What Are Tax Obligations of a Representative Office in Vietnam?

Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

Representative office of foreign trader in Vietnam has the rights and obligations in accordance with the law of Vietnam. Foreign trader is responsible before the law of Vietnam for all operations of its representative office in Vietnam.

 

Accordingly, representative office in Vietnam is not allowed to conduct business activities, nor carry out other activities for profit-generating purposes. The representative office in Vietnam only performs the activities for the right purposes, scope and duration specified in the certificate to establish the representative office. Besides, the representative office in Vietnam has the right to rent the head office, rent and buy the facilities and materials necessary for the operation of the representative office; to recruit Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; to use an account in foreign currency, in Vietnam dong of foreign currency origin opened by a foreign trader at a bank licensed to operate in Vietnam and only use this account for the operation of the representative office; to have a seal bearing the name of the representative office according to the provisions of Vietnamese law. Representative office in Vietnam can sign contracts, perform transactions with partners when authorized by the enterprise.

Hence, due to the limited scope of activities, the tax liability of a foreign representative office in Vietnam is narrower than that of an enterprise.  As the representative office does not produce or trade in goods and services, it is not required to pay license fees as prescribed. Representative office of foreign trader in Vietnam is dependent unit of foreign trader, established to investigate the market and carry out some trade promotion activities permitted by Vietnamese law, does not carry out production and business activities, so it is not required to pay license fees.

The fact that the representative office has the right to recruit Vietnamese or foreign employees to work at the office is the basis for arising personal income tax obligation. At the same time, representative office of foreign organization is subject to personal income tax registration. For employees working at foreign representative office in Vietnam, the taxable incomes are based on salaries and wages. Declaring, withholding, paying taxes and settling personal income tax of employees working at foreign representative office is the responsibility of such representative office.

ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Da Nang and Ho Chi Minh City could help client to set up representative office in Vietnam and advise on the compliance on regular basis.

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Vietnam to Investigate Anti-Dumping Case of Sorbitol Chemical Products from China, India and Indonesia

On August 18^th, 2020, Trade Remedies Authority of Vietnam (TRAV) acknowledged the Dossier on request of investigation to impose the anti-dumping measures to Sorbitolchemical products originated from China, India and Indonesia from the companies representing the domestic industry (Requester).  If there is anti-dumping actions, the anti-dumping investigation will be initiated and related parties would cooperate with TRAV to provide data as required.

 

On the basis of assessing the Dossier, on September 30^th, 2020, TRAV had confirmed the sufficiency of the dossiers according the the laws on trade remedy.

Within 45 days from the date of receiving sufficient and lawful dossier, TRAV will assess dossier to submit Minister of Ministry of Industry and Trade for consideration whether to process the investigation.

The assessment’s contents includes:

-Identify the legal representative status of the domestic industry of organizations and individuals who submit dossier in accordance with the Law on Foreign Trade Management;

-Define evidence on the dumping of imported goods that cause or threaten to cause significant losses to a domestic manufacturing industry or substantially prevent the formation of a domestic manufacturing industry.

In order to serve the assessment process, as well as to ensure the legitimate rights and interests of the enterprise, TRAV recommends that the domestic enterprises manufacturing trading in the same goods mentioned above provide the following information.

-Enterprise’s information;

-Capacity/design and production of Sorbitol chemical products in 2017, 2018, 2019 and 2020;

-Enterprise’s opinion on the case (to agree, oppose, have no opinion);

-Any document/evidence which companies consider to be related to the case

 

The due date to provide the above information is before 5p.m October 16^th, 2020.

Our competition, anti-dumping, and countervailing duty lawyers of international trade and tax practice at ANT Lawyers, a law firm in Vietnam always follow up trade remedy development to update clients on regular basis.

 

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How Foreigners Could Buy Real Estate in Vietnam?

Regulations on foreigners owning real estate in Vietnam are regulated in Civil Code 2015, Law on Land 2013, Law on Housing 2014, Decree no. 99/2015/ND- CP on guidlines the Law on Housing and related documents.

 

For land, foreign individuals are not eligible to use land assigned or leased by the State, recognized land use rights, received transfer of land use rights. However, a foreign-invested enterprise could be allocated or leased land by the State, recognized land use rights, or received a land use right transfer. Foreign-invested enterprises that are assigned land by the State with the collection of land use levies to execute investment projects on the construction of houses for sale or for sale in combination with lease.

For housing, foreign entities eligible for the homeownership in Vietnam include: foreign entities who invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law; foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as foreign organization); foreign individuals who are allowed to enter Vietnam.

The foreign entities are eligible for the homeownership in Vietnam if they invest in project-based housing construction in Vietnam as prescribed in this Law and corresponding regulations of law; or buy, rent and purchase, receive, or inherit commercial housing including apartments and separate houses in the project for housing construction, except for areas under management relating to national defense and security as prescribed in regulations of the Government.

