Monthly Legal Update - January, 2010

• Tax rate on incomes from real estate transfer

As regulated by Circular No. 02/2010/TT-BTC dated January 11th, 2010 of the Ministry of Finance, effectively on February 25th, 2010, incomes from real estate transfer will be taxed at the rate of 25%. Accordingly, transfer price stated in the transfer contract and in the tax declaration form shall not less than the price regulated by Provincial People's Committee or price used for counting registration fee regulated by provincial People's Committee at the effective time of the transfer contract.

Tax payer must submit documents proving the purchase price and related deductible expenses. In absence of the said document, tax rate of 2% of transfer price will be applied. If the declared transfer price is less than the price regulated by Provincial People's Committee, 2% of regulated price will be applied.

• Disclosure of information on the securities market

On January 15th, 2010, The Ministry of Finance issued Circular No. 09/2010/TT-BTC guiding on disclosure of information on the securities market. Accordingly, public companies, issuing organizations making a public offer of bonds, listing organizations, transaction registration organizations, securities companies, fund management companies, securities investment companies, the stock exchanges (SE) and their affiliated persons are subjects to requirement of information disclosure. In addition to the requirement of reporting to the State Securities Commission (SSC), SE on contents of the disclosed information, those entities are required to set up their own website to upload information on shareholder relations which contain company charter, internal management regulations, annual reports, periodic financial reports, and information related to shareholders' meetings. This Circular also gives a longer period for explanation by listing organizations whose stocks reach ceiling price or floor price in 10 consecutive trading sessions or in 5 consecutive trading sessions contrarily to market tendency, instead of 5 consecutive sessions as regulated earlier.

It abrogates Circular No. 38/2007/TT-BTC dated April 18th, 2007 and shall take effect on March 2nd, 2010.

• Guidelines on bankruptcy procedures applicable to credit institutions

According to the Government's Decree No. 05/2010/ND-CP dated January 18th, 2010 effectively from March 15th, 2010 providing more specific guidelines on bankruptcy procedures applicable to credit institutions (CIs), a CI which is incapable of repaying its due debts upon creditors' requests, after the State Bank of Vietnam (SBV) determined in writing not to apply or to cease applying measures for repayment capability restoration or cease applying a special control, shall be alleged falling into bankruptcy status. After receiving petition for bankruptcy, the competent court shall issue a decision to open the bankruptcy proceedings in accordance with Bankruptcy Law.

Where the CI has been already under special control of SBV or applied necessary repayment restoration measures but still not capable of repaying its due debts at creditors' requests, the competent court shall at its own discretion decide to open the property liquidation procedures without convening the creditors' conference.

• Tax obligations of Vietnamese investors operating business overseas

Circular No.11/2010/TT-BTC of the Ministry of Finance dated January 19th, 2010 specifies certain subjects and instances who are entitled to incentives in exemption or refundment of import and export duty in terms of overseas investment projects operated by Vietnamese investors. Such investors may declare and pay corporate income tax in compliance with principles as regulated by Double Taxation Avoidance Treaties between Vietnam and the country where the overseas investment project is executed (if any). Tax rate applied for income from overseas is generally 25% with preferential tax rates to be in accordance with Corporate Income Tax Law.

This Circular supersedes Circular No.97/2002/TT-BTC dated October 24th, 2002 and shall take effect on March 4th, 2010.