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Gov’t joins hands with business circle

VGP – A number of polices were introduced in 2013 to support enterprises to get out of production and business stagnancy, sustain market operations and handle non-performing loans (NPLs).

February 02, 2014 10:35 AM GMT+7

 

At the beginning of the year, the Government issued Resolution 02/NQ-CP on solutions to remove difficulties against production and business, support the market development and deal with non-performing loans.

The documents offered a six-month extension of corporate tax payment scheduled for the first quarter and a three-month extension of corporate tax payment scheduled for the second and third quarters of 2013; reimbursed environmental protection tax; provided a reduction of 50% of land rent in 2013 and 2014 for economic organizations, households and individuals renting the State’s land.

The Resolution also shortened customs clearance duration, stepped up e-tax declaration; speeded up supervision, inspection and control of tax payment declaration and tax refund.

Preferential interest rates

Circular 09/2013/TT-BTC, dated January 17, 2013 amending Circular 104/2012/TT-BTC dated June 25, 2012 of the Ministry of Finance regulates interest rates of the State investment credit, export credit loans and the interest rate difference eligible for post-investment support. Accordingly, interest rate of the State’s loans for export was lowered to 10.2% from 11.4% per year.  

This Circular took effect from the date of signing.

Investors of projects borrowing State money for investment, credit for export and relevant agencies have responsibility to realize this Circular.

Streamlined administrative procedures

The Government enacted Decree 05/2013/ND-CP, dated January 9, 2013 amending and supplementing a number of Articles on administrative procedures of the Government’s Decree 43/2010/ND-CP dated April 15, 2010 on enterprise registration.

Taking effect from February 25, 2013, the Decree has changes as follows: (1) if business lines are not prohibited to trade, the business registration authorities are permitted to consider for recording into the business registration certificates; (2) information on establishment; changing the content on enterprise registration; dissolution; further issuance of common shares have to be published on the national enterprise registration portal by enterprises; (3) for cases of business suspension, enterprises shall be confirmed about the registration for operation suspension of enterprises within five days from the date of receiving valid dossiers.

According to Law No. 37/2013/QH13, dated June 20, 2013 on amendment and supplement to Article 170 of the Law on Enterprises, foreign-invested enterprises, which were established abroad before July 1, 2006 and operating under their investment license after July 1, 2006 without having needed procedures processed and want to continue to operate, must re-register before February 1, 2014.

The re-registration shall take effect from the expiry date indicated on the active investment permit.

For enterprises, which were adjusted with additional business lines in the absence of changes in the duration of operation recorded in the investment license, the adjustment and additional lines shall comply with the provisions of the law at the time amendments or supplements are made.

This Law comes into force on August 1, 2013.

Decree No. 71/2013/ND-CP enacted on July 11, 2013 regulates investing State capital in enterprises and managing finances with regards to enterprises where 100% of their charter capital is held by the State.  

Particularly, when enterprises transferred State owned capital to joint stock companies which had to register on securities transaction system whether listing or not listing on the system, they would have to carry out the process in accordance with the order matching method or negotiation through the transaction system of the Stock Exchange. In case of disvesting from companies of other types, enterprises do it by opening public auctions. If only one investor registers to buy shares or written permission from the prime minister is given, enterprises will sell shares through direct negotiation with investors.

Assisting SMEs

The PM promulgated Decision No. 601/ND-TTg dated April 17, 2013 on establishing the Small and Medium Sized Enterprise Development Fund to support small and medium sized enterprises (SMEs) .

The fund has a total charter capital of VND 2 trillion (US$ 95 million), serving to enhance the competitiveness of SMEs and create more jobs.

The fund focuses on such key areas as business environment, capacity empowerment for SMEs, corporate governance, knowledge enhancement and financing access for SMEs.

Offering favored CIT and VAT

Law No. 32/2013/QH13 on amendments and supplements to a number of articles of the Law on Corporate Income Tax (CIT) was introduced on June 19, 2013.

This amended Law on CIT shall be effective from January 1 2014 except the provision on CIT rate of 20% from July 1, 2013 for companies with certain conditions.

Summary of some main amendments and supplements to the Amended Law on CIT as follows:(1) The standard CIT rate is officially reduced by 22%; (2) There are CIT incentives applicable to investment expansion with certain conditions; (3) The rate of deductible expenses for advertisement, promotion is increased from 10% to 15%; (4) Expenses being payments to a voluntary retirement fund or a social welfare fund or a voluntary retirement insurance program for employees is deductible at certain level; (5) Non-cash payments: Expenses for input invoices of goods and services in each time valued from VND 20million must have payment document via banks in order to be considered as deductible expenses.

The National Assembly passed the Law No. 31/2013/QH13 on amending and supplementing a number of articles of the Law on Value-Added Tax dated June 19, 2013.

Accordingly, the tax rate of 0% is applicable to exported goods and services, international transport, goods and services.

The percentage for calculating VAT ranges from 1% for goods supply and distribution; 5% for construction without materials; 3% for production, transport, and services associated with goods, construction that includes materials to 2% for other businesses.

Handling non-performing loans

Decree 53/2013/ND-CP on the setting up of the Vietnam Asset Management Corporation (VAMC) was signed into law on May 18, 2013 and effective on July 9, 2013.

VAMC has a chartered capital of VND 500 billion. The SBV is the representative of the State capital in VAMC. 

VAMC is expected to play a major role in resolving the massive amount of bad debts accumulated by Vietnamese banks. ​

Decree 61/2013/ND-CP dated June 25 2013 issues regulations on financial supervision and assessment of the operation efficiency and financial information disclosure of SOEs and those with state-invested capital.

SOEs will be placed under special financial supervision in the four cases at the time of making annual financial reports or being found with financial problems.

This decree takes effect on August 15, 2013

Circular 16/2013/TT-BTC of the Ministry of Finance enacted February 8, 2013 guides the implementation of extension and reduction of some state budget receivable pursuant to Decree No. 02/NQ-CP dated January 7, 2013 of the Government on solutions to remove difficulties from production and business support the market and deal with bad debts.

Subjects will be eligible for a six-month deferral payment of CIT with respect to the arising CIT payable for Quarter I and a three-month deferral CIT payment with respect to the arising CIT payable for Quarter II and Quarter III of 2013./.

By Huong Giang