New important policies of Vietnam taking effect as from August, 2016

1. Clear guidance on the application for figuring out land financial obligations

The Joint Circular No. 88/2016/TTLT/BTC-BTNMT dated 22 June 2016 stipulating on the application and procedures for receiving, circulating the application for figuring out land financial obligations takes effect from 08 August 2016.

Compared to the previous provisions, this Joint Circular more detailed the application for figuring out land financial obligations of land users in particular cases, including:

– The case of land allocation or lease by the State without auctions, transfer of land use purposes.

– The case of granting land use right certification to households and individuals currently using land.

– The case of land allocation or lease through auctions.

– The case of additional registration of assets attached to land; transfer of land use forms; extension of land use period; conversion, transfer, succession, donation of land use rights and assets attached to land.

– The case of adjustment of detailed construction planning of the project or payment for additional financial obligations due to increasing the area of land.

The Joint Circular No. 88/2016/TTLT/BTC-BTNMT replaces the Joint Circular No. 30/2005/ TTLT -BTC-BTNMT.

2. Guidance on the implementation of corporate income tax incentives

The Circular No. 83/2016/TT-BTC dated 17 June 2016 providing guidance on the implementation of corporate income tax (CIT), import tax and non-agricultural land use tax incentives takes effect as from 01 August 2016.

Accordingly, CIT incentives are stipulated as follows:

– New investment projects in the business sectors subject to CIT incentives or located within the areas subject to investment incentives, shall be eligible for CIT incentives equivalent to those granted to the sectors or areas referred to in the Law on Corporate Income Tax.

– New investment projects located within economic zones, hi-tech parks, industrial zones or export processing zones shall be eligible for CIT incentives as stipulated by Clause 2, 3 and 4, Article 4 of this Circular.

– New investment projects shall, when meeting multiple eligibility requirements for CIT incentives, be entitled to the most favourable CIT incentive.

3. New guidance on the issuance of construction permit

With regard to the work which is permitted to construct without construction permit as referred to by law before 01 January 2016 but now subject to the requirement of construction permit as regulated in Law on Construction in 2014, Circular No. 15/2016/TT-BXD dated 30 June 2016 provides the following guidelines on the issuance of construction permit:

– In case of commencement date prior 01 January 2015:

+ The investor shall be exempted from obtaining the construction permit;

+ If the design of the work is amended, the investor shall only request a specialized construction authority to appraise and approve the amended design before using it in construction.

+ For detached house whose construction design is not subject to the appraisal of specialized construction authority, the investor shall submit the amended design the competent licensing authority.

– Otherwise, in case where the construction is not yet started, the investor must apply for the construction permit in compliance with Law on Construction in 2014.

This Circular replaces the Circular No. 10/2012/TT-BXD and the regulations on the issuance of construction permits in the Circular No. 19/2009/TT-BXD. The Circular takes effect as of 15 August 2016.

4. 17 occupations bound by strict requirements for occupational safety and hygiene

This is the main content promulgated by the Circular No.13/2016/TT-BLDTBXH dated 16 June 2016 providing the list of occupations bound by strict requirements for occupational safety and hygiene. This new list shall replace the old list (including 13 occupations) provided by the Circular No.27/2013/TT-BLDTBXH dated 18 October 2013.

Hereinafter are a number of new listed occupations:

– Working at height over 2 meters above the ground;

– Working in contact with ionizing radiation;

– Working in contact with electromagnetic currents at high frequency bands from 30 to 300 GHz.

– Manufacturing, using, operating, maintaining and repairing of buildings, equipment, chemicals and solutions for the extraction of minerals, petroleum and petroleum products at sea and on land…

This Circular shall come into force as of 01 August 2016

5. Guidelines on project appraisal and approval, design and estimate of construction works

The Circular No. 18/2016/TT-BXD dated 30 June 2016 (takes effect from 15 August 2016) providing some principles of project appraisal and approval, design and estimate of construction works, as follows:

– For projects which have a number of steps of design more than the prescribed number, the specialized construction authority only appraises the design dossier at the step of design as prescribed by law. The remaining steps of design shall be decided by the investment decider for appraisal and approval.

– In case where the name and content of steps of design follow the international practices other than those prescribed by the law, the specialized construction authority only appraises the design dossier with the content corresponding to the basic and technical steps of design or construction drawing design.

