-
Vietnam
Vietnam | New Decree on Internet Services and Online Information
9 décembre 2024
- Investissements étrangers
- Technologie de l'Information
- Confidentialité - Protection des Données
The Government of Vietnam has issued a new decree governing internet services and online information, which shall come into force on 25 December 2024. Decree No. 147/2024/ND-CP, promulgated on 9 November 2024, supersedes the previous Decree No. 72/2013/ND-CP and its amendments.
This comprehensive legislation, comprising over 200 pages and 62 appended forms, addresses a wide array of internet and online topics. These include inter alia, internet services, domain names, cross-border information provision, social network services, aggregated information websites, online game services, and app store services.
Key Provisions
Cross-Border Information Provision
Offshore service providers, including those offering social network and app store services on a cross-border basis, are subject to stricter requirements if they either lease data storage in Vietnam or meet a threshold of 100,000 or more total visits per month from Vietnam for six consecutive months. These providers must:
- Notify the Authority of Broadcasting and Electronic Information (ABEI) of their contact information
- Monitor and remove illegal content
- Store and manage user data as required
- Authenticate social network user accounts using Vietnamese mobile numbers or identification numbers
- Submit annual and ad hoc reports to the ABEI
- Handle user complaints
Only cross-border providers who have notified the ABEI of their contact details may offer live stream and revenue-generating services. Non-compliance may result in blocks and penalties.
Social Networks
Decree 147 establishes distinct regimes for offshore and onshore social network services:
- Offshore providers meeting the aforementioned threshold must notify the ABEI of their contact information.
- Onshore providers reaching 10,000 total visits per month for six consecutive months or 1,000 regular users per month must obtain a Social Network Licence.
- Other onshore providers with low traffic must obtain a Notification Certificate from the ABEI.
The decree also regulates livestream activities by stipulating conditions for social network service providers to offer livestream functions and for social network accounts to conduct livestream activities.
Online Games
Foreign organisations and individuals are prohibited from providing online games to service users in Vietnam on a cross-border basis. To offer such services, they must establish a local enterprise in Vietnam.
This new decree is expected to have a significant impact on both onshore and offshore service providers in the respective fields and may tighten the regulatory landscape for internet services and online information provision in Vietnam.
Vietnam has embraced the global minimum tax (GMT) to harmonize its tax policies with global standards. While this new tax regime is anticipated to have certain adverse effects on foreign direct investment (FDI), the Vietnamese government is devising proactive measures to mitigate these repercussions and maintain the country’s appeal as an investment haven.
Key Ramifications of the GMT for Vietnam
The GMT mandates multinational corporations (MNCs) with consolidated revenue surpassing €750 million to pay a minimum tax rate of 15%, irrespective of the tax rate in the country where they operate. In Vietnam, this translates to the concept of a qualified domestic minimum top-up tax (QDMTT).
The QDMTT places an extra tax burden on foreign-invested enterprises (FIEs) that are part of an MNC, potentially deterring them from investing or expanding in Vietnam. This is particularly concerning for industries that heavily rely on tax incentives to attract FDI.
Vietnam’s Response: Investment Support Fund and Proactive Measures
In response to the anticipated negative impacts of the GMT, the Vietnamese government has established an investment support fund (Fund) to incentivize investments in targeted sectors. The Fund is primarily funded by proceeds from the State Budget generated by the GMT.
Eligible enterprises for the Fund are those engaged in high-tech product manufacturing, high-tech enterprises, high-tech application projects, and enterprises with investment projects in research and development centers. Eligibility is based on capital size, annual revenue, industry, or technology utilized.
Eligible taxpayers can receive cash subsidies for five specific expense categories:
- Human resource training and development
- Research and development expenses
- Fixed asset investments
- High-tech manufacturing expenses
- Social infrastructure systems
To qualify for Fund benefits, eligible taxpayers must submit an application dossier to the Fund Office in Hanoi between August 15th and 30th of the year following the incurred Supported Expenses. Each Supported Expense category will have a distinct reimbursement ratio, and support payments will be contingent on the actual expenses incurred by eligible taxpayers.
