Government Measures to Assist Economic Recovery under Resolution No. 43/2022/QH15 and Implementing Decree 15/2022/ND-CP: Keynotes and Implications
On 11 January 2022, Resolution No. 43/2022/QH15 on Fiscal and Monetary Policies for Supporting Socio-economic Recovery and Development Program (“Resolution No. 43/2022“) was approved by the National Assembly of the Socialist Republic of Vietnam.
The objectives of Resolution No. 43/2022 are to stimulate the rapid recovery of production activities, prioritise certain sectors, and strive to achieve these goals set out in the 2021-2025 plans: (i) maintain an average GDP growth of 6.5-7% per year, ensuring public debt levels are lower than the allowable threshold permitted under Resolution No. 23/2021/QH15; (ii) restrict the urban unemployment rate to below 4%; and (iii) maintain a stable macroeconomic environment.
A number of policies have since been implemented to support the objectives of Resolution No. 43/2022. A combination of fiscal policies targeting a reduction of Value Added Tax (“VAT“) rate in 2022 from 10% to 8% (i.e., a 2% reduction) with certain exclusions have been introduced. In addition, expenses relating to donations and sponsors in support of proactive COVID-19 efforts have been allowed to be included as deductible expenses for the purpose of calculating an enterprise’s taxable income in 2022. To implement these initiatives, Decree 15/2022/ND-CP (“Decree 15/2022“) prescribing tax exemption and reduction came into force on 1 February 2022. It deals with VAT reduction on goods and services currently subject to 10% VAT (Article 1), and expenses from donations that are allowed to be deducted for purposes of determining taxable income (Article 2).
For more information including the implications of this development, click here to read our Legal Update.
New Law Amending the Law on Investment, Law on Enterprises, and Seven Other Laws Takes Effect on 1 March 2022
On 11 January 2022, the National Assembly of Vietnam issued Law No. 03/2022/QH15 (“Law 03/2022“) amending and supplementing these laws: (i) Law on Public Investment; (ii) Law on Public – Private Partnership; (iii) Law on Investment; (iv) Law on Housing; (v) Law on Bidding; (vi) Law on Electricity; (vii) Law on Enterprises; (viii) Law on Excise Tax; and (ix) Law on Enforcement of Civil Judgements. Law 03/2022 took effect on 1 March 2022.
Among other things, the Law on Investment is amended to give more power to the local competent authorities to grant in-principle investment grants, thus making the licensing procedures less complicated and burdensome to investors. To further promote investment and development of electric vehicles, and reduce carbon emissions from fuel vehicles, Law 03/2022 also amended and supplemented the Excise Tariff as regulated in Article 7 of the Law on Excise Tax, by reducing the excise taxes for electric vehicles within five years from the date Law 03/2022 took effect (i.e. from 1 March 2022 to 28 February 2027).
For more information, click here to read our Legal Update.
Decree Revising Legal Provisions and Regulations on Real Estate Trading Activities Takes Effect on 1 March 2022
On 6 January 2022, the Government issued Decree No. 02/2022/ND-CP (“Decree 02/2022“) amending certain articles of the Law on Real Estate Business No. 66/2014/QH13 dated 25 November 2014 (“Law on Real Estate Business“). Decree 02/2022, which replaces Decree 76/2015/ND-CP (“Decree 76/2015“), took effect from 1 March 2022.
Decree 02/2022 sets out new eligibility conditions to conduct real estate business including establishing an enterprise or co-operative with a business line related to real estate, publicly disclosing and updating changes to certain specified information about the enterprise and its real estate business (e.g. real estate or real estate projects to be put out on the market and are being traded, etc.), and the requirement to only trade in eligible real estate. There is no requirement on the minimum legal capital for organisations and individuals intending to participate in real estate business.
Six types of individuals, households and enterprises who sell, lease or lease-purchase real estate in small scale and/or infrequently are exempted under Decree 02/2022 from complying with the conditions for participating in the real estate business.
For more information, click here to read our Legal Update.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
