Worries over housing tax

Suggestions let fly by the Ministry of Finance to collect the housing tax have stirred up objections from many experts who challenge the foundation for such a plan. They argue that the reasons behind the ministry’s intention are not convincible.

As covered in local media, the Taxation Policy Department under the ministry has been assigned to flesh out the plan to collect the housing tax, especially those people with two or more houses. Those people with only one house will likely be exempted from this tax, but the tax rate will increase progressively from the second home. Deputy Minister of Finance Huynh Quang Hai says in Tuoi Tre that “the housing tax will surely be collected, not only to increase revenues for the State budget but also because the housing tax has been collected in many countries for long.”

Such an approach immediately draws fire.

In many countries worldwide, as reasoned by experts, the housing tax is often meant by the State to regulate the market so as to curb excessive speculation, thus ensuring healthy development of the property sector, beside the goal of generating more income for the State budget.

In Vietnam, they say, the Ministry of Finance needs to spell out its key goal - whether it is to earn more revenue or to intervene in the market - and needs to take a prudent approach in both cases.

If the primary goal is to create a new source of income for the State budget, a rethink is needed, since the burden of taxes and fees in the country is deemed to be already rather heavy for businesses and the people. Creating a new tax will make life harder for many people.

Meanwhile, if the goal is to introduce State intervention to ensure justice among all market players, the goal can hardly be realized if the tax is simply based on the number of houses one owns, and speculators will still have ways to ensure their profit margin by factoring the tax sum into their prices. That is to say the rich can still defend their wealth, while poorer people will suffer if housing prices climb due to the new tax.

In addition, a certain homeowner can have two or three houses, but the total value of their properties is far lower than one with only a big house in a prime location. In major cities, a big house in a good commercial quarter may cost hundreds of billions of dong, while a house on the outskirts is priced at hundreds of millions or less, and if the tax is imposed on multiple-home owners, then justice cannot be ensured. That is not to mention the vast difference between a home in a major city and another in the countryside.

As such, the housing tax – if it is to come into life – must be conceived in another way, and should be based on the value of properties as the core rather than merely the number of properties, besides a set of criteria scientifically mapped out to ensure that State intervention in the market will work to make life easier for the general public. It should stabilize the market rather than stirring up public worries.

Source Saigon Times Daily

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Visa and Immigration Matters in Vietnam

Foreigners  entering  Vietnam  for  different  purposes  will  need proper  visas  issued,  failing  which  would lead  to  the  revocation,  invalidation  of  entry/exit/residence  permits issued  by  Vietnamese  competent authorities.  The  length  of stay  in  Vietnam for foreigners  depend  on the  visa type and the time  duration specified  on  the  visa  itself.    For  some  visas,  especially  work  related  visas,  the  foreigners  need  to  be sponsored by Vietnam enterprises  for working purpose.  The proper works  visa must be obtained before work permit in Vietnam would be issued and the foreigners could apply for temporary residence card to stay in Vietnam for a longer period.

Below lists down all visa symbol for references.

1. NG1 –  Issued  to  members  of  delegations  invited  by  the  Secretary  General  of  Vietnam’s  Communist Party of, the President of Vietnam, the President of the National Assembly, the Prime Minister.
2. NG2 –  issued  to  members  of  delegations  invited  by  standing  members  of  the  Secretariat  of  the Vietnam’s Communist Party, Deputy President of Vietnam, Deputy President of the National Assembly, Deputy  Prime  Minister,  President  of  Vietnamese  Fatherland  Front,  Executive  Judge  of  The  Supreme Court, Chief Procurator of the Supreme Procuracy, State Auditor General; members of delegations at the same  levels  of  Ministers,  Secretary  Generals  of  Provincial Communist  Authorities,  President  of  the People’s Committees of provinces.
3. NG3 –   Issued   to   members   of   diplomatic   missions,   consular   offices,   representative   offices   of international organizations affiliated to the UN, representative offices of intergovernmental organizations and their spouses, children under 18 years of age, and housemaids during their term of office.
4. NG4- Issued  to  people  who  come  to  work  with  diplomatic missions,  consular  offices,  representative offices  of  international  organizations  affiliated  to  the  UN,  representative  offices  of  intergovernmental organizations,  visitors  of  members  of  diplomatic  missions,  consular  offices,  representative  offices  of international   organizations   affiliated   to   the   UN,   and   representative   offices   of   intergovernmental organizations.
5. LV1 –  Issued  to  people  who  come  to  work  with  units  affiliated  to  Vietnam’s  Communist  Party;  the National  Assembly,  the  government,  Central  Committee  of  Vietnamese  Fatherland  Front,  the  People’s Supreme  Court,  the  People’s  Supreme  Procuracy,  State  Audit  Agency,  Ministries,  ministerial  agencies, Governmental agencies, the People’s Councils, the People’s Committees of provinces.
6. LV2 –  Issued  to  people  who  come  to  work  with  socio-political  organizations,  social  organizations, Vietnam Chamber of Commerce and Industry.
7. ĐT – Issued to foreign investors in Vietnam and foreign lawyers practicing in Vietnam.
8. DN – Issued to people who come to work with companies in Vietnam.
9. NN1 –  Issued  to  Managers  of  representative  offices  or  projects  of  international  organizations  and foreign non-governmental organizations in Vietnam.
10. NN2 – Issued to heads of representative offices, branches of foreign traders, representative offices  of other foreign economic, cultural, professional organizations in Vietnam.
11. NN3 –   Issued   to   people   who   come   to   work   with   foreign   non-governmental   organizations, representative  offices,  branches  of  foreign  traders,  representative  offices  of  other  foreign  economic, cultural, professional organizations in Vietnam.
12. DH – Issued to people who come to study or serve internship.
13. HN – Issued to people who come to attend conventions or conferences.
14. PV1 – Issued to journalists who have permanent residences in Vietnam.
15. PV2 – Issued to journalists who come to work for a short period of time in Vietnam.
16. LĐ – Issued to people who come to work.
17. DL – Issued to tourists.
18. TT –  Issued  to  foreigners  that  are  parents,  spouse,  children under  18  years  of  age  of  the  foreigners issued  with  LV1,  LV2, ĐT,  NN1,  NN2,  UNIVERSITY,  PV1,  LĐ  visas,  or  foreigners  that  are  parents, spouse, children of Vietnamese citizens.
19. VR – Issued to people who come to visit their relatives or for have other purposes.
20. SQ – Issued to people at an overseas visa-issuing authority of Vietnam