In addition to the Fund, the Vietnamese government is also implementing proactive measures to address the concerns of foreign investors. These measures include:
- Focusing on targeted industries with high growth potential that align with Vietnam’s strategic development goals
- Utilizing the additional revenue collected from top-up tax to enhance infrastructure and labor quality
- Considering cash grants for long-term qualified investments in high-tech industries
Conclusion
The introduction of the GMT poses challenges for Vietnam in attracting FDI. However, the government’s establishment of the investment support fund and proactive measures demonstrates its commitment to safeguarding the country’s competitiveness as an investment destination. By combining targeted support with infrastructure improvements and incentives for specific industries, Vietnam can mitigate the negative impacts of the GMT and continue to attract foreign investors.
Under Vietnam’s presidency of the Association of South East Asian Nations (ASEAN), after eight years of negotiations, the ten ASEAN member states (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) on 15 November 2020 signed a groundbreaking free trade agreement (FTA) with China, Japan, South Korea, Australia and New Zealand, called Regional Comprehensive Economic Partnership (RCEP).
The ASEAN economic community is a free trade area kickstarted in 2015 among the above-mentioned ten members of the homonymous association, comprising an aggregate GDP of US$2.6 trillion and over 622 million people. ASEAN is China’s main trading partner, with the European Union now slipping into second place.
Unlike the EuroZone and the European Union, ASEAN does not have a single currency, nor common institutions, like the EU Commission, Parliament and Council. Similarly to what happens in the EU, though, a single member holds a rotational presidency.
Individual ASEAN Countries, like Vietnam and Singapore, have recently entered into free trade agreements with the European Union, whilst the entire ASEAN block had and still has in place the so-called “plus one” agreements with other regional Countries, namely The People’s Republic of China, Hong Kong, The Republic of Korea, India, Japan and Australia and New Zealand together.
With the exception of India, all the other Countries with “plus one” agreements with ASEAN are now part of the RCEP, which will gradually overtake individual FTAs through the harmonisation of rules, especially those related to origin.
RCEP negotiations accelerated with the United States of America’s decision to withdraw from the Trans-Pacific Partnership (TPP) upon the election of President Trump in 2016 (although it is worth noting that a large part of the US Democratic Party also opposed the TPP).
The TPP would have then been the largest free trade agreement ever and, as the name suggest, would have put together twelve nations on the Pacific Ocean, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the USA. With the exclusion of the latter, the other eleven did indeed sign a similar agreement, called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The CPTPP has however been ratified only by seven of its signatories and clearly lacks the largest economy and most significant partner of all. At the same time, both the aborted TPP and the CPTPP evidently exclude China.
The RCEP’s weight is therefore self evidently heavier, as it encompasses 2.1 billion people, with its signatories accounting for around 30% of the world’s GDP. And the door for India’s 1.4 billion people and US$2.6 trillion GDP remains open, the other members stated.
Like most FTAs, RCEP’s aim is to lower tariffs, open up trade in goods and services and promote investments. It also briefly covers intellectual property, but makes no mention of environmental protections and labour rights. Its signatories include very advanced economies, like Singapore’s, and quite poor ones, like Cambodia’s.
RCEP’s significance is at this very moment probably more symbolic than tangible. Whilst it is estimated that around 90% of tariffs will be abolished, this will only occur over a period of twenty years after entry into force, which will happen only after ratification. Furthermore, the service industry and even more notably agriculture do not represent the core of the agreement and therefore will still be subject to barriers and domestic rules and restrictions. Nonetheless, it is estimated that, even in these times of pandemic, the RCEP will contribute some US$40billion more, annually, to the world’s GDP, than the CPTPP does (US$186billion vis-à-vis US$147billion) for ten consecutive years.
Its immediate impact is geopolitical. Whilst signatories are not exactly best friends with each other (think of territorial disputes over the South China Sea, for instance), the message is clear:
- The majority of this part of the world has tackled the Covid-19 pandemic remarkably well, but cannot afford to open its borders to Europeans and Americans any time soon, lest the virus spread again. Therefore, it has to try and iron out internal tensions, if it wants to see some positive signs within its economies given by private trade, in addition to (not always good) deficit spending by the State. Most of these Countries do rely heavily on Western talents, tourists, goods, services and even strategic and military support, but they are realistic about the fact that, unless the much touted vaccine works really well really soon, the West will struggle with this coronavirus for many months, if not years.
