New Points in 13 Decrees Effective from January 1, 2018 (Part 1)

1. Equitization of State-Owned Enterprises: Applying the book-building method for initial share sale

This is a new point added at Decree 126/2017/ND-CP on the transformation of state-owned enterprises (SOEs) and single-member limited liability companies invested 100% by SOEs into joint-stock companies.

Decree 126 stipulates 04 methods to implement when selling shares for the first time:

- Public auction;- Underwriting;- Direct agreement;- Book-building method.

The book-building method is understood as:

- The process of creating, receiving, and recording stock demand from investors, and the issuing organization will publicize the sale through underwriting;- The underwriting organization cooperates with the issuing organization to determine the expected price range based on market demand by creating an order book reflecting investor demand to determine the final price.

Decree 126/2017/ND-CP takes effect from January 1, 2018, and replaces Decree 59/2011/ND-CP, Decree 189/2013/ND-CP, and Decree 116/2015/ND-CP.

1. New points on import tax for used cars

The Government of Vietnam issued Decree 125/2017/ND-CP amending and supplementing a number of articles of Decree 122/2016/ND-CP on the Export Tariff, Preferential Import Tariff, List of Goods and Absolute Tax Rates, Mixed Tax Rates, Out-of-Quota Import Tariffs.

Accordingly:

- Cars for transporting up to 09 people (including the driver) with an engine capacity not exceeding 1,000cc classified under goods group 87.03 are subject to absolute tax rates in Appendix III of Decree 122.

Currently, the absolute tax rate applies to cars for transporting up to 09 people with an engine capacity less than 1,500cc classified under goods group 87.03, and cars transporting from 10 - 15 people classified under goods group 87.02.- Cars for transporting up to 09 people (including the driver) with an engine capacity over 1,000cc classified under goods group 87.03, and cars transporting from 10 - 15 people classified under goods group 87.02 are subject to mixed tax rates in Appendix III.

Currently, mixed tax rates only apply to cars for transporting up to 09 people (including the driver) with an engine capacity from 1,500 cc classified under goods group 87.03.

See more Decree 125/2017/ND-CP, effective from January 1, 2018.

1. Dossier requesting deduction for compensation, site clearance costs

This content is supplemented in Decree 123/2017/ND-CP amending Decree 45/2014/ND-CP on land levy collection.

Entities allocated land by the State without auctioning land use rights and voluntarily advancing compensation, site clearance costs can deduct the advance amount from the payable land levy based on the approved plan. Note:

- The deduction does not exceed the payable land levy;- For the remaining compensation, site clearance costs not yet deducted from the payable land levy (if any), they will be counted as investment capital for the project.

The dossier requesting deduction for compensation, site clearance costs includes:

- 01 copy of the compensation, site clearance plan approved by a competent state agency;- 01 original payment voucher and a detailed payment list for compensation, site clearance costs.

In addition, Decree 123/2017/ND-CP also amends and supplements Decree 46/2014/ND-CP on land rent, water surface rent collection.

See detailed Decree 123/2017/ND-CP effective from January 1, 2018.

1. Amounts payable for securing enforcement by commercial legal entities

Decree 115/2017/ND-CP effective from January 1, 2018, stipulates the detailed procedures, and amounts that commercial legal entities must pay to secure the enforcement of judgments (EoJ); temporary retention, refund, and payment to the state budget of the amounts paid.

The amount payable to secure EoJ fines is decided by the competent procedural agency in each specific case but must ensure:

- Not less than 50%; and- Not higher than the highest fine specified in the applicable provision for prosecution, investigation, indictment, trial of the commercial legal entity.

Payment to secure EoJ can be made by bank transfer or cash deposit to the temporary retention account of the investigation agency or civil judgment enforcement agency opened at the State Treasury or the financial agency in the military.

...To be continued

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