIT payable in 2020, specifically as follows:

1. Conditions on subjects eligible for tax reduction policy:

– Enterprises established in accordance with Vietnam’s law;

– Organizations established in accordance with the Law on Cooperatives;

– Public service providers established in accordance with Vietnam’s law;

– Other organizations established in accordance with Vietnam’s law and earning income
from business operation.

2. Conditions on total revenue in 2020 eligible for tax reduction policy:
The enterprises whose total revenue in 2020 do not exceed 200 billion VND. Specifically:

– Total revenue in 2020 is the total revenue in the CIT period 2020 of the enterprise
including all sales, processing and service charges including price subsidies, surcharges,
and extra which enterprises are entitled to under the provisions of the Law on CIT and its
guiding documents.

– In case of a newly established enterprise, enterprise transforming the form of enterprise,
ownership, consolidation, merger, division, separation, dissolution or bankruptcy in the
CIT period 2020 less than 12 months of operation: Total revenue in 2020 is determined by
the total actual revenue in the CIT period 2020 divided (:) by the number of months the
enterprise actually operates in the CIT period 2020 multiplied (x) by 12 months. In case a
newly established enterprise or enterprise transforms the form of enterprise, ownership,
consolidation, merger, division, separation, dissolution or bankruptcy in a month, the
operation period shall be counted for the full month.

– If the enterprise expects total revenue in the CIT period 2020 to not exceed VND 200
billion, the enterprise shall determine quarterly temporary payment equal to 70% of the
payable CIT amount of the quarter.

– At the end of the CIT period 2020, if the total revenue in 2020 of the enterprise does not
exceed VND 200 billion, the enterprise shall declare and reduce the CIT of the year 2020
When finalizing CIT according to regulations.

3. The value of the Decree 114/2020/ND-CP provides:
– It is a supporting policy from the state to help enterprises overcome difficult times due to
the impact of the Covid-19 epidemic;

– It is the capital facilitation for enterprises to develop production and business, improve
competitiveness, expand production scale;

– It is a measure to maintain long-term revenues for the state budget.
Above is the news: 30% reduction of CIT payable in 2020 in Decree No. 114/2020/ND-
CP.

Decree No. 114/2020/ND-CP takes effect from the effective date of Resolution No.
116/2020/QH14 and applies to the CIT period 2020, interpreted as August 3, 2020.

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The guiding the implementation of rooftop solar power development
Answered

On September 22, 2020, the Ministry of Industry and Trade issued Official Letter No.
7088/BCT-DL in 2020 guiding the implementation of rooftop solar power development.
This Official Letter takes effect from the date of its issue.

Currently, there are quite a few questions about understanding what is Rooftop solar
systems, or on what basis the regulation “photovoltaic panels installed on the roof of a
building” is determined on. This has caused many difficulties and shortcomings in the
application to determine the appropriate electricity purchase and sale price. The
promulgation of Official Letter No. 7088/BCT-DL specifically guides the above issues.
what is Rooftop solar systems?

Under Clause 5, Article 3 of Decision No. 13/2020/QD-TTg is defined as follows:
Rooftop solar system” refers solar system in which solar panels are installed on the roof
of the construction with no more than 1 MW in power and directly or indirectly connected
to power grid with up to 35kV of the Buyers.

However, in order to be more detailed and ensure that the Rooftop solar system
development is carried out in accordance with the spirit of the policy, in Official Letter
7088/BCT-DL, the conditions for the Rooftop solar system should meet, in particular:
– Rooftop solar power systems must be installed on rooftops of constructions with
independent functions;

– The roof of a construction work must be the roof of the building and the roof of the house-
type structure.

– The roof of a construction work must be suitable to its function and use purpose.

Application of electricity purchase price and signing of Power purchase agreement:

 

Official Letter 7088/BCT-DL also provides guidance, in some specific cases, the
application of electricity purchase prices and signing agreements are as follows:

– In the case where the investor takes advantage of the roof of the office, operator, kitchen,
employee motels, garage, factory, material warehouse, on the premises of solar power
projects to invest in rooftop solar power and request to install separate meters, sign power
purchase agreement for rooftop solar system, the Electricity of Vietnam (EVN) may sign a
power purchase agreement if it is found in accordance with the regulations on rooftop
solar system.

– In case of solar power with a capacity of not more than 01 MW and not installed on the
roof of a construction with independent functions, when signing a power purchase
agreement, the electricity price for rooftop solar system is not applied according to the
law.

 

– In the following cases, each rooftop solar system may sign a separate power purchase
agreement and be exempt from the electricity activity license, including:

+ An investor acquires multiple power systems adjacent roof solar panels, with a total
capacity of over 01 MW;

+ Many rooftop solar systems with a total capacity of more than 01 MW (each system with a
capacity of not more than 01 MW) per 01 location (on the same plot of land or roof of the
industrial park) are directly connected. or indirectly, of one or more investors.

