1. Land prices

The Government issued Decree 71/2024/ND-CP (“Decree 71”) dated 27 June 2024 to implement the Land Law 2024 on land prices. Decree 71 takes effect from the date on which the Land Law 2024 becomes effective, except Article 37. Here we highlight some key aspects of Decree 71.

Methods of land valuation and factors affecting land prices

Decree 71 provides detailed instructions for applying the methods of land valuation prescribed in the Land Law 2024 which include (i) the comparison method, (ii) the income method, (iii) the surplus method, and (iv) the land price adjustment co-efficient method. These methods will be used to formulate the land price table as well as determining a specific land price.

Factors affecting the land prices shall be taken into account in the formulation of the land price table and determination of a specific land price. Factors particularly affecting land prices for non-agricultural land include: location and position of land parcels and land areas; traffic conditions; conditions on water supply, drainage and electricity supply; factors related to construction planning include land use coefficient, construction density, construction boundaries, limits on construction heights, limits on the number of basements built according to detailed planning; current environmental and security status; land use term; and other factors affecting land prices in conformity with actual conditions, cultural traditions and customs of the locality. For agricultural land, the factors particularly affecting land prices include: plant/domestic animal productivity; location and characteristics of land parcels and land areas; traffic conditions, land use term; and other factors affecting land prices in conformity with actual conditions, cultural traditions and customs of the locality.

Specific factors affecting land prices in the locality shall be issued by the provincial People’s committee. Where specific factor(s) are not adopted by the provincial People’s committee, the land valuation organisation shall propose the factor(s) in the explanatory report on the land price plan, and then submit to the land price appraisal council for consideration and decision.

Specific land prices

Specific land prices shall apply to the cases specified in Article 160.1 of the Land Law 2024. Decree 71 sets out the procedures to determine specific land prices as follows:

• Selection of the land valuation organisation and establishment of the specific land price appraisal council.
• Determination of specific land price. The land valuation organisation will (a) collect and analyse necessary information, (b) select the appropriate land valuation method and report to the specific land price appraisal council for decision, and (c) prepare an explanatory report on the land price plan and draft land valuation certificate and send those documents to the relevant land management agency.
• Appraisal and decision on the specific land price. The land management agency will submit the request for appraisal of the land price plan and other documents as attachments to the specific land price appraisal council. Upon completion of such appraisal, the dossier of land price plan must be submitted to the competent People’s committee for issuance of the decision on the specific land price.

Other issues

Decree 71 details the order and procedures for formulation and adjustment of land price tables. The land price table will be updated annually and announced for application as from the first day of the following year, or in the year in which the land price table is adjusted (if necessary).

Decree 71 includes the definitions of “transfer in the market”, “land areas to be valued” and “comparative land parcels”. In addition, it defines a land valuation organisation as an organisation providing consultancy on determination of land prices stipulated in Article 162.3 of the Land Law 2024 that is hired or assigned by a land management agency to perform the consultancy on determination of land prices.

2. Extending the deadlines for payment of tax and land rentals in 2024

On 17 June 2024, the Government issued Decree 64/2024/ND-CP (“Decree 64”) to extend the deadlines for payment of tax and land rentals in 2024, and Decree 65/2024/ND-CP (“Decree 65”) to extend the deadline for payment of special consumption tax for automobiles manufactured or assembled domestically. Both Decrees will be effective until 31 December 2024.

Value added tax, corporate income tax, personal income tax and land rentals

Decree 64 continues to extend the deadlines for payment of value added tax (excluding VAT at the import stage), corporate income tax (CIT), personal income tax and land rentals in 2024 for business entities that were eligible for the extension under Decree 12/2023/ND-CP. In particular:

• For monthly VAT declaration: the deadline for payment of VAT payable in May 2024 will be extended until 20 November 2024; the deadlines for payment of VAT payable in June, July, August and September 2024 will be extended until 20 December 2024. For quarterly VAT declaration, the deadlines for payment of VAT payable in the second quarter and the third quarter of 2024 will be extended until 31 December 2024.
• The deadline for payment of provisional CIT payable in the second quarter of 2024 will be extended for 03 months.
• The deadline for payment of 50% of land rentals in the second payable period of 2024 for eligible entities that lease land directly from the State with annual payment is extended for 02 months as from 31 October 2024.
• With respect to family households and business individuals, the deadline for payment of VAT and personal income tax payable in 2024 is extended until 30 December 2024.

In order to enjoy the 2024 tax and land rental extension, eligible entities need to file their extension request (in the Form attached to Decree 64) to the competent tax agency by 30 September 2024.

Special consumption tax

According to Decree 65, the deadlines for payment of special consumption tax payable in May, June, July, August and September 2024 will be extended until 20 November 2024.

To be eligible for such extension, enterprises manufacturing or assembling automobiles domestically are required to submit their extension request (in the Form attached to Decree 65) to the competent tax agency by 20 November 2024.

3. VAT reduction

The Government issued Decree 72/2024/ND-CP dated 30 June 2024 on reduction of value added tax under Resolution 142/2024/QH15 dated 29 June 2024 of the National Assembly.

Decree 72 specifies the VAT reduction for goods and services which are currently subject to VAT rate of 10%, except for goods and services in the following sectors: (a) telecommunication, finance, banking, securities, insurance, real estate business, metals, metallic products, mining products (except coal mining), coke, refined petroleum, chemical products; (b) goods and services subject to special consumption tax; and (c) information technology, as listed in Annexes of Decree 72.

