On June 4, 2021, the Government issued Decree No. 57/2021/ND-CP (“Decree 57”) amending and supplementing Decree No. 218/2013/ND-CP on Corporate Income Tax (“CIT”) for projects producing supporting industry products (“supporting industry”) implemented before January 1, 2015, and has been granted Certificate of Incentives for production of supporting industry products.
This newsletter reviews the following main points: (1) The previous regulations on CIT incentives for supporting industry; (2) Main contents of Decree No. 57; (3) Instructions for adjusting the tax payment amount. Here are the details:
1. The previous regulations on CIT incentives for supporting industry
– Law No. 71/2014/QH13 takes effect from January 1, 2015;
– Decree No. 111/2015/ND-CP on supporting industry development;
– Circular 55/2015/TT-BCT stipulating the order and procedures for the confirmation of incentives and post-audit of incentives for supporting industry projects on the list of supporting industry products prioritized for development issued by the Minister of Industry and Trade.
2. Main contents of Decree No. 57
– Determining the subjects of enterprises eligible for CIT incentives for supporting industry;
– Principles of determining CIT incentives for supporting industries in some specific cases;
– Specific examples for enterprises to refer and apply;
3. Instructions for adjusting the tax payment amount.
– Cases of adjustment: Enterprises are entitled to a reduction in the amount of CIT and late payment interest (if any);
– Method: The enterprise sends a written request to the tax authority directly managing the reduction of the payable CIT amount declared or inspected by the competent authority and the corresponding late payment interest (if any);
– After adjusting, if there is an overpaid tax or late payment interest, it will comply with the provisions of Article 60 of the Law on Tax Administration dated June 13, 2019, and guiding documents.
Decree 57 takes effect from the date of signing (June 4, 2021).
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On June 4, 2021, the Government issued Decree No. 57/2021/ND-CP (“Decree 57”) amending and supplementing Decree No. 218/2013/ND-CP on Corporate Income Tax (“CIT”) for projects producing supporting industry products (“supporting industry”) implemented before January 1, 2015, and has been granted Certificate of Incentives for production of supporting industry products.
This newsletter reviews the following main points: (1) How to determine the period of application preferences?; (2) Things Enterprises should do to take advantage of the preferential policies in Decree 57.
1. How to determine the period of application preferences?
In case an enterprise whose income from a project to produce supporting industry products is not yet entitled to CIT incentives, the incentive period = the time to enjoy CIT incentives according to the conditions of the supporting industry (from the tax period that the Certificate of eligibility for the supporting industry sector was issued by the competent authority).
In case an enterprise whose income from the supporting industry project has fully enjoyed/is enjoying CIT incentives under other preferential conditions (besides the preferential conditions for supporting industry projects), Incentive period = remaining time of supporting industry incentives (from the tax period that the Certificate of eligibility for the supporting industry sector was issued by the competent authority).
Therein:
The remaining time = CIT incentive period according to the conditions of supporting industry projects (-) number of years of tax exemption, number of years of tax reduction, number of years of enjoying preferential tax rates under other preferential conditions.
2. Things Enterprises should do to take advantage of the preferential policies in Decree 57
Enterprises operating in the field of producing supporting industry products, especially those with supporting industry projects implemented before January 1, 2015, should:
– Reviewing the ability to meet the conditions as prescribed in Decree 57 and related documents;
– Timely implement necessary procedures with specialized management agencies such as the Ministry of Industry and Trade and tax authorities to apply tax incentives in accordance with regulations and in a timely manner.
– If tax incentives have been applied in the field of supporting industry, it is still necessary to review to ensure that preferential conditions are maintained during the operation of the project in accordance with regulations.
Decree 57 takes effect from the date of signing (June 4, 2021).
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On June 4, 2021, the Government issued Decree No. 57/2021/ND-CP (“Decree 57”) amending and supplementing Decree No. 218/2013/ND-CP on Corporate Income Tax (“CIT”) for projects producing supporting industry products (“supporting industry”) implemented before January 1, 2015, and has been granted Certificate of Incentives for production of supporting industry products.
