LEGAL UPDATES VOL.05
JUNE, 2021
Dear Value Clients and Partners,
ADK Lawyers would like to introduce to you the Vietnam Law Legal Updates Vol.05 (June 2021) with new legal provisions with notable contents as follows:
1. Enterprises/establishments production and trading essential services and goods may continue to operate during the time of social distancing.
On June 19, 2021, the Chairman of the People’s Committee of Ho Chi Minh City (HCMC People’s Committee) issued Directive No. 10/CT-UBND dated (“Directive No. 10”) and instructed by Official Dispatch No. 3786/SYT-NVY June 20, 2021, of the Department of Health of HCMC (“Official Dispatch No. 3786”) on tightening and strengthening measures to prevent and control the Covid-19 epidemic in HCMC from the evening of June 19, 2021 to the end of June 29, 2021.
Directive No. 10 stipulated that enterprises production and trading essential goods and services can still operate during the time of social distancing but that must (a) ensure a safe distance between workers at a minimum of 1.5 meters; (b) wearing a mask at work, disinfecting and disinfecting; (c) ensuring a well-ventilated space. The heads of enterprises, establishments production and trading goods and service are responsible for applying epidemic prevention and control measures at their establishments, ensuring absolute health and safety for employees.
In particular, enterprises trading in essential goods and services under the guidance in Official Dispatch No. 3786/SYT-NVY dated June 20, 2021, of the Department of Health of HCMC (“Official Dispatch 3786/SYT-NVY”) include
(i) Establishments trading in raw materials, fuels, materials, and main services for production and circulation; establishments trading in essential goods and services (such as food, foodstuffs, pharmaceuticals) products; gasoline, oil; electricity; water; fuel, etc.);
(ii) Medical examination and treatment establishments (except for cosmetic clinics, cosmetic hospitals, cosmetology activities performed at establishments: hospitals, polyclinics, specialized clinics); pharmaceutical business and national defense and security;
(iii) Traffic and construction works;
(iv) The Bank, treasury, service establishments directly related to banking and treasury activities and supporting businesses (such as notaries, lawyers, registry, registration of secured transactions, etc.), securities, postal, telecommunications, transportation support services, import and export of goods;
(v) Funeral services. waste collection and treatment, environmental sanitation;
(vi) Convenience stores, food and necessities trading areas in supermarkets and traditional markets;
(vii) Transportation services of goods, supplies, raw materials, and products supplied to enterprises, establishments production and trading;
(viii) Services of supplying raw materials and goods for export;
(ix) Electricity and water supply services for the production and daily life;
(x) Food and beverage service establishments can operate but absolutely do not serve on-site, only serving the form of take-out and online ordering;
(xi) For the business areas of essential goods and services, which are allowed to operate but cannot open stores, but only sell goods through direct delivery to customers at construction sites, farms, production sites, animal husbandry, including Trading in building materials for construction works: Trading in materials and equipment for the electricity industry, equipment for the water industry, metal products for construction works; Trading in feed for livestock, poultry, and aquatic products.
In addition, Official Dispatch 3768 and Directive No. 10 also mention that “companies, enterprises, and corporations, including foreign-invested companies, minimize direct operations and switch to the form of work online, only going to the headquarters to handle the work that is necessary”, and “stop unnecessary meeting activities. If it is necessary to organize meetings and events, make sure not to gather more than 10 people in one room, except for important meetings authorized by local authorities”.
2. Proposing business support policies in 2021
The Ministry of Planning and Investment (MPI) has proposed some solutions and policies to support enterprises development in the coming time in the Draft Report on Enterprises Development in 2020 and the first 5 months of 2021. Accordingly, the Prime Minister is proposed to consider and assign relevant ministries, departments, and organizations to continue to accompany in researching and implementing synchronous solutions to ensure dual goals: support for enterprises to stabilize, maintain and develop production and trading; while ensuring safe and effective epidemic prevention and control, specifically:
(i) Implement flexible measures to prevent and control the Covid-19 epidemic, create conditions for enterprises to stabilize and maintain production and trading activities. The Ministry of Health urgently studies and submits to the Government a mechanism to speed up the vaccination process for employees, the vaccine priority plan for employees in industrial parks, and international experts, employees in enterprises often have to go on business trips abroad and interact with foreigners.
(ii) Loan restructuring and loan interest support: (a) allow the structure of loans and debt expansion for debts in 2020-2021, do not transfer the debt group until the end of December 31, 2021. Applying capital support solutions for enterprises: Reduce from 3% to 5% of the loan interest rate; Restructure the repayment period; Retention of debt category; New loans to supplement working capital to restore production and business for enterprises; (b) expanding the object to receive a 2% reduction in direct and indirect lending interest rates, not only for small and medium-sized enterprises but also for businesses in industries directly affected by the epidemic such as aviation and tourism, hotel, transportation; (c) studying a mechanism to support interest rates of about 4% for credit loans in 2021-2023 to help private airlines settle liquidity, maintain resources to operate and develop; (d) implement a policy to support people facing difficulties due to the Covid-19 epidemic by removing the condition that employees participating in social insurance are forced to stop working for 01 consecutive month or more during the period from April 1, 2020, to December 31, 2020, to encourage and support enterprises to loan to pay salaries for employees and maintain production.
