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POLICY FOR INCLUDING BUSINESS INVESTMENT IN AGRICULTURE AND RURAL IN VIETNAM.

The Ministry of Planning and Investment is collecting comments from the people on the draft Decree on policies to encourage enterprises to invest in agriculture and rural areas to replace Decree No. 57/2018/ND-CP.

According to the draft, preferential and supportive policies include exemption and reduction of land rent and water surface rent of the State.

Enterprises that lease land or water surface from the State for the implementation of agricultural projects with investment incentives shall be exempted from land rent or water surface rent for one-half (1/2) of the lease period, counting from the date the State has a decide to lease land, rent water surface.

Enterprises with investment projects in agriculture and rural areas receive capital contribution with land use rights of households and individuals to form areas of raw materials for production and processing of agricultural products, and are supported by the State for construction funding. The infrastructure of the raw material area is as follows. The support level is 50 million VND/ha, not more than 40% of the total project investment, up to 10 billion VND/project.

For Interest rate support period from the time of requesting support, Up to 9 years for special agricultural projects with investment incentives, up to 7 years for agricultural projects with investment incentives and up to 5 years for the Agricultural Project to encourage investment. The interest rate support limit does not exceed 70% of the total loan capital of the project．

https://nangluccanhtranh.chinhphu.vn/Chinh-sach-va-cuoc-song/Chinh-sach-khuyen-khich-doanh-nghiep-dau-tu-vao-nong-nghiep-nong-thon/438832.vgp

Documentary Editorial Board, DBRC「 Researching on Accounting, Taxes, Legal, Finances in Vietnam」, Dong Du International Accounting & Legal Consulting Group Vietnam, A member of OneSMP Singapore, Southeast Asia Business Consulting Network (www.japanvietnam.com.vn)

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LIFE INSURANCE WITHOUT VALUE-ADDED TAX

Article 14 of the Law on Insurance Business No. 24/2000/QH10 dated December 9, 2000 stipulates: “Insurance contracts must be made in writing. Proof of entering into an insurance contract is an insurance certificate, insurance policy, telegram, telex, fax and other forms prescribed by law.

Article 15 of the Law on Insurance Business No. 24/2000/QH10 stipulates that for time of arising insurance liability, Insurance liability arises when an insurance contract has been concluded or when there is evidence that the insurance enterprise has accepted insurance and the insurance buyer has paid the insurance premium, unless otherwise agreed in the insurance contract.

Clause 1, Article 1 of Law No. 31/2013/QH13 dated June 19, 2013 amending and supplementing a number of articles of the Law on Value-Added Tax with provisions on subjects not subject to value-added tax, including life insurance, health insurance, learner insurance, other insurance services related to people; livestock insurance, crop insurance, other agricultural insurance services; insurance for ships, equipment and other necessary tools for direct fishing.

Based on the above provisions, life insurance is not subject to value added tax. The insurance receipt is also a form of invoice, so the insurance company is not required to issue a value-added invoice for the premium.

http://thoibaotaichinhvietnam.vn/pages/tien-te-bao-hiem/2021-07-16/bao-hiem-nhan-tho-thuoc-doi-tuong-khong-chiu-thue-gia-tri-gia-tang-107505.aspx

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BANK AGREEMENT REDUCES LOAN RATE FROM JULY 2021 IN VIETNAM

Commercial banks agreed to reduce lending rates to support businesses and people to overcome difficulties. This interest rate cut will focus on businesses that are heavily impacted by the Covid-19 pandemic.

On July 12, the Banking Association held a meeting with credit institutions (CIs) as members to discuss and agree on the method and time to reduce lending interest rates for existing loans in the past 5 years occurred until 2021 year-end.

At the meeting, banks agreed that the interest rate reduction will be directed to those affected by the Covid-19 epidemic. Depending on the affected subjects, banks will have appropriate interest rate reductions. The deadline for reducing interest rates will be in early July until the end of 2021.

In other hand, the level of savings interest rates in July has not changed much. Some banks adjusted deposit interest rates, but only at a slight increase or decrease. The adjustment of savings interest rates to increase and decrease alternately in banks is a normal situation, depending on the capital mobilization needs of each bank in each period.

Recently, there has been a proposal to bring the savings interest rate to 0%, but the deposit rates at many banks have not only decreased but also tended to increase. The trend of increasing deposit interest rates has existed since the end of the second quarter of 2021 and will continue in the coming time. According to SSI Securities Company, deposit interest rates may increase from the beginning of the third quarter of 2021 with an increase of about 0.5 percentage points while lending rates will remain stable in the second half of this year.

https://vietnamnet.vn/

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SYNCHRONOUSLY TERMINATE PAPER BILLS IN 6 PROVINCES, CITIES OF VIETNAM.

