Notable documents of Vietnam in the previous week (from June 26 to July 2, 2023)

1. Vietnam to reduce VAT to 8% for several goods and services as of July 1, 2023

This is a content of Decree No. 44/2023/ND-CP dated June 30, 2023 on VAT reduction according to Resolution No. 101/2023/QH15.

According to the Decree, business establishments calculating VAT using the credit-invoice method may apply 8% VAT to goods and services that are currently applying 10% VAT, except for the following goods and services:

- Telecommunications, finance, banking, securities, insurance, trading of real estate, metals and prefabricated metal products, mining products (exclusive of coal mining), coke coal, refined petroleum, chemical products. Details are specified in Appendix I enclosed with Decree No. 44/2023/ND-CP.

- Excisable goods and services. Details are specified in the Appendix II enclosed with Decree No. 44/2023/ND-CP.

- Information technology under the law on information technology. Details are specified in the Appendix III enclosed with Decree No. 44/2023/ND-CP.

- The reduction of VAT for each category of goods and service specified in Clause 1 Article 1 of Decree No. 44/2023/ND-CP shall be consistently applied in all stages, including import, manufacture, processing and commercial business.  

Coal products mined for sale (including coal products mined and then washed, sieved and classified under a closed process before they are sold) are eligible for VAT reduction.  

Coal products in Appendix I enclosed herewith are not eligible for VAT reduction in any stages other than the mining stage.

Economic corporations applying the closed process before sale are also eligible for VAT reduction for the coal products mined for sale.

If the goods and services specified in the Appendixes I, II and III enclosed with Decree No. 44/2023/ND-CP are not subject to VAT or are subject to 5% VAT under regulations of the Law on Value-Added Tax, they shall apply the Law on Value-Added Tax and are not eligible for VAT reduction.

See more details in Decree No. 44/2023/ND-CP, effective as of July 1, 2023 until the end of December 31, 2023.

2. Vietnam to adjust pensions, social insurance allowances, and monthly allowances as of July 1, 2023

On June 29, 2023, the Government of Vietnam promulgated Decree No. 42/2023/ND-CP on adjustments to pensions, social insurance allowances, and monthly allowances.

According to the Decree, from July 1, 2023, pensions, social insurance allowances, and monthly allowances will be adjusted as follows:

+ Increased by 12,5% compared to the amount of June 2023 (adjusted in Decree No. 108/2021/ND-CP) for persons prescribed in Clause 1 Article 1 of Decree No. 42/2023/ND-CP.

+ Increased by 20,8% compared to the amount of June 2023 (was not adjusted in Decree No. 108/2021/ND-CP) for persons prescribed in Clause 1 Article 1 of Decree No. 42/2023/ND-CP.

- From July 1, 2023, persons prescribed in Clause 2 Article 1 of Decree No. 42/2023/ND-CP that have their pensions, social insurance allowances, and monthly allowances reduced to below 3.000.000 VND per month after the adjustment according to Clause 1 Article 2 of Decree No. 42/2023/ND-CP, will have their pensions, social insurance allowances, and monthly allowances:  

+ Increased by 300.000 VND per person per month for those who receive below 2.700.000 VND per person per month;  

+ Increased to 3.000.000 VND per person per month for those who receive from 2.700.000 VND per person per month to below 3.000.000 VND per person per month.

See more details in Decree No. 42/2023/ND-CP of the Government of Vietnam comes into force as of August 14, 2023 and replaces Decree No. 108/2021/ND-CP. Regulations prescribed in Decree No. 42/2023/ND-CP shall be implemented as of July 1, 2023.

3. New regulation of Vietnam on requirements for consideration for promotion of inspector ranks

This is a content of Decree No. 43/2023/ND-CP dated June 30, 2023 guiding the Law on Inspection.

According to Article 7 of Decree No. 43/2023/ND-CP, requirements for the promotion of inspector ranks are as follows:

- An inspector meeting standards and requirements prescribed in Articles 39, 40, and 41 of the Law on Inspection may be considered for rank promotion in the following cases:

+ He/she has outstanding achievements in official work while working under his/her current rank and is recognized by competent authority;

+ He/she is appointed as leader or manager as he/she meets the requirement of the job position.

- Requirements for outstanding achievements in official work prescribed in Point a Clause 1 Article 7 of Decree No. 43/2023/ND-CP include emulation titles, commendations according to merits and achievements in the performance of tasks and official work of officials are as follows:

+ Regarding a promotion from the rank of inspector to principal inspector: the inspector must be awarded at least a third-class Labor Order or achieve the title of Emulation Fighter of the Ministry, Department, Central or Provincial Authority, and Central Union;

+ Regarding a promotion from the rank of principal inspector to senior inspector: the inspector must be awarded at least a first-class Labor Order or achieve the title of National Emulation Fighter.

- Agencies implementing inspectors shall, based on their job positions and inspector ranking structure approved by competent authorities, submit reports to their managerial authorities or provide presentations to competent authorities for decisions on rank promotion immediately after inspectors meet the requirements prescribed in Clause 1 Article 7 of Decree No. 43/2023/ND-CP.

See more details in Decree No. 43/2023/ND-CP of the Government of Vietnam, effective as of August 15, 2023.

4. Vietnam’s guidelines on steps to conduct auction of license plates for motor vehicles

This is a content of Decree No. 39/2023/ND-CP dated June 26, 2023 guiding Resolution No. 73/2022/QH15 on pilot auction of license plates for motor vehicles.

Specifically, steps to conduct an auction of license plates for motor vehicles are as follows:

- Auction registration:

+ Registration for a license plate auction is made entirely on the online auction website of the property auction organization;

+ Each participant is provided with an account and guidelines on how to use such account, how to bid, and other content on the online auction website to conduct the auction;

+ Each participant selects a license plate from the list of license plates put up for auction by all provinces and centrally affiliated cities of Vietnam;

+ Participants make payments of application fees and deposits of their selected license plates to the account of the property auction organization and are provided with participation codes.

+ The property auction organization shall receive registration information and deposits continuously after it lists the property auction until a date that is 3 days before the auction organization.  

- Participants access the online auction website via their provided accounts and perform auction procedures according to auction regulations.  

- The online auction website identifies the auction winner at the end of the online auction, notifies the results of the auction, displays the auction minute for the winner to confirm, and sends the information to the registered emails of participants.

- Auctioneers shall organize the online auction and digitally sign the auction minute and send it to the auction winner.

- The Ministry of Public Security of Vietnam shall assign officials to monitor and supervise the auction regarding the number of auctioneers, participants, results, and related issues.

- The Law on Property Auction shall apply to auction procedures that are not regulated in Decree No. 39/2023/ND-CP.

See more details in Decree No. 39/2023/ND-CP of the Government of Vietnam, effective as of July 1, 2023.

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