LEGAL UPDATE December 2022.
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GUIDELINES ON TAX OBLIGATIONS FOR PROVISION AND USE OF THE COMPANY’S SCIENCE AND TECHNOLOGY DEVELOPMENT FUND
The Minister of Finance promulgates the Circular No. 67/2022/TT-BTC providing guidelines on tax obligations for provision and use of the company’s science and technology development fund with the following main contents:
- The percentage of provision from science and technology development funds of state-owned enterprises is 3%-10% and that of non-state enterprises is decided by themselves but not more than 10%.
- Within 5 (five) years from the time of provision as prescribed, if the enterprise does not use or uses less than 70% of the annual fund provision, the enterprise must pay income tax to the State budget calculated on the deducted amount that is not used or is used less than 70% of the annual fund provision, and at the same time has to pay interest arising from the corporate income tax amount.
- Management of fixed assets that are formed from the fund
- In addition, the Circular also stipulates the management of Fund in case of enterprise reorganization
The Circular No. 67/2022/TT-BTC shall take effect from 23 December 2022.
WORKING TIME FOR CALCULATING BENEFITS OF REDUNDANT EMPLOYEES IN STATE-OWNED ENTERPRISES
On 29 November, 2022, the Government issued the Decree No. 97/2022/ND-CP stipulating policies for redundant employees when shifting ownership or rearranging 100% state-owned one-member limited liability companies. Accordingly, the working time to calculate the benefits for redundant employees is as follows:
- The working time for social insurance premiums as the basis for calculating the allowances specified at Point c, Clause 1 and Point b, Clause 2, Article 3 of Decree No. 97/2022/ND-CP is the period for calculating the social insurance benefits pursuant to laws.
- Working time for calculating jobless allowance or resignation allowance is specified at Point a, Clause 4, Point a, Clause 5, Article 3 and Article 4 of the Decree No. 97/2022/ND-CP.
- The working time to calculate the allowance specified at Point b, Clause 4 and Point b, Clause 5, Article 3 of the Decree No. 97/2022/ND-CP is the total time that the employee has actually worked at the re-organized enterprises.
- Actual working time at re-organized enterprises is following point a, clause 3 and clause 4 of Article 8, the Decree No.145/2020/ND-CP.
- Working time to calculate the allowances at Point c, Clause 1 and Point b, Clause 2, Point b, Clause 4 and Point b, Clause 5 of Article 3 of Decree No.97/2022/ND-CP
It is calculated by year (full 12 months), in case of odd months, from full 1 month to full 6 months, it is counted as 1/2 year, over 06 months is counted as 01 working year
The Decree No.97/2022/ND-CP shall take effect from 15/01/2023.
LUNAR NEW YEAR HOLIDAY AND NATIONAL DAY HOLIDAY IN 2023
On 07 December, 2022, the Ministry of Labor, War Invalids and Social Affairs issued the Notice No.5034/TB-LDTBXH on the Lunar New Year holiday and National Day holiday in 2023 for cadres, civil servants, public employees and employees. Specifically:
- For cadres, civil servants, public employees and employees of administrative, non-business agencies, political organizations, socio-political organizations:
- Lunar New Year starts from Friday, 20 January, 2023 (i.e. the 29th day of the month of the year of Tiger) to the end of Thursday, 26 January, 2023 (i.e. the 5th day of the first month of the year of the year of Cat). This holiday includes 05 days of the Lunar New Year holiday and 02 days of compensation for weekend days as prescribed by laws.
- National Day Holiday starts from Friday, 01 September, 2023 to the end of Monday, 04 September, 2023; This holiday includes 02 National Day holidays, 01 day of compensation for weekend day as prescribed by laws.
- For businesses and other employers:
- Lunar New Year: the options of 01 day at the end of the year of the Tiger and the first 4 days of the year of the Cat or the last 2 days of the year of the Tiger and the first 3 days of the year of the Cat or the last 3 days of the year of the Tiger and the first 2 days of the year of the Cat.
- National Day Holiday: Saturday, 02 September, 2023 and one of two days: Friday, 01 September, 2023 or Sunday, 03 September, 2023.
- It is required to notify the employee about the holiday option at least 30 days in advance; If the weekend day coincides with a public holiday or Tet, one extra day will be compensated for on the next working day as prescribed.
