Vietnam's success in tackling the Covid-19 pandemic will help its economy recover faster than most other economies in the region, according to Oxford Economics, which specializes in global forecasts and quantitative analysis, said in a report released Wednesday.
Remarkable, last week, on 19 June 2020, The National Assembly approved Resolution 116/2020/QH14 on the reduction of Corporate Income Tax ("CIT") for the fiscal year of 2020 for enterprises, co-operatives, public services organizations, and other organizations.
The past week spotlight
Resolution on the reduction of CIT for the fiscal year 2020
On 19 June 2020, The National Assembly approved Resolution 116/2020/QH14 on the reduction of Corporate Income Tax ("CIT") for the fiscal year of 2020 for enterprises, co-operatives, public services organizations, and other organizations.
The Resolution shall be applicable for: enterprises incorporated under the law and regulation of Vietnam; organizations established under the Law on Co-operatives; public services organizations under the law and regulations of Vietnam; other organizations established under the law and regulation of Vietnam and generating income.
The mentioned above organizations shall be entitled to the 30% reduction of CIT payable for the fiscal year 2020, if the total revenue in the year does not exceed VND 200 billion.
Let’s look at some other related financial and business news during the past week:
1. MPI Minister: local groups to set sight on overseas M&A
Minister of Planning and Investment Nguyen Chi Dung urged local companies to utilise their relative advantages over foreign firms during the pandemic to go on an M&A spree and buy into promising overseas enterprises.
Deputy Prime Minister and Foreign Minister Pham Binh Minh has said that as Vietnam’s stature has increasingly improved it is now time for the country to be more selective in its FDI attraction efforts.
State-owned railway group Vietnam Railways is being derailed, with worse to come due to legal barriers, creating a thorny path for private investment inflows into the sector.
According to a source of VIR, the Committee for Management of State Capital at Enterprises is going to submit Vietnam Railways’ (VNR) new restructuring plan to the government for approval this month after several years of delay. Under the latest version of the restructuring plan, the corporation set to merge Haraco and Saratrans – the two largest train operators in Vietnam under VNR – into one joint-stock company.
4. Japanese firm to invest in protective clothing factory in Vietnam
Japan will assist apparel maker Matsuoka Corp. in producing protective clothing in Vietnam to diversify supply chains and lessen its dependence on China amid the coronavirus crisis.
Matsuoka plans to invest 3 billion JPY (28 million USD) in An Nam Matsuoka Garment Co., its Vietnamese manufacturing unit, to start production of protective wear and other items in several months, local media has reported.
5. Trade Ministry proposes to loosen barriers for foreign players in oil and petrol trade
Once the proposal of the Ministry of Industry and Trade (MoIT) is approved, the petrol and oil trading scene may see more foreign players. The MoIT has submitted the draft decree which will replace Decree No.83/2014/ND-CP on petrol and oil trading. Accordingly, the highlight of the proposal is the authorisation for foreign investors to own up to 35 per cent stake in Vietnamese oil and petrol trading companies.
No new airlines will be allowed to open in Viet Nam until 2022 at the earliest, Deputy Prime Minister Trinh Dinh Dung has announced. His ruling conforms proposals submitted by the Ministry of Transport (MoT) in May.
7. 15 Japanese firms to move China production lines to Vietnam
Vietnam is expected to attract 15 Japanese firms of different sizes that will receive Japanese government’s subsidies to shift manufacturing plants out of China to diversify its supply chain.
Of the 15 firms, six are large companies and the remaining nine are small and medium-sized enterprises. Most of the firms manufacture medical equipment while the rest produce semiconductors, phone components, air conditioners or power modules.
8. Gov’t sets up delegations to inspect public investment disbursement
Prime Minister Nguyen Xuan Phuc has decided to establish seven delegations to inspect public invstment disbursement in several ministries, agencies and localities. Specifically, the first delegation will be led by the Government chief to inspect Ho Chi Minh City, Dong Nai, and localities in the key central economic region, central highlands, and Mekong delta.
9. US companies planning to expand investment in Vietnam
An online discussion took place recently in Washington D.C. to look into post-COVID-19 investment opportunities throughout ASEAN, with some companies saying they will soon announce investment and business expansion plans in Vietnam.
10. ASEAN-wide tax race for FDI a road leading into the abyss
ASEAN countries should stop offering aggressive tax incentives in order to attract foreign funds, as it could create an unfair business climate among enterprises and lead to an acute state budget deficit.
On 14 December 2020, the Government promulgated Decree No. 145/2020/ND-CP detailing and guiding the implementation of a number of articles of the Labor Code regarding labor conditions and labor relation (“Decree 145”). Such Decree provides for labor management, labor contract, labor outsourcing, dialogue at workplace, salary, working hour & rest hour, labor discipline & material liability, female employees & gender equality, domestic worker and labor dispute.
For the upcoming 2021, we are delighted to offer this “Compliance Calendar 2021” in English and Vietnamese with the hope to help enterprises not missing any important deadlines. The issues include periodic requirements of tax and labour compliance as stipulated in the latest legal documents. Please kindly find the bilingual calendar in the Downloads section below and let us know if you have any questions about the deadlines or would like assistance in meeting them.