Foreign organizations and individuals must have documents proving being the eligible subjects and meeting conditions to own houses in Vietnam. A foreign individual must have an unexpired passport bearing the entry seal of the Vietnam’s immigration authority and not given diplomatic immunity and privileges according to Ordinance on diplomatic immunity and privileges of diplomatic missions, consular offices, and representative authorities of international organizations in Vietnam. Foreign organizations must be subjects of owning houses in Vietnam which have investment registration certificate or a permission issued by a Vietnam’s competent authority for operation in Vietnam which is still unexpired at the time of housing transaction (hereinafter referred to as investment registration certificate).

A foreign entity shall not be granted a Certificate of the house and may only sell or offer it to another entity eligible to own housing in Vietnam in the case being: a foreign organization or individual receives a house as an inheritance or a gift which is located in an area in which foreign entities must not own houses, or the quantity of which exceeds the permissible limits; a foreign organization that does not operate in Vietnam, or a foreign individual who is not permitted to enter Vietnam, receives a house in Vietnam as a gift or an inheritance.

For specific situations, to avoid future dispute in house ownership arisen from the purchase, lease of property, house, land from the state, developer or other seller, or lessor it is important that the client check with property lawyers for eligibility, conditions and other relevant matters.

ANT Lawyers - a Law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or serive request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529

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What is the Effective Date of the Contract and the Time of Ownership Transfer?

One of the most common disputes in contract disputes is the dispute on the effective date of the contract. In order to avoid these disputes, parties should refer to the nature of the validity of the contract as well as distinguish the difference between effective date of the contract and the time of ownership transfer. 

Contract dispute law firm in Vietnam

Regarding the effective date, contract shall take effect when contract meets all condition of participants in contract, condition of purpose and contents of contract and condition of form (in case there is regulation). Specifically, participants in contract shall have legal capacity in conformity with such contract and the participation shall base entirely on voluntariy will. For the second condition, the purpose and contents of the contract will not be contrary to the law and social ethics. When there are enough conditions met, a contract legally entered into shall take effect from the time when it is entered into, unless otherwise agreed or otherwise provided by law. From the effective date of the contract, parties shall mutually exercise rights and perform obligations as agreed. A contract may be amended or terminated as agreed by the parties or prescribed by law.

 

Through definition of the effective date of the contract, basic difference between dealing with breaches of contracts which have taken effect and dealing with breaches of invalid contracts can clearly be seen. In invalid contracts, the general remedy rule is restoring everything to its original state and returning to each other what have received. Dealing with breaches of contracts, which have taken effect, must be based on the terms of contract on how to handle such violations. If the contract does not stipulate, the provisions of law on such violation will be applied. It should be noted that there are many regulations from time to time, so the law must be properly applied.

Specially, a contract violating conditions of form validity shall be invalid, except that a party or the parties have fulfill at least two third of the obligations in the contract. A court, at their request, shall issue a decision on recognition of the validity of such contract. It is understood that the contract takes effect after the Court’s judgments or decisions take effect. After the contract takes effect, regulation of law will be applied to determine time of ownership transfer. Contract which can be recognized as valid does not mean that such contract will naturally take effect at the time of fulfilling two third of the obligations. Recognition of the Court is to force parties to continue to execise the obligations of the contract or resolve later disputes according to valid contract.

 

Time of ownership transfer normally belongs to stage of contract enforcement, which is after the effective date of the contract. Except for special contracts (such as contracts for gift), whose time of ownership transfer can be a condition of making contract be valid. With respect to other normal contract, time of ownership transfer is not related to validity condition of contract, which does not make the contract be valid or invalid. It should be noted that time of ownership transfer is stipulated differently with respect to different contract, different property and different specific time. According to Vietnam law of transfer of ownership rights by owner, when an owner transfers ownership rights to another person through a contract for sale and purchase, exchange, gift or loan, other contract of ownership transfer or through inheritance, the ownership rights of the owner shall terminate from the time when the ownership rights of the transferee arise.

The law stipulates that the time of establishing ownership rights and other property-related right shall be determined according to Civil Code 2015 and relevant laws. If there is no relevant regulations of law, the agreement of the parties shall be applied. If there is no either relevant regulations of law or agreement of the parties, the time of establishing ownership rights and other property-related rights shall be the time when the property is transferred. The time when the property is transferred is the time when the obligee or his or her legal representative possesses the property. In case where the property which has been not transferred and there are yield or income arise from that property, such yield or income shall belong to the transferor, unless otherwise agreed.