(iii) Exemption and reduction of CIT, VAT, land rent, import and export tax, environmental protection tax: (a) reduction of 30% of corporate income tax payable in 2021 for enterprises, cooperatives, or organizations with revenue in 2020 not exceeding 200 billion VND; (b) continue applying and amend the policy of reducing land rents by 15% for those who stop production and business activities for 15 days or more due to the impact of the covid-19 epidemic; (c) continue to apply regulations on import tax exemption for enterprises importing components on the production of ventilators to serve the prevention and control of the Covid-19 epidemic from the time the Prime Minister announced the epidemic; (d) studying and developing a policy to reduce 50% of the VAT in 2021 for enterprises in the industry that are seriously affected by the epidemic, such as airlines and hotels to reduce service prices, stimulate demand and support domestic tourism; (e) proposes localities to reduce VAT to 0% for 6 months for transport enterprises, reduce registration fees for new cars registered for transport business by 50%; (f) continue the environmental protection tax rate on flying fuel until the end of December 31, 2021.
(iv) Extension, reduction of fees and charges payable, deductible expenses, deposits. (a) guidance on deductible expenses when determining taxable income subject to corporate income tax for expenses that enterprises and organizations’ support or sponsor for Covid-19 epidemic prevention and control activities; (b) guidance on suspending social insurance premiums for those affected by the Covid-19 epidemic until the end of December 2021; (c) allow enterprises to extend trade union premiums and reduce trade union fees by 50% in 2020-2021; (d) for transport enterprises to be exempt from road maintenance until the end of December 2021; (e) adjustment to the prolongation of the inspection period for transport business cars; (f) postponing the time limit for installing cameras for passenger cars with 9 seats or more; (g) allow the prolongation of time to reduce 50% of fees for take-off for take-off, put-on, and flight control services along with the time of applying the minimum price of VND 0 for specialized aviation services on the list of state regulations on price brackets until the end of 2021.
3. Regulations on Rules of Origin of Goods in The Vietnam - UK Free Trade Agreement (UKVFTA)
On June 11, 2021, the Ministry of Industry and Trade issued Circular No. 02/2021/TT-BCT on the Rules of Origin of Goods in the Free Trade Agreement between Vietnam and the United Kingdom and Northern Ireland (UKVFTA), the effective from June 27, 2021.
(i) Certification Method: The exporter self-certification the origin of goods as prescribed when the goods are of Vietnamese origin and meet other regulations of UKVFTA when importing in member countries. The exporter self-certification of the origin of goods on invoices, delivery notes, or other commercial documents has sufficient information about the goods, by typing, stamping, or printing the contents of the declaration the origin of goods on the documents.
(ii) Certification Mechanism
a) Regulations on self-certification of origin for goods of Vietnamese origin imported into the UK are entitled to tariff incentives under UKVFTA:
- Shipments valued at less than 6,000 EUROS: any exporter is allowed to self-certification of origin;
- Shipment valued at over 6,000 EUROS: documents of self-certification of origin issued by agencies and organizations authorized by the Ministry of Industry and Trade and prescribed by the Ministry of Industry and Trade.
b) Regulations on self-certification of origin for goods of UK origin imported into Vietnam are entitled to tariff incentives under UKVFTA (goods imported into Vietnam):
- Shipments valued at less than 6,000 EUROS: any exporter is allowed to self-certification of origin;
- Shipments valued at over 6,000 EUROS: only exporters registered in electronic databases by UK regulations after the UK notified Vietnam of the certification mechanism for goods originating from the UK to self-certification of origin.
(iii) UKVFTA Preferential: In case the goods are of origin, they will be entitled to preferential treatment under UKVFTA without submitting the certificate of origin:
a) Goods sent in small pieces from individuals to individuals or personal luggage of the traveler, on the condition that such goods are not imported in commercial form, are declared to meet the provisions of this Circular and there is no doubt about the authenticity of such declaration;
b) In-person imports include only the personal consumer products of the recipient or the traveler or his or her family if the nature and quantity of such products may be evidence that the product is not intended for commercial purposes;
c) The total value of goods mentioned at a) and b) this item must not exceed:
- 500 EUROS for small parcels or 1,200 EUROS for goods that are part of the personal luggage of the traveler upon entry into the UK;
- 200 USD for small parcels and goods that are part of a traveler's personal baggage upon entry into Vietnam.
(iv) Declare and post documents: Within 03 working days from the date of self-certification of origin, exporters shall declare, and post documents self-certification of origin of goods and documents related to export shipments as prescribed from Article 15.1.[c] to Article 15.1.[h] of Decree No. 31/2018/ND-CP on the system of management and issuance of electronic certificates of origin at www.ecosys.gov.vn of the Ministry of Industry and Trade.
(v) The Documents’ validity period: The self-certification of origin is valid for 12 months from the date of release in the exporting member country. At the same time, to enjoy tariff incentives under UKVFTA, these documents must be submitted to the Customs Authorities of the importing Member State for 02 years or as prescribed by an estimated import member from the time the goods are exported and put into the territory where the importing members are estimated. Customs Authorities may request translations if the certificate of origin is not in English.
We hope this brief Legal Update is helpful information for you.
Best regards.
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