CODE OF PROFESSIONAL ETHICS FOR BAILIFF
On 01 November, 2022, the Minister of Justice issued the Circular No.08/2022/TT-BTP on Code of Professional Ethics for bailiffs. In which, it stipulates what the bailiff are not allowed to do in relation to the requester, including:
- Harass, cause difficulties and troubles for requesters.
- Receive or demand any additional money or benefits from the requester in addition to the costs already recognized in the contract.
- Receive money or any other benefit from a third person to make or not fulfill a request.
- Accept the request in case the purpose and content of the request violate the law, is contrary to social ethics and not in accordance with the duties and rights of the bailiff.
- Make bailiff, verify civil judgment enforcement conditions, enforce court judgments and decisions related to their own rights and interests with the requester, his/her relatives, including: Wife, husband, children, adopted children; father, mother, adoptive father, adoptive mother, maternal grandparents, paternal grandparents, uncle, aunt, uncle and brother, sister of the Bailiff, of his wife or husband of the Bailiff; nephew of the Bailiff and those who call the Bailiff as grandparents, uncles, aunts.
- Advice, instigate, collude, create conditions for the requester to perform illegal acts, infringing upon the legitimate rights and interests of other organizations and individuals.
- Pressurize, coerce, deceive, threaten, discount or make promises to entice a requester to use the service
- Collude with the requester, relevant people to falsify the contents of the bailiff, the performed work record or other fraudulent acts.
- Intentionally execute against the contents of a judgment or decision; delay or extend the time for settlement of the assigned judgment enforcement with no legal basis.
- Other acts prohibited by law
The Circular No.08/2022/TT-BTP shall take effect from 22 December, 2022.
ADJUSTMENT TO RCEP C/O FORM AND CONTINUATION SHEET
On 18 November, 2022, the Minister of Industry and Trade issued the Circular No. 32/2022/TT-BCT amending the Circular No.05/2022/TT-BCT on Rules of Origin of Goods in the Regional Comprehensive Economic Partnership (RCEP).
Accordingly, it replaces a number of appendices related to certification and inspection of goods origin in the Circular No. 05/2022/TT-BCT as follows:
- Replace Appendix I on Specific Rules at Point a, Clause 1, Article 4 of the Circular No.05/2022/TT-BCT by the Appendix I attached to the Circular No.32/2022/TT-BCT.
- Replace the Appendix III on the RCEP C/O form and Continuation Sheet at point c, clause 1, Article 4 of the Circular No.05/2022/TT-BCT by the Appendix II attached to the Circular No.32/2022 /TT-BCT.
The list of agencies and organizations issuing RCEP C/O form of Vietnam is updated on the Ministry of Industry and Trade’s electronic certification of origin management and issuance system at https://ecosys.gov.vn.
The Circular No.32/2022/TT-BCT shall take effect from 01 January, 2023.
IDENTIFYING ILLEGAL MONETARY BENEFITS FROM ADMINISTRATIVE VIOLATIONS IN COMMERCE
On 02 November, 2022, the Minister of Finance issued the Circular No.65/2022/TT-BTC guiding the Decree No.98/2020/ND-CP on penalties of administrative violations in commercial activities and products export and trade in counterfeit and banned goods and consumers’ interest protection.
Accordingly, the amount of illegal profit obtained in money is the total amount of money that an organization or individual earns from an administrative violation act and is calculated by the amount obtained from the illegal transfer, consumption of goods, and provision of services after deducting direct costs constituting valid goods and services.
The basis for determining the amount of money an infringing organization or individual earns from committing an administrative violation is equal to (=) the quantity of goods and services transferred or consumed multiplied by (x) the unit price of the goods, services minus (-) direct costs constituting the good or service.
The Circular No. 65/2022/TT-BTC shall take effect from 01/01/2023.
ELECTRICITY PURCHASE CONTRACT PRICE TO COMPARE TO BASE YEAR ELECTRICITY GENERATION PRICE FRAMEWORK
On 08 November 2022, the Minister of Industry and Trade issued the Circular No. 31/2022/TT-BCT amending the Circular No.57/2014/TT-BCT regulating methods, procedure for constructing and issuing generation price framework and the Circular No.57/2020/TT-BCT regulating methods for identifying electricity generation price, electricity purchase contract.
- Accordingly, the electricity purchase contract price in comparison to the base year electricity generation price framework is regulated as follows:
- The electricity purchase contract price must be within the electricity generation price framework in the base year of the power plant promulgated by the Minister of Industry and Trade;
- In which, the electricity purchase contract price of the power plant in comparison to the electricity generation price framework of the base year is calculated on the basis of the cost components corresponding to the cost components for calculating the electricity generation price framework.
