New regulatory policies into effect in early March 2016

1. Validity period of representative office establishment permit

On March 10, 2016, the Decree No. 07/2016/ND-CP , setting out specific provisions of the Law on Commerce in respect of representative offices or branches of foreign traders located within the territory of Vietnam, is going into effect.  

Subject to this Decree, the validity period of representative office or branch establishment permit is provided for as follows:

- The permit for representative offices or branches of foreign traders will have the validity period of 05 years and this validity period will not exceed the remaining validity period of the business registration certificate or any other papers of a similar value of foreign traders to the extent that such papers are subject to any regulation on the validity period.   

- The validity period of a re-issued permit for establishment of representative offices or branches is equal to that of the previously-issued one.

The Decree No. 07/2016/ND-CP will supersede the Decree No. 72/2006/ND-CP and repeal Article 2 of the Decree No. 120/2011/ND-CP .

Any representative office to be licensed before March 10, 2016 will be allowed to continue its operation till the validity period of its issued permit for representative office establishment expires.

2. Modification of preferential duty rates

The Circular No. 16/2016/TT-BTC provides for modification of preferential rates of customs duty imposed on several goods that belong to the headings 27.07, 29.02, 39.02 in the preferential import tariff schedule that takes effect from March 6, 2016 as follows:

- Modifying preferential rates of customs duty imposed on several goods that belong to the headings 27.07, 29.02, 39.02 in the preferential import tariff schedule.

- Modifying and supplementing Chapter 98 in respect of codes and preferential rates of customs duty particularly applied to several items that belong to headings or sub-headings in Section II, Annex II of the preferential import tariff schedule issued together with the Circular No. 182/2015/TT-BTC 

To see more details, please read the Circular No. 16/2016/TT-BTC .

3. New regulations on trade in herbal materials

The Circular No. 03/2016/TT-BYT providing for trading of herbal materials will enter into force on March 6, 2016.

Subject to this Circular, application for the license for import of herbal ingredients includes the following documents:

- Bill of entry (in case of an import entrustment, name of the entrusted importer must be given in the bill of entry).

- Declaration of standards for quality and method for testing of herbal materials of the manufacturer or copy of the quality standard treatise of pharmacopoeia.

- With respect to herbal materials containing active ingredients that have addictive or psychotropic effects, or medicinal precursors, an inventory report must be attached.

Forms of documents (such as bill of entry, inventory report, etc.) are issued in Annexes to this Circular.

This Circular repeals regulations on export and import of herbal materials in the Circular No. 47/2010/TT-BYT and 38/2013/TT-BYT .

4. Level of collection for protection and development of rice cultivation land

On March 7, 2016, the Circular No. 18/2016/TT-BTC , providing guidance on several articles of the Decree No. 35/2015/ND-CP on management and utilization of rice cultivation land, will come into effect.  

Subject to this Circular, any institution, organization, family household or individual entitled to rice cultivation lands assigned or rented by the State for non-agricultural purposes must pay fee for protection and development of rice cultivation land.   

The sum of collection for protection and development of rice cultivation land = Specified rate (x) Land acreage (x) Price of rice cultivation land

Where:

- Specified rate (%) refers to an amount of collection for protection and development of rice cultivation land defined by the provincial People’s Committee which is relevant to locality-specific conditions but is not less than 50%.

- Land acreage refers to a parcel of rice cultivation land converted into non-agricultural land which is specified in the decision granted by the competent authority to permit conversion of rice cultivation land to non-agricultural land.

- Price of rice cultivation land is calculated according to the land price schedule prevailing on the date of such conversion which is issued by the provincial People’s Committee.

5. Regulations on provision of disaster-recovery financial assistance

The Decision No. 01/2016/QD-TTg on policies and processes for provision of disaster-recovery financial assistance for local jurisdictions enters into force on March 5, 2016.

Subject to this Decision, rules and policies for provision of welfare assistance and infrastructure recovery are provided for as follows:

- Any financial assistance derived from the central budget will be considered only if local jurisdictions suffer from losses in excess of their budget-balancing capabilities.

- Disaster-recovery financial assistance is categorized into the followings:

+ The central budget supports local jurisdictions that have yet to autonomously balance their assigned budget.

+ The central budget supports local jurisdictions that have less than 50% of their budget revenues distributed to the central budget.

+ With regard to other local jurisdictions, expenditure on the disaster-recovery financial assistance is financed by the local budget itself.

+ In some special cases, the Prime Minister will make his final decision.

6. Regulations on financial settlement on projects financed by state-own funds

On March 5, 2016, the Circular No. 09/2016/TT-BTC , providing for financial settlement on projects financed by state-own funds, will enter into forces.

Investment expenses qualified to be included in the financial settlement are specified by this Circular as follows:

- Investment expenses included in the financial settlement are all of legitimate expenses incurred during the construction process to serve the purpose of bringing projects into operation.

- Legitimate expenses are all of expenses incurred within a project, design or approved budget estimate; the contract which has been effected, even including any approved adjustment or supplement in accordance with regulations and within jurisdiction. 

- Investment expenses qualified to be included in the financial settlement must fall within the range of approved investment outlays, or may be subject to any amendment in accordance with laws and regulations.

The Circular No. 19/2011/TT-BTC and 04/2014/TT-BTC will be superseded by this Circular.