This newsletter reviews the following main points: (1) What are supporting industry products? (2) Subjects eligible for incentives under Decree 57.
1. What are supporting industry products?
According to Clause 1, Article 3 of Decree 111/2015/ND-CP stipulating support and preferential policies for the development of supporting industries, the following are defined: “Supporting industries are industries that produce raw materials, materials, components and spare parts for the production of finished products”.
Details of the List of Supporting Industry Products are specified at:
– Appendix 1: List of supporting industrial products prioritized for domestic development that can be produced before January 1, 2015 (issued together with Circular No. 55/2015/TT-BCT dated December 30, 2015, of the Ministry of Industry and Trade);
– Appendix: List of supporting industry products prioritized for development (Issued together with Decree No. 111/2015/ND-CP dated November 3, 2015, of the Government).
2. Subjects eligible for incentives under Decree 57
Being an enterprise with an investment project (new investment and expansion investment) producing supporting industry products (“Enterprise”), implemented before January 1, 2015, has been granted Certificate of Incentives for production of supporting industry products by The Competent Authority:
a. Subject 1: Enterprises whose income from the project of producing supporting industry products has not yet enjoyed CIT incentives.
b. Subject 2: Enterprises whose incomes from projects to produce supporting industry products have enjoyed all CIT incentives under other preferential conditions (besides preferential conditions for supporting industry products production projects).
c. Subject 3: Enterprises that earn income from supporting industry product production projects are enjoying CIT incentives under other preferential conditions (besides preferential conditions for supporting industry products production projects).
Meaning of Decree 57:
There are two particularly important meanings from the implementation of Decree 57:
– Firstly: It has special meaning for enterprises in the field of supporting industry. Through the CIT incentive policy, businesses can partly overcome financial difficulties due to the complicated impact of the Covid-19 pandemic, which directly and deeply affects the financial situation for a long time and has no end yet.
– Secondly: Decree 57 has recognized the Government’s efforts in policy reform and creating a favorable business environment for enterprises.
Decree 57 takes effect from the date of signing (June 4, 2021).
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On June 3, 2021, the Minister of Labor, War Invalids, and Social Affairs issued Circular No. 01/2021/TT-BLDTBXH stipulating the list of potentially unsafe products and goods under management responsibility of the Ministry of Labor, War Invalids and Social Affairs. In which, the Circular stipulates the list of products subject to an inspection of quality upon import, including:
– Head protection equipment for workers: Industrial safety helmets;
– Eye and face protection equipment for workers: Welding goggles and welding shields providing protection from flying objects and ultraviolet radiation;
– Respiratory protective equipment for workers: Full-face and haft-face respirator masks for particle filtering; Full-face and haft-face respirator masks for filtering toxic gas (excluding medical face masks);
– Hand and arm protective equipment for workers: Protective work gloves protecting against cuts, punctures, and stabs, and insulating gloves (excluding medical gloves, medical examination gloves);
– Foot and leg protective equipment for workers: Shoes protecting against punctures, stabs, cuts, hits, and chemicals; insulating boots;
– Safety belts and personal fall-arrest systems for workers;
– Clothing to protect against heat and flame for workers;
– Lifts and their safety components, including Door locks and cabin door locks; Safety gear; Lift machine braking system; Overspeed governor; Shock absorbers; Shut-off valves/check valves of hydraulic lifts;
– Escalators and passenger conveyors; safety components, including Stopping and controlling braking systems for escalators or conveyors; Safety gear system; Traction machines (motors, gearboxes);
– Cylinders and containers for compressed gas with nominal working pressure exceeding 0.7 bar (excluding cylinders for petroleum and liquefied petroleum gas (LPG));
– Electric pulleys and hoists;
– Hand pulleys and hoists with a lifting load of 1.000 kg or more;
– Lift tables and elevating work platforms for lifting people (excluding suspended work platforms used in construction).
