Rules govern listing of shares after IPO

The Government issued Decree No 58/2012/ND-CP on July 20 to implement portions of the Law on Securities relating to private placement and public offerings of securities. The new decree repeals Decree No 14/2007/ND-CP as amended by Decree No 84/2010/ND-CP and Decree No 01/2010/ND-CP.

Decree No 01 previously required one year before securities acquired under private placement could be transferred. Decree 58 scraps these requirements for an unlisted company and retains them for public companies.

Decree No 58 also updates provisions governing public offerings, adding the additional condition for initial public offers (IPOs) by infrastructure or hi-tech enterprises that the board of management must undertake to list sold shares on the securities market within one year from the date in which the enterprise was established.

The decree further provides stricter conditions for bond issues denominated in Vietnamese dong by international financial organizations in Vietnam. The maximum term of such bonds is set at 10 years. The capital raised from issue cannot exceed 30 per cent of the total project cost, and the issuing organization must undertake to bring list the bonds on the market within one year of their initial public offer.

The decree also imposes additional burdens on foreign issuers who seek to make an IPO in Vietnam. Issuers must have been profitable for the preceding two years. Proceeds from the IPO cannot exceed 30 per cent of total project capital. For an offer of convertible shares, there must be an undertaking by general shareholders meeting or board of management that such securities will be listed on the securities market within one year from the IPO.

Decree No 58 takes effect on September 15.

Certain commercial contractors to be subject to tax

The Ministry of Finance issued Circular No 60/2012/TT-BTC on April 12 governing the tax liability of foreign organizations or individuals doing business or having incomes in Vietnam.

Under the circular, foreign organizations or individuals selling goods in Vietnam under the specified commercial terms must pay the foreign contractor tax. The tax also applies to foreign organizations and individuals providing goods in Vietnam through on-the-spot import or export.

The circular, which took effect on May 27, also changes the tax rates applicable to some business lines of business. It replaces Circular No 134/2008/TT-BTC of December 2008.

Gov't clarifies tax incentives for SMEs

The Government has just issued a decree clarifying tax reductions and exemptions for small- and medium-sized enterprises grappling with difficulties due to the economic downturn.

The decree, coded 60/2012/ND-CP and issued on Monday, allows for a 30% reduction of corporate income tax in 2012 for SMEs, except those in the areas of real estate, lottery, securities, banking, insurance, and production or provision of commodities and services that are subject to the special consumption tax.

Enterprises that are subject to the 30% tax reduction also include labor-intensive ones in areas of farm produce processing, footwear and garment making, electronic components, and construction. In these cases, enterprises must have at least 300 regular laborers in 2012.

The Government in its decree also offers exemptions of value-added tax and corporate income tax for enterprises involved in the business of food catering for workers of other enterprises. However, those supplying food portions for others in the area of transport and aviation are not subject to these incentives.

In the same period of time, if an enterprise is entitled to different tax incentives for the same taxable income, it can choose the most preferential incentive.

In case enterprises are already enjoying other incentives of corporate income tax under the prevalent law, then the tax reduction as provided for in this decree will be calculated on the rest sum after deducting the tax incentives.

The decree will take effect as from September 20.

Sources: Biz Consult and the Saigon Times