Highlights of legal documents in Vietnam last week (from September 6 to September 11, 2021)

1. Instructions on determination of construction costs

The Minister of Construction of Vietnam has promulgated Circular 11/2021/TT-BXD guiding the determination and management of construction investment costs.

According to this Circular, the construction costs include the detailed construction cost and the general construction cost The investor uses the construction cost system announced by the provincial People's Committee as a basis for determining and managing construction investment costs.

In case the organization determines the work construction price according to the detailed construction cost, or the general construction cost on the basis of the construction norm, the price of building materials, the cost of unit labor, the cost of machine shift and construction equipment announced by competent state agencies under Clauses 3.4 and 5, Article 8 of Circular 11/2021/TT-BXD and determined according to the following regulations:

- Prices of building materials: Encourage the selection of building materials that save mineral resources, save energy, and are environmentally friendly, but must ensure investment efficiency and meet project requirements, etc.

- Unit labor costs: In case the unit labor costs announced by a competent state agency are not suitable with the characteristics of the work, work or project, the investor shall organize the survey, determine unit labor costs according to regulations to decide to apply when determining the construction cost...

- Per-shift costs of construction machines and equipment: In case the price has not been announced or is available but not suitable to the requirements of use and construction conditions, the investor shall conduct a survey and determine the valuation of machine shift and construction equipment according to regulations to decide to apply when determining construction price of works…

See details in Circular 11/2021/TT-BXD effective from October 15, 2021.

2. Assistance for enterprises and household businesses amid Covid-19 pandemic

The Government has promulgated  Resolution 105/NQ-CP on supporting businesses, cooperatives and business households in the context of the COVID-19 epidemic.

According to this Regulation, to support cost reduction, remove financial and cash flow difficulties for enterprises, cooperatives and household businesses, the Vietnamese Government assigned the Ministry of Labour, Invalids and Social Affairs:

- Take charge and cooperate with other Ministries and authorities in proposing to competent authority and Standing committee of the National Assembly promulgation of policies on reduction of social insurance premiums or assistance from short-term surplus of the social insurance fund in order to provide timely assistance for workers, enterprises, cooperatives, household businesses and other employers in September 2021.

- Instruct Vietnam Social Security to, in September 2021; propose exemption of fines for late payment of social insurance premiums that are due in 2020 and 2021.

In addition, the Ministry of Finance of Vietnam was assigned to promptly implement policies on deferral, reduction of taxes, fees, charges and land rents after they are promulgated by competent authorities; implement policies on preferential taxes on imports serving Covid-19 prevention and control after they are ratified by the Government...

For details, see Resolution 105/NQ-CP of Vietnam, effective from September 9, 2021.

3. Deferring the term of interest exemption and reduction for borrowers affected by Covid-19

 Circular 14/2021/TT-NHNN amending Circular 01/2020/TT-NHNN on debt rescheduling, exemption and reduction of interest and fees, and retention of debt category to assist borrowers affected by Covid-19.

According to this Circular, redit institutions and FBBs shall, according to their own rules and regulations, decide reduction and exemption of interest and/or outstanding debts of the debts that arise before August 1, 2021 from extend credit (except purchases of corporate bonds) 

- Obligation to pay principal and/or interest due for payment in the period from January 23, 2020 to June 30, 2022; and

- The borrowers are not capable of fully paying the principal and/or interest by the deadline specified in the original agreement due to decrease in revenue or income caused by Covid-19.

The implementation of exemption and reduction of interest and fees for customers will be carried out until June 30, 2022.

(Previously, Circular 03/2021/TT-NHNN stipulated the exemption and reduction of interest and fees for borrowers until December 31, 2021).

Circular 14/2021/TT-NHNN of Vietnam takes effect from September 7, 2021.

4. Settlement of one-time social insurance for employees of bankrupt enterprises

 Official Dispatch 2802/BHXH-CSXH on the implementation of social insurance regime for employees at bankrupt employers owe social insurance contributions.

If a person going abroad to reside; a person suffers from one of the life-threatening diseases as prescribed by the Ministry of Health of Vietnam, then:

- Settlement of one-time social insurance benefits for the period of payment of social insurance premiums (excluding the period of outstanding payment of social insurance premiums).

- When the period of participation in social insurance is paid in full and the employee requests, he/she will be entitled to a lump-sum payment of additional social insurance benefits. The settlement of entitlement to a lump-sum social insurance supplement when the period of participation in social insurance is fully paid shall be done as follows:

+ The social insurance agency shall record and reserve the entire period of payment of additional social insurance premiums.

+ The social insurance agency shall calculate the previously settled time with the additional payment period to re-determine the new benefit rate as prescribed in Article 63 of the Law on Social Insurance 2014 when the employee wants to continue to enjoy lump-sum social insurance.  After that, the social insurance agency deducts the benefit that the employee has been entitled to in proportion to the previously calculated time and additionally pays the difference to the employee.

For employees reaching the retirement age but have not yet paid full 20 years of social insurance payment; Employees participated in compulsory social insurance after 1 year of leave but have not paid full 20 years of social insurance, they shall be settled as in the above case.

 Official Dispatch 2802/BHXH-CSXH was promulgated on September 6, 2021.

Bao Ngoc

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