Lawyer in Vietnam Oliver Massmann Legal Update November 2016

Legal update highlights for November including Official Letter No. 4807/TCT-KK of the

General Department of Taxation dated 17 October 2016 on Cost Deduction for Payment Made

by Credit Cards of Enterprises; Decree No. 145/2016/ND-CP of the Government dated 01

November 2016 on Amendments to Decree No. 108/2013/ND-CP dated 23 September 2013 on

Administrative Penalties for Violations against Regulations on Securities and Securities

Market; Decree No. 153/2016/ND-CP of the Government dated 14 November 2016 on region-

based minimum wage levels applied to employees who work under labor contracts; Circular

No. 31/2016/TT-BLDTBXH of the Ministry of Labor, Invalids and Social Affairs dated 25

October 2016 on Guidelines for Determination of Salary in a Wholly State Owned Limited

Liability Company under Securities Law.

1. Official Letter No. 4807/TCT-KK of the General Department of Taxation

dated 17 October 2016 on Cost Deduction for Payment Made by Credit Cards of

Enterprises

According to this Official Letter, if an enterprises enters into contracts with commercial

banks in Vietnam to issue credit cards for persons holding management positions in order

to pay timely for the enterprise’s expenditures, after that, such enterprise repays for their

staffs from its bank accounts which were registered with tax agencies and if these

payments are regulated under the financial management policies of the company, such

transactions are considered satisfying non-cash payment requirements and considered a

basis for input VAT declaration and deduction and such expenses are deductible expenses

for CIT calculation.

2. Decree No. 145/2016/ND-CP of the Government dated 01 November 2016 on

Amendments to Decree No. 108/2013/ND-CP dated 23 September 2013 on

Administrative Penalties for Violations against Regulations on Securities and

Securities Market

This Decree supplements some violations in securities/securities market and the penalties

applied for such violations, e.g,: violations against regulations on prevention of money

laundering in securities and securities market. Such violations shall be subject to a fine

of up to VND 250 million. Another new provision in this Decree is on registration

failure: failure to duly register securities transactions or securities listings shall be subject

to fines from VND 10 million to VND 400 million. This Decree shall come into effect

from 15 December 2016.

3. Decree No. 153/2016/ND-CP of the Government dated 14 November 2016 on

region-based minimum wage levels applied to employees who work under labor

contracts

From 01 January 2017, the region-based minimum wage levels shall be adjusted as

below:

(i) Region I: VND 3,750,000/month, i.e. increasing VND 250,000/month in

comparison with 2016, equivalent to 7.1%;

(ii) Region II: VND 3,320,000/month, i.e. increasing VND 220,000/month in

comparison with 2016, equivalent to 7.1%;

(iii) Region III: VND 2,900,000/month, i.e. increasing VND 200,000/month in

comparison with 2016, equivalent to 7.4%; and

(iv) Region IV: VND 2,580,000/ month, i.e. increasing VND 180,000/month in

comparison with 2016, equivalent to 7.5%.

4. Circular No. 31/2016/TT-BLDTBXH of the Ministry of Labor, Invalids and

Social Affairs dated 25 October 2016 on Guidelines for Determination of Salary in a

Wholly State Owned Limited Liability Company under Securities Law.

This Circular provide guidelines for the management of salary in organizations operated

as wholly state-owned single-member limited liability companies which are operated

under the Law of Securities. Upon the determination of the planned average pay rate

based on the average labor productivity and profit according to Article 9 of the Circular

No. 26/2016/TT-BLDTBXH, the average labor productivity shall be calculated according

to the total revenue in the following manner:

(i) Planned average labor productivity = Total revenue planned divided by

Planned average number of workers;

(ii) Average labor productivity attained in the year = Total revenue attained in

the year divided by Average number of workers employed in the year.

This Circular shall come into effect from 10 December 2016.

Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you

have any questions or want to know more details on the above. Oliver Massmann is the General

Director of Duane Morris Vietnam LLC.

THANK YOU !