VIETNAM – THE GOVERNMENT ISSUES FAVORABLE POLICIES ON TAX AND FEES FOR BUSINESSES AMID THE WORST COVID-19 OUTBREAK

1. VIETNAM – THE GOVERNMENT ISSUES FAVORABLE POLICIES ON TAX AND
FEES FOR BUSINESSES AMID THE WORST COVID-19 OUTBREAK
Recently, the Ministry of Planning and Investment issued the Draft Decree on the
Government’s incentives for businesses suffering from the consequence of the corona virus
pandemic. It is aimed that by the end of 2021, at least 01 million businesses will have access
to favorable credit policies, reduction or termination of payment of tax, land fees as well as
electricity, water, telecommunication charges. The Draft Decree is pending the Prime
Minister’s approval.
Under the Draft Decree, there are four key groups of tasks for government agencies.
Group 1: Implement flexible and effective measures to prevent and control the COVID-19
pandemic, creating conditions for enterprises to stabilize and maintain production and business
activities.
Group 2: Ensure stable production, smooth and efficient circulation of goods, overcome
supply chain disruptions
_ Apply fast-track customs clearance for aid or donation from abroad for the healthcare sector
to deal with the pandemic
_ Allow enterprises to submit scanned copies certified by digital signatures for documents that
must be submitted as originals in the form of paper/notarized/certified original to resolve
bottlenecks of customs clearance of goods
Group 3: Support to cut costs, remove difficulties in cash flow for businesses
_ Propose policies suspending or reducing the social insurance premiums in 2021 for
businesses until June 2022.
_ Develop a plan to support air transport enterprises, and report to the Prime Minister in
September 2021.
- Requesting shipping companies to publicly and transparently list shipping rates to eliminate
unreasonable increase in freight rates that lead to cost burden for enterprises
_ Reduce of electricity prices for goods warehouses of logistics and processing enterprises in
the agriculture, forestry, fishery and a number of commodity industries with export turnover of
over USD 1 billion USD. Continue to reduce electricity prices for tourist accommodation
establishments.
- Expeditiously implement the issued policies on relaxation and reduction of taxes, fees,
charges and land rents; implement preferential tax policies for imported goods to finance
COVID-19 prevention and control after being approved by the Government.
- Extend the deadline for paying excise tax on automobiles manufactured or assembled in
Vietnam. Continue to reduce registration fees for domestically manufactured or assembled cars
for an additional period of time in line with the COVID-19 pandemic.
_ Research to allow travel businesses to temporarily withdraw deposits for domestic and
international travel and tourism services; reduce deposit withdrawal settlement time from 60
days to 30 days; continue to extend the reduction of the license fee for travel service business
and issue tourist guide cards until the end of 2021.
_ Continue to administer monetary policy to control inflation, contributing to stabilizing the
macro-economy; encourage credit institutions to continue reducing lending interest rates for
existing loans and new loans to support production and business.

2. _ Supplement policies on debt rescheduling, exemption and reduction of interest and fees,
keeping the same debt group for customers affected by the Covid-19 epidemic
_ Research and consider the exemption of trade union fees for members of businesses affected
by the COVID-19 pandemic in 2021 and 2022
Group 4: Regarding labor issues, experts
_ Propose policies to flexibly apply and relax regulations and conditions on the grant and
extension of work permits for foreign experts working in Vietnam
_ Adjust regulations on tax finalization and bad debt and for borrowing capital to pay wages to
employees when restoring production and business.
This is the second Draft Decree issued by the Ministry of Planning and Investment upon
collection and investigation of opinions from Deputy Prime Minister Vu Duc Dam, Deputy
Prime Minister Le Van Thanh and opinions of 15 ministries. As such, it has reflected the current
situations as well as takes into consideration the cities’ and provinces’ proposals. The Vietnam
Government has continuously proved that it accompanies the business community to
immediately implementing measures to remove difficulties and bottlenecks in production and
business with the motto "soonest - most effective" in order to minimize damage and negative
impacts on the business sector.
For more information on the above, please do not hesitate to contact the author Dr. Oliver
Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General
Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam
Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of
the NATIONAL ASSEMBLY OF VIETNAM.