For products on the list above, they will have to ensure the quality standards and regulations when imported and approved by the Department of Occupational Safety; The Department of Labor, War Invalids and Social Affairs inspects the quality of imported goods in accordance with the law.
This Circular takes effect from July 18, 2021.
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On June 29, 2021, the Government issued Resolution No. 63/NQ-CP on the main tasks and solutions to promote economic growth, disbursement of public investment, and sustainable export during the final months of 2021 and the beginning months of 2022 (“Resolution 63”).
One of the highlights and notable points in Resolution 63 is the recognition of specific tasks and solutions to promote the formation of the vaccine manufacturing industry in Vietnam. This is one of the key tasks and solutions that are put on the top as stipulated by the Government in Resolution 63. Accordingly, the Government assigns specific tasks to the Ministry of Health to assume the prime responsibility for, and coordinate with relevant agencies and localities:
– Research and propose the establishment of a center for technology transfer, research, and production of vaccines up to international standards;
– Develop specific support policies to attract organizations and enterprises to invest in, research, and receive vaccine production technology, towards the formation of a vaccine manufacturing industry.
Prior to the issuance of Resolution 63, in Notice No. 160/TB-VPCP of the Government Office regarding the conclusions of Prime Minister Pham Minh Chinh at the meeting with scientists, business units, etc. In the research and production of vaccines against Covid-19, Prime Minister Pham Minh Chinh also emphasized the tasks and solutions in the coming time:
– Focus on promptly removing difficulties and obstacles related to legislation, mechanisms, and policies in the spirit of sticking to reality, creating the most favorable conditions for research, technology transfer, and vaccine production;
– The Ministry of Health, the state management agency in charge of vaccines, directs the implementation of tasks: technology transfer, production, and organization of a vaccination campaign against Covid-19; establish a national vaccine research and production center up to international standards; propose to the competent authorities the problems that remain to be resolved in a timely manner. Coordinate with relevant ministries and branches to forecast the situation, balance supply, and demand appropriately to avoid the situation of “when there is a shortage, when there is excess, at the wrong time” to regulate macro policies promptly and effectively.
Passing Resolution 63: The Government has uniformly directed all levels and sectors to focus on drastically implementing key tasks and solutions to promote the formation of the vaccine manufacturing industry, besides promoting economic growth, public investment disbursement, and sustainable exports during the final months of 2021 and the beginning months of 2022.
Resolution 63 takes effect from June 29, 2021.
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On June 18, 2021, the Ministry of Finance issued Circular 45/2021/TT-BTC guiding the application of the prior agreement mechanism on the tax calculation method (APA) in tax administration for enterprises associated transactions. Accordingly, regulations on transactions proposed to apply APA are as follows:
– Transactions proposed to apply APA are related-party transactions specified in Clause 2, Article 1 of Decree 132/2020/ND-CP of the Government, specifically:
• Transactions as purchase, sale, bartering, renting, leasing out, borrowing, lending, transfer or disposal of commodities, provision of services;
• Transactions as financial borrowing, lending, financial services, financial guarantee, and other financial instruments;
• Transactions as purchase, sale, bartering, renting, leasing out, borrowing, lending, transfer or disposition of tangible assets, intangible assets; and
• Agreements on purchase, sale, and sharing of resources such as assets, capital, labor, and sharing of costs between related parties.
Exception: Business transactions in goods and services subject to price adjustments that the State makes under laws on prices.
– Transactions proposed to apply APA must simultaneously meet the following conditions:
• Actual transactions have arisen in the taxpayer’s production and business activities and will continue to take place during the APA application period.
• The transaction has a basis for determining the nature of the transaction, which determines the tax liability and a basis for analysis, comparison, and selection of independent comparables according to the provisions of Articles 6 and 7 of Decree No. 132/2020/ND-CP, based on information and data in compliance with the provisions of Point b, Clause 6, Article 42 of the Law on Tax Administration.
