1. New Law on Telecom

The National Assembly adopted the Law No. 24/2023/QH15 on Telecom (the “LOT 2023”) dated 24 November 2023. The LOT 2023 takes effect from 01 July 2024, except certain articles which will be effective from 01 January 2025. The LOT 2023 replaces the Law on Telecom 2009.

The LOT 2023 regulates telecom operations, rights, and obligations of organisations and individuals participating telecom operations, and State management of telecom operations. Below are some notable changes introduced in the LOT 2023.

Approval and registration for provision of telecom services

The LOT 2023 requires enterprises providing telecom services to obtain a telecom service business licence from the Ministry of Information and Communication (MIC) or conduct the procedure for registration or notification for the provision of telecom services, except certain cases provided in Article 42 of this Law (such as providing telecom services in the form of service agents; hiring transmission lines to provide telecom application services).

There are two (02) types of telecom business licences, namely: (i) licence to provide telecom services with network facilities with a term of 15 years or less, granted to enterprises with network facilities providing services; and (ii) licence to provide telecom services without network facilities with a term of 10 years or less, granted to enterprises without network facilities providing services. In order to be licensed, enterprises must satisfy the conditions set out in Article 36 of the LOT 2023.

The Government will issue further guidelines on telecom services that are subject to registration or notification requirements, and procedures for registration or notification of such services.

Internet-based telecom services, data centre services and cloud computing services

The LOT 2023 adds provisions on management of Internet-based telecom services, data centre services and cloud computing services which will be applicable from 01 January 2025. Internet-based telecom service providers, data centre service providers and cloud computing service providers are required to register with or notify the competent agency in order to provide their services.

The LOT 2023 sets out the rights and obligations of Internet-based telecom service providers, data centre service providers and cloud computing service providers to ensure the quality of services provided, the rights of users as well as information safety and security. Among others, service providers are not allowed to access, exploit or use data of users that is processed, stored, and retrieved through the company’s services without the user’s consent. The service providers are not responsible for the information content of service users during the process of processing, storing, and retrieving information. However, they are not allowed to track or monitor service users’ information, unless a competent state authority issues a lawful request ordering them to do so.

Remarkably, there are no limitations on foreign ownership in Internet-based telecom service providers, data centre service providers and cloud computing service providers under the LOT 2023.

The rights and obligations of foreign organisations that provide Internet-based telecom service, data centre service and/or cloud computing service across border to users in Vietnam will be detailed by the Government.

Competition in telecom business

The LOT 2023 addresses some specific issues regarding competition in telecom business. It states that the Government will stipulate the criteria for determination of telecom service market subject to the State management and those for determination of whether a telecom enterprise or a group of telecom enterprises has dominant position in the telecom service market subject to the State management.

In addition to the general obligations of telecom enterprises, the LOT 2023 also provides specific obligations applicable to dominant telecom enterprises. These include:

• the obligation to perform telecom wholesale activity upon request from another telecom enterprise. Telecom wholesale activity means a telecom enterprise leases out its telecom network or re-sells its telecom service output to another telecom enterprise for provision of telecom services;
• the obligation to implement cost accounting and determine cost for telecom services they provide;
• the obligation not to provide telecom services with prices lower than the telecom services cost, except for sale promotion in accordance with laws; and
• the obligation to formulate standard agreement for telecom wholesale activity in accordance with the guidelines of the MIC.

Auction of telecom numbers store and Internet resources

The LOT 2023 specifies the types of telecom numbers store and Internet resources to be allocated through auction, including: telecom code and numbers for ground mobile network code used for human-to-human communication, ground mobile communications service subscriber numbers, short message service numbers, information answering service numbers, and rights to use Vietnam’s national domain name “.vn” level 2 with one or two characters. It also includes the specific regulations on determination of the initial auction price for each type of telecom resources.

The order and procedures for auction of telecom numbers store and Internet resources shall comply with the laws on property auction.

2. Global Minimum Tax

On 29 November 2023, the National Assembly adopted Resolution 107/2023/QH15 (“Resolution 107”) on the application of top-up corporate income tax under the Global Anti-Base Erosion Rules (GloBE Rules). Resolution 107 is effective on 01 January 2024 and applicable from fiscal year 2024.