It is  important that the immigration lawyers  in Vietnam to be retained for advice in regard to visa, work permit, temporary residence card or other immigration matters.

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Workshop discusses renewable energy development

HCMC – Experiences from developed countries have shown that renewable energy cannot be developed without a competitive electricity market in place, heard a workshop in Hanoi on Monday. Experts attended a workshop to make policy recommendations for boosting the development of renewable energy in a competitive power market, the Vietnam News Agency reports. Building a competitive power market is an important element of institutional reform, Nguyen Dinh Cung, head of the Central Institute for Economic Management (CIEM), told the event held by CIEM. Pham Duc Trung, deputy head of CIEM’s Committee for Enterprise Reform and Development, said producers of renewable energy should be entitled to preferential treatment in terms of tax, land use fee and access to credit. The domestic power market has not been made competitive while there are no independent agencies monitoring and regulating the market, making it unattractive to investors, he said. To spur competitiveness, Trung stressed the need to reform State utility Vietnam Electricity Group (EVN) and guarantee a level playing field for electricity producers and distributors. He suggested making the Electricity Regulatory Authority of Vietnam more independent, strengthening the capacity of the Vietnam Competition Authority at the Ministry of Industry and Trade, and applying a competitive pricing mechanism. Nguyen Van Vy, vice chairman of the Vietnam Energy Association (VEA), said the Government should adopt incentive investment policy for projects generating and using renewable energy, and give financial assistance to renewable energy research projects.

Source:The Saigon Times Daily

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Contract Dispute in Vietnam

Disputes in contract performance and solutions

Disputes occur during contract performance are beyond the control of the entity entering contractual relations. In developed countries, lawyers always invited to advise customers to identify potential disputes, and provide solutions, support and provide legal advice and to accompany the enterprises solve disputes in accordance with the provisions of the law, which help businesses to focus on its business activities. Foreign companies when entering Vietnam mostly follow suit to engage dispute or litigation lawyers in Vietnam at early stage of the transactions.

Contract Dispute

Contractual disputes in Vietnam shall be construed as conflicts, disagreements, conflicts between the parties regarding the implementation or non-implementation of rights and obligations in the contract.Disputes could arise in failure to collect the payment from debtor in sales agreement, construction contract disputes between investor and contractor, labour dispute between employer and employee, insurance disputes between ship owner and insurance company.

Contract disputes must satisfy the following factors:

First, there is a contract between the parties. The contract would be in different for ms therefore, there is a need to clearly define if the contractual relationship has been formed or not.

Second, there is a breach of obligations or duties that are in violation of a party in the contractual relationship.

Third, there is disagreement between the parties about the handling of infringement or the consequences of such violations.

It should be noted, the contract disputes arise from the breach. However, not all breaches of contract also lead to disputes.

How to settle the contract disputes in Vietnam

Contractual disputes can be resolved by the following methods:

• Negotiation is the process or behavior in which the two sides conduct exchanges, agreement on common interests and characteristics of disagreement and come to a unified agreement. The negotiation is without the presence of third parties. However, if the lawyers in Vietnam would be involved during the negotiation process, at the role of representing or advising, counseling, then the negotiations tend to be more effective and parties would reach agreement.
• Mediation is one of the options for disputing parties to end the conflict. Mediation is different from negotiating with the intervention of a third party. Mediator will help parties to achieve agreement and resolve conflict.
• Court or arbitration: The settlement of the dispute in court would take time. The court’s ruling can be appealed. It should be noted that, per Vietnam laws, only Vietnam litigation or dispute law firms could represent the client at court. Commercial arbitration is available only in commercial-business sector. The advantage of this method is fast and efficient. However, compare with disputing at court, this method of handling dispute would take higher costs.

