legal updates

Covid-19: Newly issued policies to support employers from the Unemployment Insurance Fund

On September 24th, 2021, the Government issued Resolution No. 116/NQ-CP on policies to support employees and employers affected by the Covid-19 pandemic from the Unemployment insurance fund. Accordingly, from October 1st, 2021, enterprises facing difficulties due to Covid-19 are entitled to reduce the unemployment insurance premium for employees to 0%.

The employers governed by the Resolution 116/NQ-CP are employers specified in Article 43 of the Employment Law who has been participating in unemployment insurance before October 1st, 2021, with exceptions of state agencies and political organizations, socio-political organizations, people’s armed forces units and public non-business units whose recurrent expenditures are guaranteed by the state budget.

The said employers are entitled to reduce the contribution rate from 1% to 0% of the monthly salary fund of employees who are subject to unemployment insurance. The duration of payment reduction is 12 months, from October 1st, 2021 to the end of September 30th, 2022.

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This legal update is for general information only and is not a substitute for legal advice.

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Restructuring the debt term, exempting, reducing interest and fees, maintaining the classified debt type to assist customers affected by the Covid-19 epidemic

On September 7th, 2021, the State Bank of Vietnam issued Circular No. 14/2021/TT-NHNN (“Circular 14/2021/TT-NHNN”), which came into effect on the same issuance day, to amend and supplement some provisions of Circular No. 01/2020/TT-NHNN dated March 13th, 2020 on credit institutions and foreign bank branches rescheduling the debt term, exempting, reducing interest and fees, maintaining classified debt types to assist customers affected by the Covid-19 pandemic, with the following new points:

Firstly, credit institutions, foreign bank branches reschedule debt terms for the principal and/or interest balance of the debt that meets all of the following conditions:

  • Arising before August 1st, 2021, from lending and financial leasing activities instead of arising from June 10th, 2020 as before.
  • The obligation to repay principal and/or interest arises during the period from January 23th, 2020 to June 30th, 2022 instead of only arising until December 31st, 2021.
  • The outstanding balance of the debt may be rescheduled for repayment in one of the following cases:
    • The outstanding balance of the debt is undue or has been overdue for not more than 10 days from the payment due date or the debt term according to the contract or agreement (except the cases b, c, d mentioned below).
    • The outstanding balance of the debt arises before January 23th, 2020 and becomes overdue from January 23th, 2020 to March 29th, 2020.
    • The outstanding balance of the debt arises from January 23th, 2020 to June 10th, 2020 and becomes overdue before May 17th, 2021.
    • Supplementing the outstanding balance of the debt arising from June 10th, 2020 to before August 1st, 2021 and becoming overdue from July 17th, 2021 to September 7th, 2021.
  • The customer is assessed by the credit institution, foreign bank branches as incapable of paying the principal and/or interest on schedule under the agreement due to a decrease in revenue, income caused by Covid-19 pandemic.
  • The customer applies for rescheduling of the repayment debt term and is assessed by the credit institution or foreign bank branches to fully pay the principal and/or interest after the debt is rescheduled.
  • The credit institution, foreign bank branches shall not reschedule the debt term that violates regulations of law.
  • The rescheduling period (including debt deferral) shall be appropriate for the impacts of the Covid-19 pandemic on the customer. It shall not exceed 12 months from the day on which rescheduling is granted by the credit institution, foreign bank branches, or from the original deadline for payment of the outstanding debt.
  • The debt term rescheduling shall be carried out until June 30th, 2022 instead of carrying out to December 31st, 2021 as before.

Secondly, amending the time limit for credit institutions and foreign bank branches shall decide reduction and exemption of debt interest and fees, according to their own rules and regulations, that arise before August 1st, 2021 (instead of June 10th, 2020) from credit-granting activities (except for purchasing of and investing in corporate bonds) whose principal and/or interest are due during the period from January 23th, 2020 to June 30th, 2022 (instead of December 31th, 2021) and the customers are not capable of fully paying the principal and/or interest on the schedule specified in the contract, or agreement due to decrease in revenue or income caused by Covid -19. 

At the same time, extending the time to exempting, reducing interest and fees for customers as mentioned above until June 30th, 2022 (extended by 06 months compared to before).

Thirdly, maintaining the classified debt type according to the regulations of the State Bank of Vietnam regarding the classification of debts arising in the operation of credit institutions, foreign bank branches for the debt balance which has been rescheduled the repayment debt term, and for the debt has been exempted or reduced arising from January 23th, 2020 to before August 1st, 2021.

  • Maintaining the classified debt type that is categorized on the latest day before the first rescheduling for the outstanding debt balance or overdue up to 10 (ten) days from the payment due date; 
  • Maintaining the classified debt type that is categorized on the latest day before the debt is transferred to overdue for the outstanding balance of (*) debt arising from January 23th, 2020 to before June 10th, 2020 and overdue before May 17th, 2021; and (**) debt arising from June 10th, 2020 to before August 1st, 2021 and overdue from July 17th, 2021 to before September 7th, 2021; 
  • Maintaining the classified debt type that is categorized on the latest day before the first reduction or exemption of interests on the outstanding debts arising before August 1st, 2021 from credit-granting activities (except for purchasing of and investing in corporate bonds) whose principal and/or interest are due during the period from January 23th, 2020 to June 30th, 2022 and the customers are not capable of fully paying the principal and/or interest on the schedule specified in the contract, or agreement due to decrease in revenue or income caused by Covid -19.