- In case the base year of a thermal power plant does not have an electricity generation price framework, the electricity purchase contract price of the thermal power plant is calculated and converted on the basis of corresponding cost components to compare to the electricity generation price framework of the most recent year of that type of power plant. (New content)
- For commenced projects but not under any electricity purchase contract before the validity of this Circular. (New content).
- Electricity purchase contract price shall be within electricity generation price framework of the year of electricity purchase contract negotiation; In which the electricity purchase contract price of the thermal power plant to compare to electricity generation framework is calculated and converted on the basis of corresponding cost components to corresponding cost components of electricity generation price framework.
The Circular No.31/2022/TT-BCT shall take effect from 28 December 2022.
LEGAL PROVISIONS ON RISK MANAGEMENT OF INSURERS
On 16 November, 2022, the Minister of Finance issued the Circular No.70/2022/TT-BTC regulating risk management, internal control and internal audit of insurers and reinsurers.
One of the prominent regulations is the policy and internal regulations on risk management. Accordingly, insurers, reinsurers and foreign branches must develop risk management policies and internal regulations on risk management as follows:
- Risk management policies of insurers, reinsurers and foreign branches must meet the provisions of law.
- The internal regulations on risk management include the following:
- Functions, tasks, decentralization mechanism, decision authority and responsibility of individuals and departments in risk management activities of insurers, reinsurers and foreign branches
- The process of identifying, measuring, monitoring and supervising risks related to material risks; reporting on information exchange, feedback on risk changes and risk settlement;
- Specific risk limits for each type of material risk and related risks, and the correlation between those risks.
- Measures to control risks arising from business activities and control individuals and departments involved in those activities.
- Backup plans for emergency situations to ensure business continuity of insurers, reinsurers and foreign branches.
- Internal reporting mechanism on risk management.
The Circular No. 70/2022/TT-BTC shall take effect from 01 January 2023.
REGULATIONS ON DEPOSITORY AND USE OF VALUABLE PAPERS AT STATE BANK OF VIETNAM
On November 30, 2022, the State Bank of Vietnam issued the Circular No. 16/2022/TT-NHNN regulating the depository and use of valuable papers at the State Bank of Vietnam.
Accordingly, valuable papers deposited at the State Bank include:
- State Bank Bills;
- Government Bonds;
- Bonds guaranteed by the Government to pay 100% of principal and interest upon maturity;
- Local government bonds used in transactions of the State Bank as decided by the Governor from time to time; (New content)
- Special bonds, bonds issued directly to debt selling credit institutions to buy bad debts at market prices of Asset Management Companies of Vietnamese credit institutions (New content)
- Bonds issued by commercial banks in which the State holds more than 50% of charter capital (except for commercial banks that are merged forcefully); bonds issued by credit institutions (except specially controlled credit institutions) and other enterprises. (New content)
- Other valuable papers as decided by the Governor of the State Bank from time to time.
The Circular No. 16/2022/TT-NHNN shall take effect from 17 January 2023 and replace the Circular No. 04/2016/TT-NHNN dated 15 April 2016.
CONDITIONS FOR SPECIAL BONDS AS THE BASIS FOR REFINANCING
On 30 November, 2022, the Governor of the State Bank of Vietnam issued the Circular No.15/2022/TT-NHNN on refinancing on the basis of special bonds of the Asset Management Companies of Vietnamese Credit Institutions.
Accordingly, special bonds used as a basis for refinancing or refinancing extension must fully satisfy the following conditions:
- Special bonds legally owned by credit institutions and being deposited at the State Bank’s Transaction Office.
- Not being special bonds in the payment process.
- Not being in the list of special bonds that the credit institution is requesting the State Bank to consider extending the term according to the State Bank’s regulations on the purchase, sale and handling of bad debts of the Assets Management Companies of Vietnamese credit institutions (hereinafter referred to as Asset Management Company).
- On the date the credit institution prepares the list of special bonds as a basis for refinancing or refinancing extension and the date the credit institution updates the list of special bonds as prescribed in Clause 5, Article 10 of Circular 15 2022/TT-NHNN, the remaining term of the special bond is longer than the time limit for refinancing or refinancing extension for at least 06 months
The Circular No. 15/2022/TT-NHNN shall take effect from 17 January 2023 and replace the Circular No. 18/2015/TT-NHNN dated 22 October 2015.