It is expected that by the end of 2021, the electronic invoice system will be deployed in advance at tax departments in 6 provinces and cities (Hanoi, Ho Chi Minh City, Quang Ninh, Hai Phong, Phu Tho and Binh Dinh) in order to completely prevent fraud on paper invoices.

According to the provisions of Decree 123/2020/ND-CP on e-invoices and documents issued by the Government, from July 1, 2022, organizations and individuals selling goods and providing services are obliged to　issue an invoice to the buyer. The seller of goods and services must also publicize how to look up and receive the original file of the seller’s electronic invoice to the buyer of goods or services, reporting the use of invoices to the tax authority directly managing in case of purchasing invoices from the tax authority according to the prescribed form.

Decree 123 also requires the buyers of goods and services to request sellers to make and deliver invoices when purchasing goods and services, providing accurate information necessary for the seller to invoice; signing the invoices with all contents in case the parties have an agreement on the buyer’s signature on the invoice.

https://vietnamnet.vn/

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PROCESSING THE PROGRESS OF EQUITIZATION AND DISTRIBUTION IN VIETNAMESE STATED-ENTERPRISES

Regarding the divestment situation, the accumulated total divestment from 2016-2020 has divested 27,312 billion dong from enterprises, earning 177,397 billion dong, 6.5 times higher than book value, which includes divestment capital of the State Capital Investment Corporation (SCIC) in 136 enterprises (costing 6,758 billion VND, earned 37,185 billion VND). Accumulated in the first 6 months of 2021, businesses have divested with a value of 286.6 billion dong, earning 2,165 billion dong.

Currently, the system of legal mechanisms and policies to serve the restructuring process of SOEs has been improved in a stricter direction, enhancing publicity and transparency in the equalization process, correctly and fully calculating the value of enterprises when equitizing, separating the process related to land from the process of equitizing, while SOEs have not prepared the resources to apply, leading to a longer implementation time.

Proposing solutions to speed up the equitizing, divestment, and restructuring of SOEs in the last 6 months of 2021, the Ministry of Finance proposed the Prime Minister to issue an official dispatch to direct and urge ministries, sectors and localities. The method continues to promote equitizing and divestment of state capital in enterprises.

On the other hand, in terms of mechanisms and policies, in the short term, the Ministry of Finance proposes to the Prime Minister to soon issue important mechanisms and policies such as: Decision on criteria, list of classification of state-owned enterprises and enterprises with state capital, public non-business units; Decision approving the list of equitized enterprises implemented and divestment in the period of 2021 – 2025; Decision approving the SOE restructuring scheme, focusing on economic groups and State Corporations for the period of 2021 – 2025 so that representative agencies and enterprises can have a basis for implementation; reviewing, summarizing and proposing amendments and supplements to Law No. 69/2014/QH13.

https://www.mof.gov.vn/

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DETERMINATION OF TAX PRICE IN TAX MANAGEMENT FOR ENTERPRISES WITH INTERNAL TRANSACTIONS?

On June 18, 2021, the Ministry of Finance issued Circular No. 45/2021/TT-BTC guiding the application of the prior agreement on tax calculation method (APA) in tax administration for associate transactions.

According to Circular No. 45/2021/TT-BTC, transactions proposed to apply APA include: Affiliate transactions specified in Clause 2, Article 1 of Decree No. 132/2020/ND-CP; and at the same time satisfy the following conditions. The actual transaction has arisen in the taxpayer’s production and business activities and will continue to take place during the period of application of the APA.

Transactions that have a basis to determine the nature of the transaction determine tax obligations and have a basis for analysis, comparison and selection of independent comparable as prescribed in Articles 6 and 7 of Decree No. 132 2020/ND-CP, based on information and data in compliance with the provisions of Point b, Clause 6, Article 42 of the Law on Tax Administration.

Transactions are not subject to tax disputes or complaints. And transactions are also made transparently, not for the purpose of evading, avoiding taxes or taking advantage of Tax Agreements.

Dossier of application for APA shall be presented in Vietnamese. In case of application for bilateral or multilateral APA, the English version shall be included. Taxpayers affix their seals for certification and are responsible for the content of the translation.

Circular No. 45/2021/TT-BTC also stipulates in detail the exchange and negotiation of APA contents with taxpayers or partner tax agencies and taxpayers through the form of meetings, face-to-face meetings or by telephone, online televised or written by mail on the contents related to the taxpayer’s application for APA.

Circular No. 45/2021/TT-BTC takes effect from August 3, 2021, replacing Circular No. 201/2013/TT-BTC dated December 20, 2013 of the Ministry of Finance guiding the application of the APA Agreement in tax administration.

https://tapchitaichinh.vn/

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