Thus, Official Letter 7088/BCT-DL issued has contributed to solving problems and
difficulties for individuals and organizations with rooftop solar systems, as well as more
specific guidance for power buyers – EVN in the application of and determine the purchase
price of electricity.

List of scrap permitted to be imported from abroad to be used as raw production materials
Answered

On September 24, 2020, the Prime Minister issued Decision 28/2020/QD-TTg regulating
the List of scrap permitted to be imported from abroad for use as raw production materials.
Accordingly, this category includes:

  1. Iron and steel scrap: Waste and scrap of cast iron; Scrap and fragments of alloy steel: of
    stainless steel; Waste and scrap of alloy steel: Other (different from stainless steel); Waste
    and scrap of tin-coated iron or steel; Waste and other fragments of iron or steel: Turning,
    shavings, fragments, rolled scales, cut chips and burrs, not pressed into blocks or packed
    into bales, cakes or bundles; Waste and other fragments of iron or steel: Other types.
  2. Plastic willow
    – Scrap – Scrap and scrap of plastic (plastic) from ethylene (PE) polymer: porous, not hard
    – Scrap and plastic (plastic) scrap from ethylene (PE) polymer: Others
    – Scrap Materials and fragments of plastics (plastics) from Styrene (PS) Polymers: Others
    – Scrap and scrap of plastics (plastics) from Polymeric Vinyl Chloride (PVC): Others
    – Scrap and scrap of plastics (plastics) from other plastics (plastics): Polyethylene
    Terephthalate (PET); Polypropylene (PP); Polycarbonates (PC); Polyamide (PA);
    Acrylonitrin Butadien Styrene (ABS); High Impact Polystyrene (HIPS); Poly Oxy
    Methylene (POM); Poly Methyl Methacrylate (PMMA); Expanded Polystyrene (EPS);
    Thermoplastic Polyurethanes (TPU); Ethylene Vinyl Acetate (EVA); Silicon resin is
    removed from the manufacturing process and has not been usedg
  3.  Scrap paper
    – Recalled paper or cover type (scraps and crumbs): Kraft paper or kraft paper or paper or
    wave cover, un bleached
    – Paper type or cover type recovered (scraps and excess crumbs): Paper or other covers are
    made mainly of powder, paper obtained from the chemical process bleached, not fully
    stained
    – Recalled paper or cover type (scraps and excess crumbs): Paper or cardboard made
    primarily of pulp obtained from mechanical processes (e.g., newspapers, magazines and
    similar publications)
    – Recalled paper or cover (scraps and scraps): Other types, including uns classified scraps
    and crumbs
  4.  Glass scrap: Glass scrap and other glass fragments and scrap; glass in block form
  5. Non-ferrous metal scrap: Copper scrap and fragments; Nickel waste and scrap; Aluminum scrap and fragments; Zinc waste and scrap; Tin scrap and fragments; Manganese scrap and fragment.
  6. Blast furnace slag scrap : Granular slag (sand slag) from iron or steel refining industry (blast furnace slag includes: small grain slag, sand slag from iron, iron, steel industry )

This decision takes effect from November 15, 2020 and replaces Decision No.73/2014/
QD-TTg of December 19, 2014 of the Prime Minister specified list of scraps permitted
imports from abroad as raw materials for production.

Types of scrap permitted to be imported from abroad under the Certificate of eligibility for
environmental protection in import of scrap for use as raw production materials issued by
a competent authority in accordance with the law may continue to import password to the
end of the validity of the Certification.

Private enterprise directly transformed into Joint Stock Company
Answered

On June 17, 2020, the National Assembly promulgated the Enterprise Law 2020
stipulating the establishment, management organization, reorganization, dissolution and
operation. related business, including limited liability companies, joint stock companies,
partnerships and private enterprises; regulations on group of companies.

Accordingly, the Enterprise Law 2020 allows a private enterprise to be directly converted
into a joint stock company under the decision of the owner of a private enterprise if the
following conditions are met:

  •  Business lines registered for business not banned from business investment; The name of
    the business is set according to the regulations; Having valid business registration
    documents; Pay the fee for enterprise registration in full in accordance with the law on fees
    and charges;
  •  The owner of a private enterprise commits in writing to personally responsible with all his
    assets for all unpaid debts and undertakes to fully pay the debt when due;
  • The owner of the private enterprise has a written agreement with the parties to the
    unliquidated contract that the converted company will receive and continue to perform
    such contracts;
  • The owner of a private enterprise commits in writing or has a written agreement with other
    capital contributors on the receipt and use of existing employees of the private enterprise.

The Enterprise Law 2020 takes effect from January 1, 2021.

