Summary of New Policies Effective from Early May 2017

1. Still Tax Transactions Not Generating Revenue

This is one of the prominent contents in Decree 20/2017/ND-CP guiding tax administration for enterprises with related-party transactions.

Effective from May 1, 2017, expenses from related-party transactions that do not match the nature of independent transactions or do not generate revenue for the production and business (P&B) activities of the taxpayer (TP) will still be counted in taxable expenses, such as:

- Expenses paid to a related party that does not engage in activity related to the TP’s P&B activities;- Expenses paid to a related party that has P&B but its asset scale, number of employees, P&B functions are not commensurate with the transaction value received from the TP;- Expenses paid to a related party that does not have rights or responsibilities related to the assets, goods, and services provided to the TP;- Expenses paid to a related party that is a resident of a country or territory that does not levy corporate income tax, does not create revenue, or add value for the TP’s P&B activities.

2. Some Requirements When Using Imaging Devices to Record Traffic Violations

Circular 06/2017/TT-BGTVT stipulates the procedures for using technical and professional equipment to sanction administrative violations (AV) in the road transport sector.

When using imaging devices such as cameras for sanctioning AVs in the road and railway transport sectors, the following requirements must be met:

- When taking photos or recording images, clips must display the date, month, year, hour, minute, second, and location where the image was taken or recorded;- If the imaging device does not have the function to determine the location, the confirmation slip of the imaging device's results must clearly state the location of the recording.- The results obtained from the imaging device must be recorded in the confirmation slip of the imaging device's results.

Circular 06/2017/TT-BGTVT takes effect on May 1, 2017.

3. Fines Up to 10 Million VND for Altering Photos to Defame Others

On March 20, 2017, the Government of Vietnam issued Decree 28/2017/ND-CP amending some regulations on administrative penalties as stipulated in Decree 131/2013/ND-CP and Decree 158/2013/ND-CP.

Fines ranging from 5 to 10 million VND will be imposed for actions of altering, splicing photos to distort the content for the following purposes:

- Distorting history, denying revolutionary achievements;- Insulting great persons, national heroes, leaders, and cultural celebrities;- Defaming, harming the reputation of agencies, organizations, and the honor and dignity of individuals.

Additionally, this fine will also be applied to the following violations:

- Selling or disseminating paintings or photos with pornographic, violent, or depraved content, spreading social evils;- Operating karaoke, bars, and other entertainment activities past permitted hours.

Decree 28/2017/ND-CP comes into effect from May 5, 2017.

4. 05 Principles for Auditing Plan Development of SAV

From May 5, 2017, the regulation on the formulation, appraisal, and issuance of annual audit plans of the State Audit Office of Vietnam will be implemented according to Decision 03/2017/QD-KTNN.

The construction of annual audit plans must ensure 05 principles as follows:

- Ensuring the independence of the State Audit Office as stated in the Constitution, the State Audit Law, and related documents;- Ensuring objectivity, transparency, gathering the collective intelligence of officials, and auditors within the unit;- Ensuring systematic, comprehensive, and feasible principles;- Ensuring centralized, democratic principles;- Ensuring good coordination with agencies within the inspection and supervision system of the Communist Party and the State.

Decision 03/2017/QD-KTNN replaces Decision 08/2008/QD-KTNN.

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