LEGAL UPDATE VOL 46, JUNE 2022

LEGAL UPDATE VOL 46, JULY 2022

LEGAL UPDATES

VOL 46, JULY 2022

Dear Valued Clients and Partners,

ADK Vietnam Lawyers would like to introduce to you the Legal Updates, Vol 46 of July 2022 with new legal provisions with notable contents as follows:

1. The engineering construction contractors must buy insurance for third-party

This is one of the notable contents in Decree 20/2022/ND-CP amending Decree 119/2015/ND-CP on compulsory insurance for construction investment activities. Accordingly, from July 1, the engineering construction contractors not only have to buy compulsory insurance for employees working at construction sites as before but also have to buy compulsory civil liability insurance for third-party. Decree 20/2022/ND-CP has some highlights as follows:

According to Article 1.4 of Decree 22/2022/ND-CP, the Government stipulates that compulsory third-party civil liability insurance shall be a specific period, from the start date to the end date of the construction time according to the construction contract and included in the insurance policy. In addition, the Government also supplemented Article 6.1.d of Decree 119/2015/ND-CP with content on the liability of insurance enterprises. An insurance enterprise shall be liable to pay a construction contractor sums as an insurance cover which such contractor has its duty to provide compensation for the third-party regarding damage outside of the insurance policy in terms of health, life, assets generated during construction and related legal costs (if any) that fall within the scope of insurance coverage in the insurance policy.

Decree 20/2022/ND-CP supplements Article 10.4 Decree 119/2015/ND-CP on the minimum sum of compulsory third-party civil liability insurance as follows:

(i) The minimum sum assured regarding damage of health or life is 100 million VND/person/case, not limiting the number of cases of damage or losses.

(ii) The minimum sum assured regarding damage of assets or related legal costs (if any) is:

- 10% of the value of the works for the entire valid duration of the insurance regarding works valued at less than 1.000 (one thousand) billion VND, not limiting the number of cases of damage or losses.

- 100 (one hundred) billion VND for the entire valid duration of the insurance and related legal costs (if any) regarding works valued at 1.000 (one thousand) billion VND or more, not limiting the number of cases of damage or losses.

Decree 20/2022/ND-CP takes effect from July 1, 2022.

2. Only components that cannot be produced domestically are exempt from import tax

The Ministry of Information and Communications is drafting a Circular stipulating that imported materials, supplies, components and used directly to produce information technology products, digital content, software are exempt from import tax (hereinafter referred to as "draft").

According to the draft, only materials, supplies and components that (i) cannot be produced domestically and (ii) are used directly to manufacture products specified in the List, are exempt from import tax. The basis for determining that products cannot be produced domestically shall comply with regulations of the Ministry of Planning and Investment. In addition, the draft clearly stipulates a List of 29 information technology (IT) products, digital content, and software that are exempt from import tax on raw materials, supplies and components such as:

(i) The equipment and software of 5G telecommunication network and next generations;

(ii) The equipment and software of IoT (Internet of Things) platform;

(iii) New generation smart terminals, transmission equipment and terminals of fixed internet;

(iv) IT equipment and software for education;

(v) Smart cameras, AI cameras and software to analyze, process and manage the data obtained from the camera;

(vi) IC products for telecommunications, IT, IoT;

(vii) Optical fibers, optical cables and equipment for transmission and connection in optical communication;

(viii) Platform equipment and software for electronic identification and authentication;

(ix) Equipment and software of the cloud computing system…

The Ministry of Information and Communications shall review, amend and supplement the above List for products that satisfy one of the following requirements:

(i) A domestic market with great demand and high added value;

(ii) Having export potential;

(iii) Having a positive impact on technological innovation and economic efficiency on other economic sectors;

(iv) Meet national defense and security requirements.

3. Charity activities must open accounting books and ensure transparency

The Ministry of Finance has just issued Circular 41/2022/TT-BTC (hereinafter referred to as “Circular”) guiding the accounting regime applied to social and charity activities, effective from September 1, 2022.

Circular 41/2022/TT-BTC is applicable to Social and Charity Funds established and operating in accordance with law; Campaign Committee Fund "For the Poor" at all levels (Central, Provincial, District and Commune); organizations, authorities, units and individuals mobilize, receive, distribute and use voluntary contributions to carry out social and charity activities.

According to the Circular, all organizations, authorities, units and individuals that have activities related to mobilizing, receiving, distributing and using voluntary contributions to carry out social and charity activities must open accounting books to record all arising economic operations, make reports and public the actual receipt, distribution and use of contributions in accordance with law.

The Circular clarifies that for donations in cash, the organizations, authorities and units that mobilize and receive must fully record the actual amount received according to the actual time of contribution and details of each donor, in addition, must open a separate account at a bank or treasury to receive, distribute and use donations to carry out social and charity activities which cannot use the same account with other activities of the units.

For the donations in kind, the receiving units are responsible for ensuring the integrity and timely distribution of such in-kind items to the recipients and must be fully recorded in accordance with regulations.

Organizations, authorities, units and individuals mobilizing, receiving, distributing and using voluntary contributions to carry out social and charity activities shall comply with the provisions of this Circular since on September 1, 2022, except for organizations, authorities, units and individuals having their own accounting organization and the Campaign Committee Fund "For the Poor" at all levels, are granted an extension to the fiscal year 2023.

We hope you found this brief legal update informative.

Kind regards./.

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