The VAT rate will be reduced to 8% for business entities calculating VAT by deduction method. Business entities calculating VAT by direct method shall be entitled to a reduction of 20% of the VAT calculation percentage. The VAT reduction is applicable from 01 July 2024 until 31 December 2024.

4. Registration of standard contracts and general trading conditions

The Prime Minister issued Decision 07/2024/QD-TTg (“Decision 07”) dated 20 June 2024 issuing the list of products, goods and services for which standard contracts and general trading conditions must be registered.

Those products, goods and services include the following:

• Supply of electricity for living purposes;
• Supply of water for living;
• Pay television;
• Terrestrial mobile telecom services (talking services, message services, Internet assess services);
• Terrestrial fixed telecom services (talking services, Internet assess services);
• Passenger air transport;
• Passenger railway transport; and
• Purchase and sale of condominium

Decision 07 takes effect from 1 July 2024 and replaces Decision 02/2012/QD-TTg dated 13 January 2012, as amended.

5. Payment agency activities

On 21 June 2024, the State Bank of Vietnam (SBV) issued Circular 07/2024/TT-NHNN (“Circular 07”) regulating payment agency activities. Circular 07 takes effect from 1 July 2024 and contains some key issues as below:

Circular 07 regulates the agency activities of payment agents for commercial banks, cooperative banks and foreign bank branches (referred as principals). Entities that can act as payment agents include commercial banks, cooperative banks, foreign bank branches, people’s credit funds, micro-financial organisations, and other entities which are not credit institutions or foreign bank branches. The appointing a payment agent and/or acting as a payment agent of the said credit institutions must conform with the items recorded in the banking licence granted by the SBV.

The principal can appoint a payment agent to (i) receipt dossiers, check and verify customer identification for opening of bank accounts, (ii) receipt dossiers, check and verify customer identification for issuance of bank cards, and/or (iii) handle transaction documents, accept or pay cash for customers to conduct certain transactions as stipulated in Circular 07.

While not providing transaction limits for payment agents which are credit institutions, Circular 07 does provide transaction limits for payment agents which are other entities as follows:

• The transaction limit to each individual customer will be not more than VND20 million per day; and
• The payment agent is only allowed to conduct transactions for its customers within the balance in its payment account opened at the principal to perform agency activities (such account must be separated from other accounts of the payment agent). The transaction limit to each payment agent point will be not more than VND200 million per day and VND5 billion per month.

Payment agents must enter into agency contracts with a principal. Certain information must be included in the agency contract such as the scope of agency, transaction limits applicable to a customer and the payment agent, the term of the agency contract, commission rates, the quantity of payment agent points, and provisions on dispute resolution. Payment agents are not allowed to assign a third party as their payment agent.

Circular 07 also sets forth the rights and responsibilities of the principals and the payment agents. For example, the principals must oversee and be wholly responsible for the payment agency activities of their payment agents, and issue the internal rule on assignment of payment agents.

6. Sale and purchase of corporate bonds by credit institutions

On 28 June 2024, the SBV issued Circular 11/2024/TT-NHNN (“Circular 11”) amending Circular 16/2021/TT-NHNN dated 10 November 201 on sale and purchase of corporate bonds by credit institutions and foreign bank branches. Circular 11 takes effect on 12 August 2024.

Under Circular 11, the bond issuer must provide information on related persons to the credit institution prior to the date on which the credit institution purchases corporate bonds. The issuer’s related persons include organisations and individuals that have relationship with the issuer according to Article 4.24 of the Law on Credit Institutions.

Credit institutions are required to use the non-cash payment service when making payment in sale and purchase of corporate bonds in accordance with laws on non-cash payment.

Circular 11 abolishes Article 4.11 of Circular 16/2021/TT-NHNN which restricts a credit institution to repurchase unlisted corporate bonds that the credit institution has sold and/or unlisted corporate bonds issued in the same batch/tranche as the sold unlisted corporate bonds.

7. Environmental protection

The Prime Minister issued Decision 496/QD-TTg dated 11 June 2024 on the Plan for management and elimination of controlled ozone depleting substances and greenhouse effect-causing substances (the “Plan”).

The overall objective of the Plan is to effectively manage and eliminate controlled ozone depleting substances and greenhouse effect-causing substances under the Montreal Protocol by enhancing the management solutions, converting technologies and using substances with a low global warming potential (GWP) value or GWP of “0”, and deploying sustainable cooling solutions.

The Plan includes (i) a schedule to phase out the consumption of hydro-chloro-fluoro-carbons (HCFCs) and  hydro-fluoro-carbons (HFCs), and (ii) a schedule to phase out the production and import of products and equipment containing HCFCs and HFCs. Under the Plan, technicians who install, operate, maintain and/or repair products and equipment containing HCFCs and HFCs will be required to possess necessary qualifications and certificates.

As regards sustainable cooling solutions, the Plan sets a target of 50% of new construction works being certified as green construction works in the period from 2035 to 2039, and 100% of new construction works being certified as green construction works by 2044. The Plan proposes, among other things, to improve the legal framework for use of energy economically and efficiency, reduction of carbon emission and development of green construction works (such as issuing norms for use of energy applicable to buildings; integrating the sustainable cooling requirements in the legal documents related to urban planning, design and construction).