 

Legal significance of determining time of ownership transfer is to determine who is responsible for the risk and property. According to law, owner shall bear all risks of the property under his or her ownership, unless otherwise agreed or unless otherwise prescribed by laws. The holder of other property-related rights shall bear risks of the property within his or her right scope, unless otherwise agreed with the owner of the property or unless otherwise prescribed by laws.

ANT Lawyers - a Law firmin Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or serive request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529

Let ANT Lawyers help your business in Vietnam.

 

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International Law Firm in Vietnam

ANT Lawyers is Vietnam exclusive member of Prae Legal, an international law firm network, providing full ranges of legal services

Prae Legal Network provides clients with access to global legal resources through its vast network of well-established 242 law offices in trade centers in 129 countries.

Our respectable and influential professionals are experienced in all fields of law. We are ready to provide legal solutions to companies and people all around the world for their legal needs. We can help when you would do business transactions in the most challenging parts of the world.

Prae Legal provides comprehensive legal expertise in almost all major practice and industry areas. We have general and subject specific legal expertise that could be applied to different needs of each industry. An industry will be interested in legal developments affecting its own business and legal environment.

International Law firm in Vietnam

Together with global law firm partners, ANT Lawyers has the capability to provide in depth legal assistance in the following practice areas:

 

Together with global law firm partners, ANT Lawyers has the capability to provide in depth legal assistance in the following practice areas:

·        Agricultural & Agribusiness

·        Antitrust, Competition and Trade Group

·        Automotive

·        Aviation

·        Banking and Financial Services

·        Business Crimes and Compliance

·        Capital Markets

·        Construction and Infrastructure

·        Corporate Organizations and Securities

·        Employee Benefits and Pensions

·        Employment and Labor Law

·        Energy and Natural Resources

·        Environmental

·        Government Affairs

·        Health Care Industries

·        Immigration

·        Insolvency, Bankruptcy and Restructuring

·        Insurance and Reinsurance

·        Intellectual Property

·        Life Sciences

·        Litigation, Arbitration and Dispute Resolution

·        Media, Entertainment and Sports

·        Mergers and Acquisitions

·        Private Equity

·        Project Finance

·        Real Estate

·        Tax

·        Technology, Outsourcing and Privacy

·        Telecommunications

·        Products Liability and Toxic Tort

·        Trademarks, Copyrights, Trade Secrets and Unfair Competition

·        Product Liability and Product Safety

·        Cross-Border Transactions

·        E-Commerce & Technology

·        Product Liability and Product Safety

 

ANT Lawyers – a Law firm inVietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or serive request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529

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Investigation of Imposing Anti-dumping and Countervailing Measure to some sugar cane products from Thailand (AD13)

On September 21^st 2020, Minister of Ministry of Industry and Trade signed the Decision No. 2466/QD-BCT regarding the Investigation ofimposing Anti-dumping and Countervailing measure to some sugar cane products from Thailand. Related parties may by themselves or authorize to experienced law firm in Vietnam on international trade to work with Trade Remedies Authority of Vietnam (TRAV) to cooperate and response.

1.Background

On August 08, 2020, Trade Remedies of authority of Vietnam (TRAV), Ministry of Industry and Trade received the dossiers on requesting the anti-dumping measure to some sugar cane from Thailand. The requester is 6 Companies representing for domestic industry being (i) Son La Sugar Joint Stock Company; (ii) Son Duong Sugar and Sugarcane Joint Stock Company; (iii) KCP Viet Nam Industries Limited; (iv) Can Tho sugar Joint stock Company; (v) The 333 Sugar Joint Stock Company; (vi) Soc Trang Sugar Corporation.

The requester provided the reasonable bases for calculation of dumping margin and acts of countervailing originated from Thailand. The requester provided the reasonable information to prove the significant damage of domestic industry. The requester’s dossier proved the existence of causal relationship between imported products and the significant damage of domestic industry.

Hence, TRAV determined dossier of the requester satisfied the law of anti-dumping, countervailing and petition of Minister of Ministry of Industry and Trade.

2.Investigation’s details

i) Products under investigation

Product’s name: Sugar cane

Scientific name: Sacarose sugar (sucrose)

Common name: include but not limited to sanding sugar, sugar cane, crystal sugar, raw sugar, white sugar, refined sugar.

Sugar cane products are classified under the following HS code: 1701.1300, 1701.1400, 1701.9910.

The Ministry of Industry and Trade may amend and supplement the list of HS codes of the product under investigation to be in accordance with the description of the product under investigation and other changes (if any).

ii) Originated of products under investigation: Thailand

iii) Period of investigation (POI)

-Period of investigation to determine the anti-dumping and countervailing action: from July 1^st 2019 to June 30^th 2020

-Period of investigation to determine the damage of domestic industry:

The first year: from July 1^st 2017 to June 30^th 2018

The second year: from July 1^st 2017 to June 30^th 2019

The third year: from July 1^st 2017 to June 30^th 2020

iv) Duty Levels Proposed by Requester:

The anti-dumping duty which is requested by the requester is 37,9%.