- Multilateralism is key and isolationism is dangerous. The ASEAN bloc and the Australia-New Zealand duo work exactly in this peaceful and pro-business direction.
The ASEAN’s official website (https://asean.org/?static_post=rcep-regional-comprehensive-economic-partnership) is very clear in this regard and states, in fact that:
RCEP will provide a framework aimed at lowering trade barriers and securing improved market access for goods and services for businesses in the region, through:
- Recognition to ASEAN Centrality in the emerging regional economic architecture and the interests of ASEAN’s FTA partners in enhancing economic integration and strengthening economic cooperation among the participating countries;
- Facilitation of trade and investment and enhanced transparency in trade and investment relations between the participating countries, as well as facilitation of SMEs’ engagements in global and regional supply chains; and
- Broaden and deepen ASEAN’s economic engagements with its FTA partners.
RCEP recognises the importance of being inclusive, especially to enable SMEs leverage on the agreement and cope with challenges arising from globalisation and trade liberalisation. SMEs (including micro-enterprises) make up more than 90% of business establishments across all RCEP participating countries and are important to every country’s endogenous development of their respective economy. At the same time, RCEP is committed to provide fair regional economic policies that mutually benefit both ASEAN and its FTA partners.
Still, the timing is right also for EU businesses. As mentioned, the EU has in place FTAs with Singapore, South Korea, Vietnam, an Economic Partnership Agreement with Japan, and is negotiating separately with both Australia and New Zealand.
Generally, all these agreements create common rules for all the players involved, thus making it is simpler for companies to trade in different territories. With caveats on entry into force and rules of origin, Countries that have signed both an FTA with the EU and the RCEP, notably Singapore, a major English speaking hub, that ranks first in East Asia in the Rule of Law index (third in the region after New Zealand and Australia and twelfth worldwide: https://worldjusticeproject.org/sites/default/files/documents/Singapore%20-%202020%20WJP%20Rule%20of%20Law%20Index%20Country%20Press%20Release.pdf), could bridge both regions and facilitate global trade even during these challenging times.
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Vietnam Tackles Global Minimum Tax Implications
2 février 2024
-
Vietnam
- Entreprise
- Investissements étrangers
- Impôts
The Government of Vietnam has issued a new decree governing internet services and online information, which shall come into force on 25 December 2024. Decree No. 147/2024/ND-CP, promulgated on 9 November 2024, supersedes the previous Decree No. 72/2013/ND-CP and its amendments.
This comprehensive legislation, comprising over 200 pages and 62 appended forms, addresses a wide array of internet and online topics. These include inter alia, internet services, domain names, cross-border information provision, social network services, aggregated information websites, online game services, and app store services.
Key Provisions
Cross-Border Information Provision
Offshore service providers, including those offering social network and app store services on a cross-border basis, are subject to stricter requirements if they either lease data storage in Vietnam or meet a threshold of 100,000 or more total visits per month from Vietnam for six consecutive months. These providers must:
- Notify the Authority of Broadcasting and Electronic Information (ABEI) of their contact information
- Monitor and remove illegal content
- Store and manage user data as required
- Authenticate social network user accounts using Vietnamese mobile numbers or identification numbers
- Submit annual and ad hoc reports to the ABEI
- Handle user complaints
Only cross-border providers who have notified the ABEI of their contact details may offer live stream and revenue-generating services. Non-compliance may result in blocks and penalties.
Social Networks
Decree 147 establishes distinct regimes for offshore and onshore social network services:
- Offshore providers meeting the aforementioned threshold must notify the ABEI of their contact information.
- Onshore providers reaching 10,000 total visits per month for six consecutive months or 1,000 regular users per month must obtain a Social Network Licence.
- Other onshore providers with low traffic must obtain a Notification Certificate from the ABEI.
The decree also regulates livestream activities by stipulating conditions for social network service providers to offer livestream functions and for social network accounts to conduct livestream activities.
Online Games
Foreign organisations and individuals are prohibited from providing online games to service users in Vietnam on a cross-border basis. To offer such services, they must establish a local enterprise in Vietnam.
