Update on new regulations and important tax policies in February

In the first newsletter of 2021, Grant Thornton Vietnam would like to update our valued customers on important legal policies that have just been issued recently.

1. Resolution No. 01/NQ-CP on major tasks and solutions to carry out the socio-economic development plan and estimated State budget in 2021

On 1 January 2021, the Government issued Resolution No. 01/NQ-CP on major tasks and solutions to carry out the socio-economic development plan and estimated State budget in 2021. Some highlight contents of Resolution 01, as stated by the Government, are the enhancement of financial discipline to prevent budget deficit and tax evasion; reducing the rate of tax debts; with special attention on the prevention of transfer pricing issue.

Although 2020 has been a relatively successful year, however in complicated situation of the pandemic around the world, the Government will continue to drastically implement policies to improve the legal document system, minimize administrative procedures and strengthen measures to ensure a stable budget revenue. The enterprises community should be aware of these upcoming important changes in policy and law enforcement in order to improve compliance and minimize financial, accounting, and especially tax risks on their business.

2. Decree No. 145/2020/ND-CP on the implementation of some articles in the Labor Code

On 14 December 2020, the Government issued Decree No. 145/2020/NĐ-CP on the implementation of some articles in the Labor Code related to working conditions and labor relations. Notable points include regulations on the submission of labor change reports to the Department of Labor, War Invalids and Social Affairs; determination of working time for salary entitlement and added regulations for cases in which overtime work could be organized up to 300 hours per year such as: “Production and business operation at enterprises where normal working hours do not exceed 44 hours per week.”

Decree No. 145/2020/NĐ-CP takes effect from 1 February 2021.

3. Circular No. 105/2020/TT-BTC on tax registration

On 3 December 2020, the Ministry of Finance issued Circular No. 105/2020/TT-BTC on tax registration, detailing the subjects of direct tax registration, tax code structure as well as tax registration dossiers, procedures and forms. Some of the main contents in this Circular are on tax code termination dossiers; initial tax registration dossiers for dependents through company; or regulations on taxpayers who are subject to tax registration directly with tax authorities.

This Circular takes effect from 17 January 2021 and replaces Circular No. 95/2016 / TT-BTC dated 28 June 2016 on tax registration issued by the Ministry of Finance.

4. Official Letters summarizing notable points of some new and important Decrees issued at the end of 2020

- On 7 December 2020, the General Department of Customs issued Official Letter No. 7692/TCHQ-TXNK on the implementation of Tax Administration Law in 2019 and Decree No 126/2020/ND-CP. This Official Letter clarifies the legal base and reason behind the changes in Tax Administration Law 2019 compared to previous regulations; as well as detailing the corresponding content in Decree 126 guiding Tax Administration Law 2019.

- On 5 November 2020, the Government issued Decree No. 132/2020/ND-CP on tax administration for enterprises engaging in related party transactions (replacing Decree No. 20/2017/ND-CP dated 24 February 2017 and Decree No. 68/2020/ND-CP providing amendments to Clause 3 Article 8 of Decree No. 20/2017/ND-CP), taking effect from 20 December 2020 and applying from Corporate Income Tax year of 2020.

In Official Letter 271/TCT-TTKT to provincial and municipal Tax Departments, the General Department of Taxation summarized and introduced new points in Decree No. 132/2020/ND-CP, providing Tax Departments with basis for future implementation.

Regarding this point, Grant Thornton also had a Newsletter in 2020 summarizing the critical points of Decree 132. We recommend the enterprises to refer to this Newsletter before implementation of new regulations in order to minimize tax risks.

- On 16 November 2020, the General Department of Taxation issued Official Letter No. 4868/TCT-CS guiding some critical points of Decree 123/2020/ND-CP on invoices and documents. Decree 123 issued in the context of there are different regulations regarding invoices are effective at the same time without the consistence, especially the regulations on electronic invoices as well as the deadline to compulsory application of electronic invoices.