New policies take effect in May 2016

1. Amendments to the list of commodity headings and preferential import tax rates for iron or steel products

The Minister of Finance promulgates a Circular to make amendments to the list of commodity headings and preferential import tax rates for iron or steel products used in the manufacture of tire bead of Chapter 98 of the specific preferential import tariff promulgated under the Circular No.182/2015/TT-BTC dated November 16, 2015 of the Minister of Finance.

Thus, Heading 98.10 in Section II – List of commodity headings and preferential import tax rates in Chapter 98 of the preferential import tariff promulgated under the Circular No. 182/2015/TT-BTC dated November 16, 2015 of the Minister of Finance is amended as follows:

This Circular shall take effect as of May 02, 2016.

2. Six priorities of ODA and concessional loan provision

According to Decree 16/2016/NĐ-CP dated March 16^th 2016 on management and use of official development assistance and concessional loans granted by foreign sponsors, there are 6 Priorities of ODA and concessional loan provision as follow:

– Assistance in execution of socio-economic infrastructure programs and projects.

– Assistance in study into formulation of socio-economic development policies and improvement of state management institutions.

– Assistance in development of human resources, scientific research and technological development.

– Assistance in environmental protection, response to climate change, and green growth.

– Use as state investment in PPP projects

– Other prioritized fields decided by the Prime Minister.

This Decree takes effect from May 02, 2016 and replaces the Government’s Decree No. 38/2013/ND-CP.

 3.Environmental protection charges for mineral exploitation

Decree 12/2016/NĐ-CP dated Febuary 19^th 2016 (which takes effect from May 1^st 2016) regulates environmental protection charges for mineral exploitation as follow:

– Crude oil: 100,000 Dong/ton; natural gas and coal gas: 50 Dong/m³.

– Particularly for natural gas gathered in the process of crude oil exploitation (associated gas): VND 35/m3.

– For minerals, environmental protection charges specified in the Annex of the Decree.

– Environmental protection charge rate for full extraction of minerals is equal to 60 per cent of those for exploitation of these minerals specified in the Annex of this Article.

Base on the Annex of the Decree, the Provincial People’s Council determines detailed environmental protection charges to local specific minerals which may vary to suit the situation in different periods.

4. Exemption from personal income tax for foreign experts

Decision No. 06/2016/QD-TTg dated February 22^nd, 2016 on exemption from personal income tax for foreign experts implementing programs and projects on foreign non-governmental aid in Vietnam takes effect from May 1^st 2016.

Thus, a foreign expert eligible for exemption from personal income tax should meet following requirements:

• Have foreign nationality;
• Have a contract signed between the foreign expert and foreign non-governmental organizations, or the governing body or the owner of foreign non-governmental aid in Vietnam for direct implementation of activities of the programs and projects on foreign non-governmental aid under the program and project document approved by competent agencies and terms of reference (TOR) documents attached to this contract.

5. New guidelines on construction cost:

Circular 06/2016/TT-BXD dated March 10^th 2016 provides guidelines on defining and managing construction cost as follow:

Construction costs consist of:

– Detailed contruction unit price: is calculated for specific contruction works, which is the baseline to calculate project cost estimate and package cost estimate, including:

+ Detailed incomplete contruction unit price includes: cost of materials, labor cost, and cost of construction machines.

+ Detailed complete contruction unit price includes: cost of materials, labor cost, cost of construction machines, general cost, and profit as defined.

– General construction price: is calculated in groups of type of construction works, structural units, or parts of contructions and is calculated based on detailed construction unit price to use as a basis for determining the total investment, work cost estimate.

+ Detailed incomplete contruction unit price

+ Detailed complete contruction unit price

The Circular takes effect from May 1^st 2016

6. Minimum contract performance guarantee rate, minimum warranty rate of work construction contract

On March 10^th 2016, Ministry of Construction issued Circular 09/2016/TT-BXD on guiding contract form of work construction.

Thus, minimum contract performance guarantees rate and minimum warranty rate of work construction contract are regulated as follow:

– 3% of total contract value for special level construction and level I construction.

– 5% of total contract value for the rest.

The Circular take effect from May 1^st 2016

7. Market constructional labor cost determining method

According to Circular 05/2016/TT-BXD dated March 10^th 2016 on guiding labor unit cost determination in managing construction cost, labor unit cost survey and investigation activities consist of:

– Zoning (area): The zoning activity helps the survey to be conducted with pursuant to the Government provisions of regional minimum wage.

– Targeting survey objects.

– Survey conducting method: direct interview, sending questionair to survey objects.

– Minimum survey objects of declared area: 15 main builders and 15 builder’s labourers, who represent all kind of works in groups of residential and constructional areas.

For areas under a shortage of survey objects, actual survey results are accepted.

– Processing survey data.

– For remote areas and islands, the Provincial People’s Committee considers and determines on adjusting construction unit price; however, the ratio must not be higher than 1.2 times of average unit price.

The Circular takes effect from May 1^st 2016.

8. Financial management of PPP projects and investor selection expenses.

On March 23^rd 2016, Ministry of Finance issued Circular 55/2016/TT-BTC on providing provisions on financial management of PPP project and investors selection expenses.

Financial management of PPP project consists of:

– Managing, using project preparation expenses and implementation expenses of Ministries, provincial level people’s committee as regulated in Decree 15/2015/NĐ-CP dated February 14^th 2015 of the Government on PPP investment;

– Financial plans of PPP project;

– Payments of State investment in PPP projects;

– Final settlement of completed PPP projects.

Investor selection expenses are regulated in Article 7, Decree 30/2015/NĐ-CP dated March 17^th 2015 of the Government detailing the implementation of a number of Articles in Law on Bidding on selecting investors.

The Circular takes effect from May 5^th 2016 and replaces Circular 166/TT-BTC dated November 17^th 2011, which is null and void.