APAC Tax Matters: 13th edition

Vietnam

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At a glance

  • New circular on retail activities for foreign invested enterprises

New Circular on retail activities for foreign invested enterprises

On 22 April 2013, the Ministry of Industry and Trade (“MOIT”) issued Circular No. 08/2013/TT-BCT in respect of the selling of goods and other related activities of foreign invested enterprises in Vietnam (“Circular 08”), which replaces Circular 09/2007/TT-BTM dated 17 July 2007 and Circular 05/2008/TT-BCT dated 14 April 2008 of the MOIT. 

Key changes regarding retail activities under Circular 08 which will come into force on 7 June 2013, include:

  • For the establishment of retail outlets (beyond the first one), Circular 08 will assess the Economic Needs Test (“ENT”) based on the district area, which differs from the former assessment of a provincial area.
  • Circular 08 provides an exemption from the ENT (“ENT Exemption”) for retail outlets that are less than 500 m² in size and located in facilities constructed for the purpose of activities of selling goods (but the establishment of such an outlet is still subject to the approval of the licensing authority).
  • The authority to consider the ENT and the ENT Exemption is to be delegated to the provincial people’s committees. Each provincial people’s committee shall establish an ENT Council for assessing ENT and ENT Exemption applications. The procedures and detailed quantitative criteria for conducting the ENT are not yet known.
  • Circular 08 stipulates more detailed procedures and that an application dossier will apply in respect of  a new or amended Investment Certificate, Business License, and Retail Outlet License for activities of selling goods and other related activities, including the time frame for responding by the licensing authorities.