Vietnam Regulatory Brief: Trade with Brunei, Tax Incentives, and a Looming Pokemon Go Ban - Vietnam Briefing News
Vietnam and Brunei to Boost Trade, Investment
Vietnam and Brunei are expected to improve trade and invest in several sectors in an effort to strengthen economic ties. During talks held in Brunei on August 26-28, Vietnam’s President, Tran Dai Quang, spoke of several ways in which both countries can cooperate. Dignitaries of both countries have vowed to increase trade to over US $500 million by 2025. In addition, business leaders of both countries signed various documents and have promised to expedite other agreements.
Among the documents signed were MoUs on Cultural Co-operation and Economic and Trade Co-operation, while the leaders applauded the progress on the defense MoU between the Royal Brunei Navy and Vietnam People’s Navy on Bilateral Co-operation which was signed in December 2013. Both governments have also agreed to have the Joint Commission Meeting (JCM) at an earliest date to expand cooperation between the countries. The governments of both countries now want to finalize the agreement on maritime transport. The developments bode well for Vietnam and Brunei as they seek to strengthen ties and plan for greater investment and cooperation.
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Authorities Propose Tax Break for Real Estate Developers
Vietnamese authorities have proposed to halve income tax for real estate builders that renovate deteriorating apartments. As per the proposal, such builders will get a 10 percent preferential tax rate during the 2017-2020 period. Such firms will be required to declare the income of each project separately to get the rate. The aim is to attract developers so that they can restore unsafe buildings, which has become a problem in Hanoi and Ho Chi Minh City. The Finance Ministry has stated that more than 200 buildings need to be rebuilt. The proposed regulation will be submitted to the National Assembly in October. If passed, the development will be a boost to property developers looking to invest in the sector.
Tax Exemption for Environmentally Friendly Products
The authorities issued Circular 128/2016/TT-TBC, which will exempt environmentally friendly products from export tariff, while on other products it will be reduced by half. The decree was issued by the Finance Ministry on August 9. Products that are on the export tables which were issued on a previous decree and also have the country’s green label certificate will be part of the export tax exemption. Products from recycling and waste treatment activities will have their tax rate cut by half.
The new tax rate will apply to organizations and individuals that are producing, trading, and exporting environmentally friendly products as well as products from recycling and waste treatment activities. The new regulation will come into effect on September 23. Foreign companies currently operating in Vietnam should take advantage of the new regulation to reduce their tax burden for exporting such products.
RELATED: Vietnam Outlines Customs and Tax Plans to Enhance Competitiveness
Authorities Consider Banning Pokemon Go
Vietnam’s Ministry of Information and Communications (MIC) is considering banning the popular smartphone game Pokemon Go. Authorities have already banned the game from governmental offices as well as military locations and other restricted sites. The game, which was launched on August 9, has become immensely popular in the country. For the moment the MIC has issued guidelines on how players can be safe while playing the game. Analysts have stated that the MIC will monitor the effects of the game before a complete ban is issued. The MIC has further stated that local and foreign game distributors must obey the law. Several countries including Thailand, Cambodia, and the Philippines have banned Pokemon Go from government and restricted sites.
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