3.Register as related parties

Pursuant to Article 6 of Circular No. 37/2019/TT-BCT, organizations and individuals stipulated in Article 74 of Law on foreign trade management may register as related parties in this case with TRAV in order to access to publicly circulated information during the investigation process, send comments, information and evidence related to the investigation content within sixty (60) working days from the day on which the decision on investigation takes effect via post or email.

In order to ensure rights and interests, the investigating authority recommend that organizations and individuals which produce, import or use products under investigation register as related parties to carry out the right to access information, provide information and express opinions during the investigation process.

4.Investigation Questionnaire

Within 15 days after the issuance of the investigation decision of the Minister of Industry and Trade, the Investigating Authority shall send the investigation questionnaire to the Related Parties, including:

-The applicant requests for application of Anti-dumping and Countervailing measures;

-Other domestic manufacturers which Investigating Authority knows;

-Parties requesting for application investigation of anti-dumping and countervailing measures which Investigating Authority knows;

-Importers of products under investigation;

-Diplomatic authorities of the country where the origin of products under investigation;

-Other related

5.Cooperating in the investigation process

Any related party refuses to participate in the case or does not provide necessary evidences or significantly ​obstructs the completion of the investigation, the investigation conclusion regarding such relevant party shall be based on available information.

Any related party provides false or misleading evidences, such evidences shall not be reviewed and investigation conclusion regarding such relevant party shall be based on available information.

TRAV recommends that related party participate and cooperate fully in the process in order to ensure legitimate rights and interests and avoid potential disputes.

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What Need to Know About Dispute between Foreign Investor and Host State?

 

In the globalization and international integration in general as well as economic integration in particular, foreign investment including foreign direct investment (FDI) and indirect foreign investment in countries ảe increasing significant. This trend also comes along with the growth of international investment dispute between foreign investor and host state (or related state agencies). This dispute is often complex with huge amount of compensation demanded by the investor.

Subjects of this dispute include foreign investor (plaintiff) and host state or related state agencies (defendant). In particular, Vietnam laws stipulate that foreign investor means an individual holding a foreign nationality or an organization established under foreign laws an making business investment in Vietnam. The second subject is state, a “special” subject because this subject is the beneficiary of “jurisdictional immunity”. Specifically, jurisdictional immunity is a right of a state which do not be judged by any international or national jurisdiction without the consent of such state.

This dispute shall relate to the investment of foreign investor in host state according to regulation of (i) investment law of host state; (ii) treaty of promotion and protection of investment (bilateral investment treaty - BIT) or investment chapter in bilateral/regional trade agreements; or (iii) contract relating to investment of foreign investor and competent state agencies. 

To promote foreign investment and to protect investors, countries around the world as well as Vietnam have signed and will sign bilateral agreements on promotion and protection of investment (BIT), agreement between countries on promotion and protection of investment (international investment agreement – IIA), free trade agreement (FTA) having investment chapter. Accordingly, investor holding the nationality of a signatory to investment agreement (chapter) is entitled to have full protection and security, fair and equitable treatment, non-discrimination, no expropriation... of investment according to regulation of such investment agreement (chapter) in host state. Besides, to ensure that dispute between foreign investor and host state will be fairly and properly settled and to prevent the case of refering to jurisdictional immunity to avoid being sued, there are provisions on dispute settlement mechanisms between foreign investor and host state in most of these agreements.

Through investment agreement (chapter), the host state abandons its right of jurisdictional immunity to be sued and judged at competent jurisdiction. If the host state violates and harms the foreign investor, such country shall compensate according to judgement of that jurisdiction. Jurisdictions being competent to resolve disputes between foreign investor and host state may be arbitration, court of the host state; international arbitration; or other jurisdictions by agreement between the parties. 

Behaviours which state violates commitment on investment protection may be very broad, including: (i) expropriation such as: requisition or nationalization without compensation; “indirect” requisition or “according to regulation” without reasonable compensation; (ii) no fair and equitable treatment; (iii) no full protection and security; (iv) there is discrimination such as violation of most favoured nation and national treatment; (v) and/or other violations such as: legal obligation/commitment, right of withdrawing investment and interest, compensation due to war or riot.

Dispute resolution process between foreign investor and host state usually takes place with three stages, including (i) conflict management stage means carrying out resolving complaints and consultation, mediation; (ii) dispute resolution stage; and (iii) implementation stage. In above process, consulting with international dispute lawyers in Vietnam to for resolution of international investment disputes is a very important and necessary.

ANT Lawyers - a Law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or serive request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529

 

 

 

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