Taxpayers, referred to in Resolution 107, include constituent entities of multinational groups with annual revenues of at least EUR 750 million based on consolidated financial statements for two of the last four financial years (except certain entities such as governmental entities, pension funds, and investment funds as the ultimate parent entity).

Resolution 107 contains provisions on Qualified Domestic Minimum Top-up Tax (QDMTT) which applies to the in-scope multinational group’s constituent entities that operate in Vietnam. It provides a formula to calculate the QDMTT in Vietnam in case where a constituent entity or a group of constituent entities that has GloBE income and is subject to a corporate income tax (CIT) rate below 15%. The QDMTT will be deemed to be zero in a fiscal year if a constituent entity or a group of constituent entities in the fiscal year satisfies the following conditions: (a) the average GloBE revenue of constituent entities in Vietnam is less than EUR 10 million, and (b) the average GloBE income of such entities in Vietnam is less than EUR 01million or loss.

In addition to the QDMTT, Resolution 107 also introduces the Income Inclusion Rule (IIR), by which the ultimate parent entity, partially-owned parent company or intermediate parent entity in Vietnam must declare and pay the top-up tax (except certain cases) for its overseas constituent entities that are taxed below 15%.

The foreign currency exchange rate that is used to determine the thresholds of revenue/income quoted in foreign currency under Resolution 107 is the average of the central rate announced by the State Bank of Vietnam for December of the year preceding the relevant year of revenue/income.

A filing constituent entity must submit a GloBE Information Declaration, Top-up Corporate Income Tax Declaration and Explanation for differences between financial accounting standards to the competent tax authority and pay top-up CIT. The filing and payment deadlines are as follows:

• For QDMTT: the filing constituent entity will submit the above documents and pay top-up CIT in Vietnam within 12 months after the last day of the fiscal year.
• For IIR: the filing constituent entity will submit the above documents and pay top-up CIT in Vietnam within 18 months after the last day of the fiscal year with respect to the first year the multinational group falls within the scope of the GloBE Rules, and 15 months after the last day of the fiscal year for subsequent years.

The Government will provide further details on constituent entities, determination of QDMTT and IIR, and other issues relating to tax administration.

3. Determining projects using outdated technology

On 19 December 2023, the Prime Minister issued Decision 29/2023/QD-TTg (“Decision 29”) on procedures for determining projects using outdated technology, potentially causing environmental pollution or being resource-intensive. Decision 29 takes effect from 15 February 2024.

According to the Law on Investment 2020, projects using outdated technology, potentially causing environmental pollution or being resource-intensive are not entitled to an extension of the operation duration. Decision 29 provides detailed guidance on application file and procedures for determining the technology of a project to conclude whether or not the project is using outdated technology, potentially causes environmental pollution or is resource-intensive.

Investors must submit an application file for determining the project’s technology to the Ministry of Science and Technology or the provincial Department of Science and Technology, as the case may be. The application file must include a request for determination of technology, an explanatory statement of the existing status of the used technology and a valid assessment certificate. The competent authority shall process and respond to investors within the timeframe specified in Decision 29.

4. Pharmaceutical business

The Government issued Decree 88/2023/ND-CP (“Decree 88”) dated 11 December 2023 to amend Decree 54/2017/ND-CP dated 8 May 2017 and Decree 155/2018/ND-CP dated 12 November 2018 regarding pharmaceutical business. Decree 88 takes effect from the date of signing.

Medicine importers/manufacturers must declare the prices of medicines before the relevant medicines are circulated in the Vietnamese market and re-declare the prices when having change in the declared prices. Decree 88 allows medicine importers/manufacturers to sell medicines at the declared prices or re-declared prices from the date on which the State agency in charge of medicine prices receives a complete dossier for declaration or re-declaration of the prices as stipulated by laws. The State agency in charge of medicine prices must preserve the confidentiality of declared/re-declared prices until such prices are allowed to be applied.

Decree 88 exempts circulation registration requirements for some semi-finished medicinal materials, pharmaceutical excipients and capsules such as those used for testing, research or manufacture of medicines for export.

Regarding assessment of foreign manufacturers’ satisfaction of goods manufacturing practices for the purpose of circulation registration of foreign medicines in Vietnam, Decree 88 additionally states that the Ministry of Health may conduct an on-site inspection at a foreign manufacturer if such manufacturer fails to apply the good manufacturing practice rules and standards that are issued, announced or recognised by the Ministry of Health.