Disputes and dispute resolution matters are natural and inevitablein any countries including Vietnam. It is important that parties involved need to identify, anticipate disputes can occur. When there is a dispute, the dispute lawyers will be able to help parties to with advice to reasonable solution to address the disputes effectively.

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Social insurance debt put at VND14 trillion

HCMC – Unpaid social insurance premiums had amounted to VND14.2 trillion by end-October, up from VND13.1 trillion a month earlier, according to Vietnam Social Insurance (VSI).  

VSI deputy general director Tran Dinh Lieu told a conference on how to collect social insurance debt in Hanoi on Wednesday that if social insurance debt owed by insolvent businesses was included, the sum would be bigger. Many companies did not pay social insurance though they already collected premiums from their workers.

Of VND14.2 trillion, VND9.55 trillion was owed to the social insurance fund, with VND6.87 trillion of it owed for at least three months, while unpaid unemployment insurance stood at VND516 billion and unpaid medical insurance at VND4.17 trillion.

VSI attributed the huge social insurance debt to economic difficulties and poor compliance with social insurance regulations by enterprises and insurance agencies at all levels. Debt collections by provincial agencies are below targets and some agencies do not report debt to local governments to find coping solutions.   

Nguyen Tri Dai, head of the collection department at VIS, told the conference that the social insurance agencies in provinces rarely coordinate with the departments of finance to urge insurance payments by provincial budgets for certain groups of privileged people. Notably, such debt in An Giang Province amounted to VND66 billion in January-September.

According to the 2014 Social Insurance Law, the Vietnam General Confederation of Labor is tasked with taking legal action against those enterprises owing insurance premiums and hoarding money of employees.

Lieu said suing businesses owing social insurance premiums is a measure to reduce debt. The confederation of labor in Danang City sued a company but the result has yet to come out.  

Provincial confederations of labor said they had encountered a slew of difficulties when suing businesses which are on the brink of bankruptcy. Even if they win the lawsuit, law enforcement could be hard.

Mai Duc Chinh, vice chairman of the Vietnam General Confederation of Labor, told provincial confederations of labor to take to court businesses that owe social insurance premiums.  

Source: SaigonTimes

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HCMC proposes setting up property market info center

HCMC – HCMC has proposed establishing a center to store and manage data about land, homes and housing projects, heard a meeting last week.

This is one of a number of measures suggested in the city’s property market development plan in 2016-2020 with a vision towards 2030, which was the topic of discussion at the meeting.

The city expects the information center could help it build official real estate market indexes which market participants could use as references.

The plan will develop infrastructure to connect urban areas, diversify property products, boost development of condo buildings, and encourage investors to get involved in projects to build homes for low-income people.  

The city petitions the Government to establish a general department for housing development and allow it to form a housing development board under the city government.  

The plans also mentions a number of measures to ensure transparency on the market, improve the cityscape and oversee housing development.  

Tran Du Lich, former deputy head of the HCMC delegation of NA deputies, said the plan is well prepared but contains no deep analysis of market conditions. It should point out what is not transparent, and what regulations overlap, he said.

Lich said laws such as the Land Law, the Construction Law, the Housing Law and the Law on Real Estate Business have conflicting provisions which have left negative effect on the real estate market.

Le Chi Hieu, vice chairman of the HCMC Real Estate Association (HoREA), shared Lich’s view, saying many existing regulations are inconsistent, making life difficult for property companies.

High land prices and land-use fees are weighing on businesses and homebuyers, he noted, adding the State should set up a special financing mechanism, such as a housing development fund, to lure more businesses to join low-cost housing projects.

An official of the State Bank of Vietnam’s HCMC branch said the plan does not make clear the financing structure of enterprises involved in property projects. At present, a majority of investors rely heavily on bank loans to fund their projects but this source of capital would drop in the future in line with the central bank’s Circular 06 which sets out a roadmap for tightening lending to real estate projects.

To ensure sustainable development for the property market, bank loans should fall while increasing capital from other sources such as homebuyers, investment funds and corporate bonds, the central bank official said.

Source SaigonTimes

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Vietnam National Power Development Plan til 2020

Vietnam Prime Minister on Mar 18th, 2016 has issued decision 428 QD-TTG which approved the national power development plan til 2020 with visions extended til 2030.  This is expected to boost the competitive environment in a way to attract investment in thermal, water, wind and other sustainable power from various sources in Vietnam.

We hereby introduces the decision for your reference.

See more:

http://www.antlawyers.vn/library/decision-no-428qd-ttg-on-the-national-power-development-plan-of-vietnam.html

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