The Circular also regulates the cases of refusing to receive the appraisal dossier:

– The submission for appraisal not in line with competent authority;

– The project, basic design and design and estimate of works construction are not subject to be appraised according to law on construction;

– The appraisal dossier does not ensure the legitimacy or validity.

For the dossiers received by post, the refusal of appraisal shall be in written and sent to appraisal requester.

6. Extending the time limit for the issuance of licenses for construction activities for foreign contractors

As of 15 August 2016, Circular No. 14/2016/TT-BXD dated 30 June 2016 guiding on the issuance of licenses for construction activities and management of foreign contractors operating in Vietnam shall take effect.

Accordingly, the time limit to appraise and grant a license for construction activities is 20 working days after receiving valid dossier (15 working days formerly regulated)

The Circular provides new requirements of application for granting license for individuals, as follows:

– Hard copy or soft copy of colour snapshot in image formats or others (* .pdf) (formerly certified copy) of the following original documents:

+ Documents on the bidding result or contractor selection decision or legal contract of contracting delivery;

+ Certificate of operation or the Certificate of consultancy practice granted in the country where the foreign contractor has citizenship and copy of individual passport.

– Soft copy of colour snapshot in image formats or others (* .pdf) of investment decision or investment certificate or investment intent approval.

– No requirement of personal resume and the copy of contract on relevant works performed in the past 3 years.

7. New regulations on bidding contract for procurement of goods

On 29 June 2016, the Minister of Planning and Investment promulgated the Circular No. 07/2016/TT-BKHĐT on providing specific provisions on preparing online bidding documents and request for procurement of goods . Hereinafter are a number of highlights:

– Lump-sum contract shall be applied to online bids on procurement of goods.

– Bidding documents shall comprise the form of contract specified all the terms and conditions as the basis for bidders’ offers, negotiation, contract completion and execution.

– The contract signed by and between investor, bid solicitor and contractor must:

+ Conform to the Form of Contract, contractual terms and conditions stipulated in bidding documents, and amendments or corrections proposed by contractor and accepted by investor during the process of contract negotiation and completion.

+ Be not contrary to the Law on Procurement and other related legal provisions. The Form of Bidding Documents (Form 01) and the Form of Request for Competitive Offer (Form 02) applied to online bidding are issued together with this Circular.
The Circular No. 07/2016/TT-BKHĐT takes effect as of 15 August 2016.

8. New Guidance on import tax incentives

The Minister of Finance issued the Circular No.83/2016/TT-BTC on 17 June 2016 providing guidance on the implementation of investment incentive programs under the Law on Investment and Decree No. 118/2015/ND-CP.

Investment projects belonging to the approved list of special preferential business lines referred to in Section A, Appendix I, or located in areas faced with special economic – social difficulty referred to in Appendix II of the Decree No. 118/2015/ND-CP shall be entitled to import duty incentives, including:

– Tax exemptions for imported goods for the purpose of creating fixed assets according to Clause 6, 8 Article 12 of Decree No. 87/2010/ND-CP.

– Tax exemptions for raw materials or components which must be imported to serve for investment projects because of local manufacturing failure to meet production requirements (except those not being entitled to incentives as stipulated by the Prime Minister’s decision), taking effect within a period of 05 (five) years from their manufacturing date.

Additionally, this Circular also provides guidance on the implementation of corporate income tax (CIT) and non-agricultural land use tax incentives.

The Circular shall enter into force from 1 August 2016.

9. Reducing fines for violations of losing invoices

The violation of lost, burnt or damaged invoices shall be subject to a lower fine than current regulations of Decree No.109/2013/ND-CP dated 27 May 2016, (from VND 10,000,000 to 20,000,000). Details are as follows:

A fine of from VND 4,000,000 to VND 8,000,000 shall be imposed for losing, burning or damaging invoices which are:

+ printed but not yet issued; or

+ issued but buyers cannot receive invoices (copies for buyers); or

+ issued according to the list of invoices for retailing goods and services.

No fine is imposed if the event is caused by natural disaster, fire, unexpected events or other force majeure.

In addition, the Decree also amends a number of regulations on penalties for administrative violations on management of prices, fees and charges.

This Decree takes effect as of 01 August 2016.