Conditions for issuing non-convertible bonds and bonds without warrants
Answered

On July 9 th ,2020, the Government issued Decree No.81/2020/ND-CP mendments to the
government’s decree no. 163/2018/nd-cp dated december 04 th , 2018 on issuance of corporate
bonds, the document takes effect from September 1 st , 2020.
One of the adjustments and supplements that are considered outstanding is the conditions
for issuing non-convertible bonds or bonds without warrants. Accordingly, in addition to the
conditions specified in Decree 163/2018/ ND-CP, Decree 81/2020/ND-CP has added the
following conditions:
(1) It has signed a consulting contract with a consultancy organization providing
consultancy on bond issuance dossiers as prescribed in Clause 3 Article 15 hereof, unless
the issuer is licensed to provide consultancy on bond issuance dossiers as prescribed by law.
(2) Total outstanding debt on corporate bonds issued through the private placement at the
time of issuance (including the planned amount of bonds to be issued) does not exceed 05
times the owner’s equity stated in the financial statements of the latest quarter preceding the
time of issuance approved by a competent authority.
(3) Each bond issue must be completed within 90 days from the date of publishing of
information before the bond issue; the interval between two issues must be at least 06
months; bonds issued in an issue must have the same terms and conditions.
(4) Credit institutions issuing bonds are not required to satisfy the requirements laid down
in item (2) and item (3) of the above conditions.
Thus, the conditions for issuing corporate bonds have been specified and stricter than the
current regulations in order to continue operating and developing a safe and sustainable corporate
bond market.

Non-conduction of mediation or dialogue at Court
Answered

On June 16, 2020, the 14th National Assembly voted to pass the Law on Mediation and Dialogue at the Court. This new law has specified the cases where mediation and dialogue are not conducted in court. As follows:

Non-conduction of mediation or dialogue at Court (Article 19 Law on mediation or dialogue at Court)

  • Claim compensation for damage to the State’s properties.
  • Cases arising from civil transactions that violate the prohibition of law or social ethics.
  • The petitioner, the respondent, persons with related interests and obligations have been duly invited to participate in mediation or dialogue for the second time but still absent due to force majeure events or objective obstacles or unable to participate in mediation or dialogue for valid reasons.
  • A spouse in a divorce dispute is legally incapacitated.
  • One of the parties proposes not to conduct mediation or dialogue.
  • One of the parties requests the application of a provisional emergency measure as per the Civil Procedure Code and the Administrative Procedure Law.
  • Other cases as prescribed by law.

The above are the cases where mediation and dialogue are not conducted in Court. The Law on Mediation and Dialogue at Court will officially take effect from January 1, 2021.

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The Role of the Mediator in procedures for mediation and dialogue at Court under the Law on Mediation, Dialogue at Court
Answered

On June 16, 2020, the 14th National Assembly voted to pass the Law on Mediation and Dialogue at Court. This new law defines the role of the Mediator in the mediation and dialogue proceedings at the Court. As follows:

  1. Preparation for mediation or dialogue at court (Article 21 – Law on Mediation, Dialogue at Court)

The work of preparing mediation or dialogue of mediators includes:

  • Receiving the application and attached documents transferred by the court;
  • Record the case in the logbook;
  • Examining the application and attached documents transferred by the court;
  • Determining litigation positions of the parties, their representatives and interpreters in the civil case or administrative lawsuit; notify them of mediation or dialogue;
  • Requesting the parties to supplement information, documents and evidence; proposing plans and solutions to resolve the civil case or administrative lawsuit;
  • Formulating plans and solutions for mediation or dialogue;
  • Invite reputable people capable of influencing each party to the mediation or dialogues for further support when necessary;
  • Studying relevant laws and regulations, understanding customs, practices and circumstances of the parties intended for mediation or dialogue when necessary;
  • Consulting with entities with expertise in fields related to the civil case or administrative lawsuit intended for mediation or dialogue when necessary;
  • Other contents necessary for mediation or dialogue.

          2. Tasks of mediators in the process of conducting mediation or dialogue at court (Article 23 – Law on Mediation, Dialogue at Court)

  • Disseminate and explain rights and obligations of the parties.
  • Enable the parties to propose and discuss plans or solutions to settle the civil case or administrative lawsuit.
  • Analyze the effectiveness and feasibility of each plan and solution for resolving the civil case or administrative lawsuit; assist parties to reach an agreement.

The Mediator deals with both facts and legal matters, but law is not the focus of the mediation process. Mediation is not about deciding who is right and who is wrong, who is at fault, declaring who wins and who loses, but looking into the future. The focus is not on who said what, what to do in the past. Instead, its purpose is to find a practical solution that is acceptable to anyone involved, taking into account various interests, legal interests as well as other benefits (e.g.: To preserve relationships or honor or find competitive boundaries in the marketplace).

The above are regulations about the Role of the Mediator in procedures for mediation and dialogue at Court under the Law on Mediation, Dialogue at Court. The Law on Mediation and Dialogue at Court will officially take effect from January 1, 2021.

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