• The transaction is not subject to tax disputes or complaints.
• Transactions are made transparently, not for the purpose of evading, avoiding taxes, or take advantage of Tax Agreements.
Circular 45 takes effect from August 3, 2021, and replaces Circular 201/2013/TT-BTC dated December 20, 2013.
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On June 22, 2021, the Vietnam General Confederation of Labor issued Guidance No. 13/HD-LDLD guiding some contents related to payment of trade union fee dues affected by the Covid – 19 pandemic (“Guidance No.13”). Accordingly, allow Enterprises affected by Covid – 19 to postpone payment of trade union fee, specifically as follows:
+ Enterprises making the application dossiers include:
(1) A written request for postponement of payment of trade union fee, made according to the form in Appendix I to Guidance No.13;
(2) The list of reduced employees in social insurance contributions, made according to the form in Appendix II to Guidance No.13;
(3) A copy of the written certification of the social insurance or specialized labor management agency about the labor change situation at the enterprise.
+ The order of execution:
(1) The enterprise submits the application dossier to the direct superior trade union agency where the enterprise registers its business office;
(2) Within 15 working days from the date of receiving the enterprise’s application dossier, the direct superior trade union is responsible for checking the application dossier and comparing it with the data of employees participating in social insurance to consider and settle the postponed payment of trade union fee and take responsibility for this decision; if not resolved, reply in writing and clearly state the reason for the enterprise to know.
Guidance No.13 takes effect from the date of issue.
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On March 19, 2021, The Government promulgates Decree 23/2021/ND-CP guiding Clause 3, Article 37, and Article 39 of the Employment Law on employment service centers and employment service enterprises.
Accordingly, this Decree details the conditions for licensing of employment service enterprises, specifically as follows:
So, compared with the previous regulations, this Decree has supplemented regulations on conditions for legal representatives of employment service enterprises. This new regulation has tightened the management, responsibility, and efficiency of employment service enterprises.
This Decree takes effect from June 1, 2021.
In the context of current international integration, the need to employ foreign workers (or Vietnamese who study at training programs of foreign educational institutions) is becoming more and more common in enterprises in Vietnam. This leads to the need for foreign diploma recognition.
On April 15, 2021, the Ministry of Education and Training issued Circular 13/2021/TT-BGDDT on conditions, order, procedures, and competence to recognize diplomas issued by foreign educational institutions for use in Vietnam. (“Circular 13”), Circular 13 has replaced Decision No. 77/2007/QD-BGDĐT; Circular No. 26/2013/TT-BGDDT. One of the important contents of Circular 13 is the provision of exemption from diploma recognition procedures. As follows:
Diplomas issued by foreign educational institutions to learners are recognized for use in Vietnam without having to go through the diploma recognition procedures. In which, “Diploma” is understood to include: secondary school diploma, high school diploma, certificate of completion of general education program, bachelor degree, master degree, Ph.D. diploma, and equivalent qualifications.
The exemption from diploma recognition procedures does not include certification of diplomas; agencies, organizations, or employers are responsible for verifying diplomas in case of necessity.
Circular 13 takes effect from June 1, 2021.
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On April 19th, 2021, the Ministry of Finance issued Circular No. 27/2021/TT-BTC amending and supplementing a number of articles in Circular No. Circular No. 19/2014/TT-BTC dated February 11th, 2014 of the Minister of Finance stipulating procedures for temporary import, re-export, destruction, and transfer of automobiles, two-wheeled motorbikes of who are subject to privileges and immunities in Vietnam.
Accordingly, the procedures for temporary import of the latest automobiles and motorbikes are carried out as follows:
If paper customs procedures are carried out, the Sub-department of Customs shall certify the customs clearance on 03 declarations:
This Circular is effective as of June 2, 2021
