Our long-standing GBA board member Dr. Oliver Massmann, Partner at Duane Morris Vietnam LCC, is sharing the most relevant legal updates with you.
- VAT reduction of 2 percent for some goods and services expected to continue
- Ministry to enhance consumer protection for sustainable e-commerce development
- Central Bank revises regulations on non-performing loan trading and handling
- Draft decree scrutinised to ensure early implementation of land law
1. VAT reduction of 2 percent for some goods and services expected to continue
Some highlines are as below:
- The Ministry of Justice held a meeting to appraise the draft resolution of the National Assembly on VAT reduction, which was chaired by Deputy Minister Tran Tien Dung.
- At the meeting, representatives from the Ministry of Finance highlighted that between 2020-30, the National Assembly had decided on a 2 percent reduction in VAT for goods and services subject to a 10 percent rate (down to 8 percent), excluding sectors like telecommunications, IT, finance, banking, insurance, real estate, metals, refined petroleum, and others subject to special consumption tax.
- The VAT reduction was a positive move, aiding in post-COVID-19 economic stabilization and promoting macroeconomic stability and growth.
- On June 4, the appraisal council members largely agreed with the proposed VAT reduction. Some suggested extending the reduction to all goods and services due to classification difficulties.
2. Ministry to enhance consumer protection for sustainable e-commerce development
Some highlines are as below:
- The Ministry of Industry and Trade will focus on enhancing consumer protection in order to maintain sustainable e-commerce development, Minister Nguyen Hong Dien said at the National Assembly’s question and answer session on June 4.
- The ministry’s statistics showed that Vietnam was one among five countries in the world with the highest e-commerce growth rates in 2023, expanding at 25 percent over 2022. The retail-ecommerce market of Vietnam was estimated at USD 20.5 billion in 2023.
- E-commerce platforms would also be required to make public policies about protection of personal data.
- Specially, the Ministry of Industry and Trade is proposing a decree on managing products imported through e-commerce and foreign sellers on the platforms, Dien said.
3. Central Bank revises regulations on non-performing loan trading and handling
Some highlines are as below:
- The State Bank of Vietnam (SBV) has issued Circular 3/2024/TT-NHNN providing the trading and handling of non-performing loans by the Vietnam Asset Management Company (VAMC) of credit institutions.
- The new circular that amends and supplements a number of articles of Circular 19/2013/TT-NHNN will take effect on July 1 this year.
- Under Circular 3/2024/TT-NHNN, the VAMC – a wholly State-owned entity under the SBV’s management and supervision – can buy only non-performing loans (NPLs) after assessing that those loans can be fully recovered and the collateral can be sold or the borrowers of the NPLs have the prospect of recovering their ability to repay the NPLs.
- Accordingly, VAMC is only allowed to buy a bad debt from credit institutions and foreign banks at the market price after it hires qualified price appraisal organizations to determine the market price of the debt, besides evaluating economic efficiency, risks and ability to recover capital from the bad debt purchase.
4. Draft decree scrutinised to ensure early implementation of land law
Some highlines are as below:
- The Deputy Prime Minister acknowledged and highly appreciated the active, direct and substantive participation of ministries, sectors, localities, associations, businesses and experts in the development, contribution and completion of sub-law documents, guiding the Land Law, the Real Estate Business Law and the Housing Law, which are proposed to take effect five months earlier than stipulated, on August 1.
- The Deputy PM requested the Ministry of Natural Resources and Environment coordinate with other ministries and sectors to supplement and complete the draft, ensuring consistency, uniformity and to avoid conflicts with other laws within the legal system.
- This includes content related to various laws such as regulations on land reclamation, ensuring consistency and uniformity in decentralisation in land management, identifying disaster prevention and climate change response projects with sea encroachment areas and the application of land requisition provisions in emergencies, disaster prevention, or force majeure situations.
- This includes regulations on national and regional planning orientation, technical and specialised planning, land recovery issues, annual land use fees for defence and security land, management and use of boundary records and maps, sea encroachment projects, handling interspersed land, short-term land fund management and contributing land use rights for project construction.