This new decree is expected to have a significant impact on both onshore and offshore service providers in the respective fields and may tighten the regulatory landscape for internet services and online information provision in Vietnam.
Vietnam has embraced the global minimum tax (GMT) to harmonize its tax policies with global standards. While this new tax regime is anticipated to have certain adverse effects on foreign direct investment (FDI), the Vietnamese government is devising proactive measures to mitigate these repercussions and maintain the country’s appeal as an investment haven.
Key Ramifications of the GMT for Vietnam
The GMT mandates multinational corporations (MNCs) with consolidated revenue surpassing €750 million to pay a minimum tax rate of 15%, irrespective of the tax rate in the country where they operate. In Vietnam, this translates to the concept of a qualified domestic minimum top-up tax (QDMTT).
The QDMTT places an extra tax burden on foreign-invested enterprises (FIEs) that are part of an MNC, potentially deterring them from investing or expanding in Vietnam. This is particularly concerning for industries that heavily rely on tax incentives to attract FDI.
Vietnam’s Response: Investment Support Fund and Proactive Measures
In response to the anticipated negative impacts of the GMT, the Vietnamese government has established an investment support fund (Fund) to incentivize investments in targeted sectors. The Fund is primarily funded by proceeds from the State Budget generated by the GMT.
Eligible enterprises for the Fund are those engaged in high-tech product manufacturing, high-tech enterprises, high-tech application projects, and enterprises with investment projects in research and development centers. Eligibility is based on capital size, annual revenue, industry, or technology utilized.
Eligible taxpayers can receive cash subsidies for five specific expense categories:
- Human resource training and development
- Research and development expenses
- Fixed asset investments
- High-tech manufacturing expenses
- Social infrastructure systems
To qualify for Fund benefits, eligible taxpayers must submit an application dossier to the Fund Office in Hanoi between August 15th and 30th of the year following the incurred Supported Expenses. Each Supported Expense category will have a distinct reimbursement ratio, and support payments will be contingent on the actual expenses incurred by eligible taxpayers.
In addition to the Fund, the Vietnamese government is also implementing proactive measures to address the concerns of foreign investors. These measures include:
- Focusing on targeted industries with high growth potential that align with Vietnam’s strategic development goals
- Utilizing the additional revenue collected from top-up tax to enhance infrastructure and labor quality
- Considering cash grants for long-term qualified investments in high-tech industries
Conclusion
The introduction of the GMT poses challenges for Vietnam in attracting FDI. However, the government’s establishment of the investment support fund and proactive measures demonstrates its commitment to safeguarding the country’s competitiveness as an investment destination. By combining targeted support with infrastructure improvements and incentives for specific industries, Vietnam can mitigate the negative impacts of the GMT and continue to attract foreign investors.
Under Vietnam’s presidency of the Association of South East Asian Nations (ASEAN), after eight years of negotiations, the ten ASEAN member states (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) on 15 November 2020 signed a groundbreaking free trade agreement (FTA) with China, Japan, South Korea, Australia and New Zealand, called Regional Comprehensive Economic Partnership (RCEP).
The ASEAN economic community is a free trade area kickstarted in 2015 among the above-mentioned ten members of the homonymous association, comprising an aggregate GDP of US$2.6 trillion and over 622 million people. ASEAN is China’s main trading partner, with the European Union now slipping into second place.
Unlike the EuroZone and the European Union, ASEAN does not have a single currency, nor common institutions, like the EU Commission, Parliament and Council. Similarly to what happens in the EU, though, a single member holds a rotational presidency.
Individual ASEAN Countries, like Vietnam and Singapore, have recently entered into free trade agreements with the European Union, whilst the entire ASEAN block had and still has in place the so-called “plus one” agreements with other regional Countries, namely The People’s Republic of China, Hong Kong, The Republic of Korea, India, Japan and Australia and New Zealand together.
With the exception of India, all the other Countries with “plus one” agreements with ASEAN are now part of the RCEP, which will gradually overtake individual FTAs through the harmonisation of rules, especially those related to origin.
RCEP negotiations accelerated with the United States of America’s decision to withdraw from the Trans-Pacific Partnership (TPP) upon the election of President Trump in 2016 (although it is worth noting that a large part of the US Democratic Party also opposed the TPP).