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This legal update is for general information only and is not a substitute for legal advice.

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Regulations on the rate, collection, payment, management and use of fees in food safety

On August 5th, 2021, the Ministry of Finance issued Circular No. 67/2021/TT-BTC regarding the collection levels, regulations for the collection, payment, management and the use of fees in food safety work which is under the management of the Ministry of Health and the Ministry of Industry and Trade (“Circular 67/2021/TT-BTC”), specific:                                                                                        

Firstly, supplementing some subjects paying fee as follows:

Organizations and individuals producing, trading, importing and exporting food shall pay the fee when submitting applications to competent authorities for issuance of the license to sell or import foods, or certifications or declarations in the food safety sector; certificates of exported foods; certificates of the fulfillment of food safety requirements; assessment of contents of television advertisements, programs recorded on tapes, disks, software or other materials, and documents used in advertising for foods, food additives, and processing aids in the medical sector.

Secondly, the business units-public is also a subject entitled to organize the collection of fees when assigned to provide fee collection services as prescribed in Circular 67/2021/TT-BTC.

Thirdly, Adjusting the level of fees in food safety and stipulating in detail at the Fee Schedule promulgated together with Circular 67/2021/TT-BTC: 

  • The level of fees tends to be lower than previous regulations.
  • Evaluating for licensing circulation, importation, certification, publication in the field of food safety without defining the case of first publication or re-announcement. 
  • Removing Appraisal fee to confirm food safety knowledge.

Circular 67/2021/TT-BTC will take effect on September 19th, 2021.

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New regulations on renovation and rebuilding of apartment buildings

On September 1st, 2021, Decree No. 69/2021/ND-CP, which was issued by the Government (“Decree 69/2021/ND-CP”) to replace Decree 101/2015/ND-CP dated October 20th, 2015 detailing the renovation and reconstruction of apartment buildings, has officially come into effect. Some outstanding contents of Decree No. 69/2021/ND-CP including:

Firstly, determining the principles of renovation and reconstruction of apartment buildings, including: 

  • Supplementing the case that apartment building is not included in the approved renovation and reconstruction plan must be immediately deconstructed due to incident, natural disaster or fire, the People’s Committee of the province must immediately relocate households away from this apartment building and then supplement to the local apartment building renovation and reconstruction plan.
  • Determining that the projects of renovation and reconstruction of apartment buildings do not require a spare land area for the construction of social houses by the law on housing.
  • In case the locality implements the project on damaged apartment buildings that are not demolished but are located in the area subject to renovation or construction synchronized with the apartment building subject to demolition according to the approved construction planning, investors may divide investment into stages to implement apartment projects.
  • In case of delay in the implementation of the investment project according to the approved decision on approval of investment project, the agency competent approving the investment project shall decide to extend or terminate the implementation of the investment project. 

Secondly, Decree 69/2021/ND-CP clearly stipulates the cases in which the apartment building must be deconstructed for reconstruction or construction of other buildings as per planning, specifically as follows:

  • The apartment building must be immediately demolished due to incidents, natural disasters, fire.
  • The apartment building runs out of its service life or has not yet expired, but there is an overall or local danger situation according to inspection conclusions of the provincial housing management agency.
  • The apartment building has damaged one of the primary structural components, including: foundation, columns, walls, beams which do not meet the requirements of normal use but are not required to be deconstructed but located in the area where the apartment building is subject to demolition.

Thirdly, competent state agencies to prepare, appraise and approve detailed planning of areas where apartment buildings and apartment complexes are required to be renovated and reconstructed.

Fourthly, clearly stipulating principles in the development and implementation of compensation plans applied to renovation and reconstruction projects of apartment buildings. At the same time, stipulating the compensation coefficient and assign local agencies based on each project area to determine this coefficient.

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This legal update is for general information only and is not a substitute for legal advice. 

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Guidance on corporate income tax arrears not yet retrospectively collected from societalized entities

On August 17th, 2021, the Ministry of Finance issued Circular No. 71/2021/TT-BTC providing guidance on corporate income tax for establishments implementing socialization that have not yet arrears in accordance with Resolution 63/NQ-CP August 25th, 2014.

Accordingly, societalized entities shall be entitled to corporate income tax incentives under laws and the Prime Minister’s decisions over periods of time in the following specific circumstances:

  • In cases where societalized entities meet the conditions according to the detailed list of types, size-related criteria and standards promulgated along with one of Decision No. 1466/QD-TTg or Decision No. 693/QD-TTg or Decision No. Decree 1470/QD-TTg shall be entitled to corporate income tax incentives for the remaining time since meeting the conditions;
  • In cases where societalized entities meet the conditions before the time when the above 03 Decisions take effect, they shall be entitled to corporate income tax incentives for the remaining time since the effective date of the Decisions;
  • In cases where societalized entities do not meet the mentioned above conditions, they shall make additional declarations of the amount of corporate income tax underpayment (if any), self-assess corporate income tax amount that must be paid or corporate income tax arrears that tax authorities will retrospectively collect until they meet the conditions stated in the Prime Minister’s Decisions.

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