New Points in 13 Decrees Effective from January 01, 2018 (Part 2)

1. Lottery companies are not taxed on 09 specific expenses

This is a notable content in Decree 122/2017/ND-CP on the specific financial management mechanism and assessment of operating efficiency of lottery businesses (enterprises); Stock Exchange and Vietnam Securities Depository Center.

Lottery businesses are allowed to deduct the following specific expenses when calculating corporate income tax:

- Prize payout expenses;- Agent commission expenses for lottery agents;- Expenses for authorizing prize payouts to winning customers;- Expenses for lottery drawing and supervision by the lottery supervisory board;- Support expenses for anti-illegal lottery activities and fake lottery tickets;- Provision expenses for prize payout risk reserve fund;- Expenses for lottery tickets;- Expenses for lottery ticket information, drawing, and prize results;- Contribution expenses for activities of the regional lottery supervisory board

See details in Decree 122/2017/ND-CP effective from January 1, 2018.

1. Annual adjustments to the list of remote border posts

the Government of Vietnam issued Decree 114/2017/ND-CP defining border posts in remote areas, which is effective from January 1, 2018.

Depending on the annual socio-economic development of the provinces and cities with borders; the requirements for crime prevention by the Border Guard, the list of remote border posts may be supplemented or reduced.

According to the regulations, remote border posts are determined based on one of the following criteria:

- Positioned and managing mountainous communes, island communes, and coastal areas with complicated, dangerous, and isolated natural terrain, making transportation difficult, far from district-level administrative centers;- Positioned and managing mountainous communes, islands with regional allowances ≥ 0.2 and special allowances ≥ 30% as stipulated by the competent state agency;- Positioned and managing communes and wards in key areas of political security, social order, and safety.

1. Public disclosure of State financial statements from 2018

According to Decree 25/2017/ND-CP, from January 1, 2018, State financial statements (SFS) will be publicly disclosed in one or several forms such as publishing documents, posting, and online portal. The public disclosure content includes:

- For provincial SFS:

+ State asset status;

+ Local governmental debt, other payable amounts of the State;

+ State capital sources;

+ State financial income, expenses, and financial results;

+ State cash flow on a provincial scale (excluding detailed data in national defense, security, and national reserves).

- For national SFS:

+ State asset status;

+ Public debt and other payable amounts of the State;

+ State capital sources;

+ State financial income, expenses, and financial results;

+ State cash flow on a national scale (excluding detailed data in national defense, security, and national reserves).

1. Note on the foreign currency transfer limit for overseas oil and gas investment

Decree 124/2017/ND-CP (effective from January 1, 2018) allows investors to transfer foreign currency from their foreign currency accounts abroad for investment in oil and gas activities. Notes:

- Foreign currency transfer limit ≤ 500,000 USD.- For investment transactions valued > 500,000 USD by enterprises wholly owned by the state or their subsidiaries, the transaction must be approved by the State Bank of Vietnam after the opinion of the representative agency of the owner;- For transactions ≤ 500,000 USD by enterprises wholly owned by the state or subsidiaries wholly owned by state enterprises:

- The direct owner’s representative must have a written commitment to the owner's representative agency about transferring foreign currency abroad for the right purpose;- Be responsible before the law for their commitment;

- Investors not belonging to the above cases conducting transactions > 500,000 USD must be approved by the State Bank of Vietnam.

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