REGULATION QCVN 06:2022/BXD ON FIRE SAFETY WITH HOUSES AND CONSTRUCTIONS
On November 30, 2022, the Minister of Construction issued Circular 06/2022/TT-BXD on QCVN 06:2022/BXD National Technical Regulations on Fire Safety for Houses and Works. In particular, the arrangement of emergency exits for karaoke service providers and discos must ensure all of the following requirements:
- The floors of karaoke houses and discos must have at least two exits.
- It is allowed from each floor to have an emergency exit, when the following conditions are satisfied simultaneously:
- For buildings with a height of fire protection not exceeding 15 m, the area of each floor under consideration must not be larger than 300 m2. For buildings with a height of fire protection from over 15 m to 21 m, the area of each floor under consideration must not be larger than 200 m2.
- The whole house is protected by an automatic fire-fighting system.
- The maximum number of people on each floor does not exceed 20 people.
- There must be at least one emergency exit from the floors leading to an open balcony, or leading to a safe area on an open terrace, or leading to a staircase of type 3.
Noted: Open balcony or open terrace means that it is open to the open air and the covering part (if any) must ensure easy escape and rescue when the firefighting force approaches.
Circular 06/2022/TT-BXD takes effect from January 16, 2023, and replaces Circular 02/2021/TT-BXD dated May 15, 2021.
LIST OF NEW LEGAL DOCUMENTS
|Type of document||No.||Date of issue||Content||Effective date|
|Decree||97/2022/ND-CP||29/11/2022||Stipulating policies for redundant employees when shifting ownership or rearranging 100% state-owned one-member limited liability companies||15/01/2023|
|Decree||99/2022/ND-CP||30/11/2022||On registration of security measures||15/01/2023|
|MINISTRY OF FINANCE|
|Circular||65/2022/TT-BTC||02/11/2022||Guiding the Decree No.98/2020/ND-CP on penalties of administrative violations in commercial activities and products export and trade in counterfeit and banned goods and consumers’ interest protection||01/11/2023|
|Circular||67/2022/TT-BTC||07/11/2022||Providing guidelines on tax obligations for provision and use of the company’s science and technology development fund with the following main contents||23/12/2022|
|Circular||70/2022/TT-BTC||16/11/2022||Regulating risk management, internal control and internal audit of insurers and reinsurers.||01/01/2023|
|Circular||72/2022/TT-BTC||30/11/2022||Suspending the effect of the Circular No. 31/2022/TT-BTC dated 08 June, 2022 issued by the Minister of Finance issuing the List of Vietnam’s import and export goods.||01/12/2022|
|MINISTRY OF INDUSTRY AND TRADE|
|Circular||30/2022/TT-BCT||04/11/2022||Amending and supplementing a number of articles of the Circular No.57/2018/TT0BCT dated 26 December, 2018 of the Minister of Industry and Trade detailing a number of articles of Decrees related to tobacco trading||20/12/2022|
|Circular||31/2022/TT-BCT||08/11/2022||Amending the Circular No.57/2014/TT-BCT regulating methods, procedure for constructing and issuing generation price framework and the Circular No.57/2020/TT-BCT regulating methods for identifying electricity generation price, electricity purchase contract||28/12/2022|
|Circular||32/2022/TT-BCT||18/11/2022||Amending the Circular No.05/2022/TT-BCT on Rules of Origin of Goods in the Regional Comprehensive Economic Partnership (RCEP).||01/01/2023|
|MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS|
|Notice||5034/TB-LĐTBXH||07/12/2022||The Lunar New Year holiday and National Day holiday in 2023 for cadres, civil servants, public employees and employees|
|MINISTRY OF CONSTRUCTION|
|Circular||06/2022/TT-BXD||30/11/2022||QCVN 06:2022/BXD National Technical Regulations on Fire Safety for Houses and Works||16/01/2023|
|MINITRY OF JUSTICE|
|Circular||08/2022/TT-BTP||01/11/2022||Code of Professional Ethics for Bailiffs.||22/12/2022|
|STATE BANK OF VIETNAM|
|Circular||15/2022/TT-NHNN||30/11/2022||Refinancing on the basis of special bonds of the Asset Management Companies of Vietnamese Credit Institutions||17/01/2023|
|Circular||16/2022/TT-NHNN||30/11/2022||Regulating the depository and use of valuable papers at the State Bank of Vietnam.