Dec 05, 2022

Legal Update. December 2022

This December Legal Update covers the following:

       1. Guidance on tax obligations when enterprises set up and use the Fund for Science and Technology Development.

       2. Orientation of Vietnam’s National Master Planning for the period of 2021 -2030.

       3. Import, export nomenclature in Vietnam from 01 December 2022.

       4. 04 new case laws have been announced.

       5. Newly proposed conditions for the operation of beauty salons.

1. Guidance on tax obligations when enterprises set up and use the Fund for Science and Technology Development

On 07 November 2022, the Ministry of Finance issued Circular 67/2022/TT-BTC (“Circular 67”) providing guidance on tax obligations when enterprises set up and use the Fund for Science and Technology Development (the “S&T Fund”), with some noteworthy new points as follows:

Firstly, although in principle the S&T Fund can only be used for scientific and technological research, in order to promptly overcome difficulties and recover the economy after the COVID-19 pandemic, Circular 67 allows enterprises to use S&T Fund to purchase machinery and equipment for technological innovation, directly serving their production and business activities for 2022 and 2023[1].

Besides, Circular 67 supplements guidance on asset management when the fixed assets used simultaneously for scientific and technological research and production and business activities. In such case, if the fixed assets purchased by the S&T Fund have not been fully depreciated, enterprises only need to continue monitoring and managing those assets according to regulations and do not have to calculate depreciation of fixed assets into deductible expenses when determining the income for CIT calculation[2].

Secondly, it is stipulated that within 05 years from the setting up of S&T Fund, if the enterprise does not use or uses less than 70% of the annual fund, the enterprise must pay to the State the part of CIT calculated on the appropriated income which is unused or not used up 70% and must pay interest accrued from that CIT amount. In which, the interest rate for calculating interest on the recovered CIT amount in respect of the unused portion of the Fund is the one-year term treasury bond[3].

Thirdly, Circular 67 also provides clearer guidance on the CIT determination when an enterprise sets up S&T Fund during its tax incentive period and receives the S&T Fund transfer from another enterprise (transferring enterprise). Accordingly, if the enterprise uses it for improper purposes or fails to use or does not used up 70% of the S&T Fund transferred, the recovered CIT amount will be determined as follows[4]:

- For the appropriated amount for setting up the S&T Fund at the enterprise, the recovered CIT amount is determined based on the CIT incentives at the setting up time.

- For the amount received by the transfer, the recovered CIT amount is determined at the time of receiving the fund transfer, specifically:

  • In case the transferring enterprise is not entitled to CIT incentives, the recovered CIT amount will be determined at the non-incentive CIT rate.
  • In case the transferring enterprise is enjoying CIT incentives, the recovered CIT amount is determined according to the incentive CIT rate of the transferring enterprise at the transfer time of transfer.

The transferred amount determined as used for improper purposes, unused or not using up 70% is allocated according to the ratio between the transferred amount and the S&T Fund in the tax period (including the amount of the appropriated S&T Fund and the transferred amount).

Circular 67 takes effect from 23 December 2022 and applies to the CIT period of 2022.

2. Orientation of Vietnam’s National Master Planning for the period of 2021 -2030

The Central Executive Committee of Communist Party of Vietnam promulgated Conclusion No. 45-KL/TW dated 17 November 2022 on Orientation of the National Master Planning for the period of 2021-2030, with a vision towards 2050.

Below are some of the important principles and viewpoints:

  • The national development space is organized nationwide in a scientific and uniform manner that ensures intra-regional and inter-regional linkages on the basis of 6 socio-economic regions and uses the advantages of each area in the region and the whole region;
  • Mobilize, allocate and effectively use resources, improve Vietnam’s competitiveness.
  • Develop with focus on areas with advantages in terms of geography, socio-economic infrastructure, human resources and other advantages for the development to stimulate growth in the region.
  • The national master planning must ensure the feasibility and connectivity for the next stages in line with the economy's ability to balance resources.

3. Import, export nomenclature in Vietnam from 01 December 2022

On 08 June 2022, the Ministry of Finance issued Circular 31/2022/TT-BTC promulgating the Vietnamese import, export nomenclature which takes effect from 01 December 2022.

The Vietnamese import, export nomenclature shall be used to:

  • Formulate import and export tariffs; 
  • Compile lists of goods to serve the state management;
  • Make state statistics on imports and exports;
  • Serve the state management of goods import and export and other fields. 

This Circular is issued together with 02 appendices, one is Vietnamese import, export nomenclature and another is for 06 general rules explaining the classification of goods based on the International Convention on Harmonized Commodity Description and Coding System of the World Customs Organization.

4. 04 more case laws have been announced

On 14 October 2022, the Supreme People's Court issued Decision No. 323/QD-CA announcing four more case laws that have been approved by the Council of Judges of the Supreme People's Court and shall be applied as from 15 November 2022, including:

  • Case Law No. 53/2022/AL on annulment of illegal marriage;
  • Case Law No. 54/2022/AL on determining custody rights of children under 03 years old in cases where the mother does not directly care for, nurture and educate the child;
  • Case Law No. 55/2022/AL on recognition of the validity of a contract that violates the formality conditions;
  • Case Law No. 56/2022/AL on the settlement of disputes over grave relocation. 

Up to now, there are currently a total of 56 case laws in Vietnam.

5. Newly proposed conditions for operation of beauty salons

The Ministry of Health proposes general conditions for granting operating licenses to medical examination and treatment establishments.

According to the draft, a beauty salon is not required to have an operating license but must send a written notice of satisfaction of conditions for providing beauty salon services to the Department of Health where it is headquartered before operating.

Beauty salon services that use drugs, substances and devices to interfere with the human body to change skin color, shape, weight, defects of body parts (skin, nose, eyes, lips, face, chest, abdomen, buttocks and other body parts), tattooing, spraying, or embroidering on the skin using injectable anesthetics may only be performed at a hospital with a cosmetology specialist or a cosmetology clinic or a medical examination and treatment facility within the scope of expertise in cosmetology approved by the competent authority.

[1]            Point c, Clause 1 of Article 5 of Circular 67.

[2]            Article 5.4 of Circular 67.

[3]            Article 4.2 of Circular 67.

[4]            Point b, Clause 4 of Article 4 of Circular 67.


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