The TPP would have then been the largest free trade agreement ever and, as the name suggest, would have put together twelve nations on the Pacific Ocean, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the USA. With the exclusion of the latter, the other eleven did indeed sign a similar agreement, called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The CPTPP has however been ratified only by seven of its signatories and clearly lacks the largest economy and most significant partner of all. At the same time, both the aborted TPP and the CPTPP evidently exclude China.
The RCEP’s weight is therefore self evidently heavier, as it encompasses 2.1 billion people, with its signatories accounting for around 30% of the world’s GDP. And the door for India’s 1.4 billion people and US$2.6 trillion GDP remains open, the other members stated.
Like most FTAs, RCEP’s aim is to lower tariffs, open up trade in goods and services and promote investments. It also briefly covers intellectual property, but makes no mention of environmental protections and labour rights. Its signatories include very advanced economies, like Singapore’s, and quite poor ones, like Cambodia’s.
RCEP’s significance is at this very moment probably more symbolic than tangible. Whilst it is estimated that around 90% of tariffs will be abolished, this will only occur over a period of twenty years after entry into force, which will happen only after ratification. Furthermore, the service industry and even more notably agriculture do not represent the core of the agreement and therefore will still be subject to barriers and domestic rules and restrictions. Nonetheless, it is estimated that, even in these times of pandemic, the RCEP will contribute some US$40billion more, annually, to the world’s GDP, than the CPTPP does (US$186billion vis-à-vis US$147billion) for ten consecutive years.
Its immediate impact is geopolitical. Whilst signatories are not exactly best friends with each other (think of territorial disputes over the South China Sea, for instance), the message is clear:
- The majority of this part of the world has tackled the Covid-19 pandemic remarkably well, but cannot afford to open its borders to Europeans and Americans any time soon, lest the virus spread again. Therefore, it has to try and iron out internal tensions, if it wants to see some positive signs within its economies given by private trade, in addition to (not always good) deficit spending by the State. Most of these Countries do rely heavily on Western talents, tourists, goods, services and even strategic and military support, but they are realistic about the fact that, unless the much touted vaccine works really well really soon, the West will struggle with this coronavirus for many months, if not years.
- Multilateralism is key and isolationism is dangerous. The ASEAN bloc and the Australia-New Zealand duo work exactly in this peaceful and pro-business direction.
The ASEAN’s official website (https://asean.org/?static_post=rcep-regional-comprehensive-economic-partnership) is very clear in this regard and states, in fact that:
RCEP will provide a framework aimed at lowering trade barriers and securing improved market access for goods and services for businesses in the region, through:
- Recognition to ASEAN Centrality in the emerging regional economic architecture and the interests of ASEAN’s FTA partners in enhancing economic integration and strengthening economic cooperation among the participating countries;
- Facilitation of trade and investment and enhanced transparency in trade and investment relations between the participating countries, as well as facilitation of SMEs’ engagements in global and regional supply chains; and
- Broaden and deepen ASEAN’s economic engagements with its FTA partners.
RCEP recognises the importance of being inclusive, especially to enable SMEs leverage on the agreement and cope with challenges arising from globalisation and trade liberalisation. SMEs (including micro-enterprises) make up more than 90% of business establishments across all RCEP participating countries and are important to every country’s endogenous development of their respective economy. At the same time, RCEP is committed to provide fair regional economic policies that mutually benefit both ASEAN and its FTA partners.
Still, the timing is right also for EU businesses. As mentioned, the EU has in place FTAs with Singapore, South Korea, Vietnam, an Economic Partnership Agreement with Japan, and is negotiating separately with both Australia and New Zealand.
Generally, all these agreements create common rules for all the players involved, thus making it is simpler for companies to trade in different territories. With caveats on entry into force and rules of origin, Countries that have signed both an FTA with the EU and the RCEP, notably Singapore, a major English speaking hub, that ranks first in East Asia in the Rule of Law index (third in the region after New Zealand and Australia and twelfth worldwide: https://worldjusticeproject.org/sites/default/files/documents/Singapore%20-%202020%20WJP%20Rule%20of%20Law%20Index%20Country%20Press%20Release.pdf), could bridge both regions and facilitate global trade even during these challenging times.