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Vol 50, December 24th 2014

BUSINESS REVIEW VIETNAM

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Bustling Christmas atmosphere in Vietnam

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INSIDE THIS ISSUE

Highlights

SBV to support high-tech agriculture

Vietnam tire market set to grow at over 8% during 2014-2019: report

Rouble depreciation affects Vietnamese market

Mobile devices market set for holiday pickings

Economy

CPI declines in both major cities

Low inflation leaves room for interest rate

Banks & Finance

Lending rises by 11.8% on track to hit annual target

Credit expected to rise in 2015 with help from agriculture sector

BIDV – Hiroshima Shinkin ink MoU

Stock market capitalization tops $55b

Investment

HCMC posts 94% FDI surge

Samsung could double-down on Vietnam by 2017

Japanese oil company signs MoU with eye on refinery

Enterprises

Firms join first Vietbuild Home expo in HCMC

Awards honour SMEs and brand name developers

Market & Prices

City ensures supply of Tet goods

HCMC office space market remains stable: CBRE report

Legal Updates

Reducing import duty rates on some vehicles from Jan 1, 2015

Law on amendments to tax Laws

Regarding tax on differences resulted from the market price – based

capital contribution

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ECONOMY

CPI declines in both major

cities

VNS - CPIs fell in the country's two

largest cities in Dec, according to

the statistics departments of Hanoi

and HCMC.

The HCMC Statistics Dept reported

that the city's CPI in Dec decreased

by 0.36% compared with the rates

in Nov due to the sinking retail

selling prices of petroleum and gas.

However, the city's CPI still

represented a rise of 4.13% over the

same period last year.

5 out of the 11 baskets of goods,

which contribute to the calculation

of the capital's CPI data, saw a

decline in prices this month. Among

those goods, transport recorded

the strongest decrease at 3.54%. It

was followed by housing, water,

electricity & construction materials

(0.95%). Culture and entertainment

(0.22%), beverage and tobacco

(0.18%) and goods and other

services (0.06%).

Following the CPI downtrend, gold

prices in Dec plunged by 0.56%

over the previous month, while the

US dollar saw a month-on-month

decrease of 0.53%.

Meanwhile, the Hanoi Statistics

Dept also reported a drop of 0.23%

in the city's CPI for Dec against the

previous month. However, an

annual rise of 1.55% was recorded.

Only 2 baskets of goods posted a

monthly decrease. These were

transport, down by 2.56%, and

housing, declining by 1.38%.

Meanwhile, the remaining goods

recorded a rise in prices, including

posts and telecommunications

(0.68%), apparel and footwear

(0.54%) and culture, entertainment

and tourism (0.42%).

Low inflation leaves room for

interest rate

VNS - Inflation is expected to dip

lower next year, which could give

the central bank room to cutback

loan interest rates, according to the

Ministry of Planning and Investment

(MPI). Initially, the inflation rate was

projected to be 4% next year.

MPI said any price adjustments,

whether in case of products or

services in domains such as

healthcare, education, power and

petrol, must be carefully considered

to prevent any significant impact.

Similarly, any decision to adjust the

price of oil should be critically

deliberated upon, as well.

This followed the Electricity of Viet

Nam's proposal to raise power

tariffs by an average of 9.5%,

beginning this month.

According to the ministry, the input-

output analysis (I/O) revealed that

a 9.5% increase in power price

would raise the production cost by

0.55%. It would also cause the end-

consumption of households to

decline by 0.58% and GDP growth

rate to decrease by 0.45%.

In addition, cutting the loan interest

rate by 1% would increase the GDP

growth rate by 0.45% and cause

the inflation rate to decline by

0.76%.

An expert said that the loan interest

rates of Vietnam remain high,

putting immense pressure on

businesses. If loan interest rates are

not lowered, then it would be

difficult for the economy to attain

stable growth in medium and long

term.

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BANKS & FINANCE

Lending rises by 11.8% on track

to hit annual target

VNS - The total payment means by

December 19 rose by 15.65%, while

credit rose by 11.8% against late

last year, announced the State

Bank of VN (SBV).

These increases helped the banking

industry to meet its targets set

earlier this year, SBV disclosed

during the regular meeting held

yesterday. Moreover, deposits

during Dec still increased by 15.5%

despite the deposit interest rate cut

of 1.5-2 percentage points against

the same period last year. Of the

total deposits, the Vietnamese

dong deposits surged by 16.31%.

SBV Monetary Policy Department

Deputy Director Do Thi Nhung

announced that credit rose by

11.8% by Dec-19. Moreover, the

growth rate for the entire year is

estimated to reach approximately

13%. This value meets the 12-14%

annual credit growth target.

SBV disclosed that lending this year

had been positively oriented

towards production and trading,

especially in the five prioritised

industries of agriculture, exports,

supporting industries and SMEs, as

well as Hi-tech businesses.

SBV Credit Department Director

Nguyen Tien Dong revealed that

lending to the high-tech agriculture

and rural development industry by

the end of this year was estimated

to rise by 16%, while lending to SMEs

would surge by 14%.

The lending interest rate this year

has declined by approximately two

percentage points, which brings

the rate to the level attained during

the 2005-06 period.

Commercial banks have also cut

rates for previous loans. Currently,

loans with lending interest rates of

more than 15% and 13% account

for roughly 3.9% and 10.65% of loans

offered, respectively. These values

are lower compared with the 6.3%

and 19.72% recorded in Dec last

year.

SBV also officially targets a credit

growth rate of 13-15% for next year

in accordance with Govt's targets

for GDP growth, inflation control

and capital demand and supply.

VN Asset Management Company

Deputy General Director Doan Van

Thang announced during the

meeting that the company had

bought VND123 trillion ($5.774b) of

non-performing loans (NPLs) by

Dec-23, of which, VND4 trillion

($187.79m) had been resolved.

However, Thang shared that more

comprehensive measures and

closer co-ordination between

relevant agencies must be

adopted to better handle the NPLs

without the use of the state's

budget capital.

Credit expected to rise in 2015

with help from agriculture

sector

VNS - Credit growth next year is

targeted to reach 13–15%, State

Bank of Viet Nam's Credit

Department Director Nguyen Tien

Dong told.

Dong shared that the government

will encourage enterprises in the

agricultural and rural development

sector to increase their production

and expand their businesses to help

reach the target.

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BANKS & FINANCE

The lending demand in the sector is

expected to gain the highest

growth of 15% next year, he

disclosed.

The economic recovery next year is

forecast to remain slow due to the

lack of significant change seen in

lending demand. Experts advised

that apart from the support to be

obtained from the agricultural and

rural development industry, the

commercial banks will also have to

boost medium- and long-term

lending for the supporting and

engineering industries to meet the

annual growth target.

Many banks, such as Oceanbank,

TP Bank, Techcombank and VP

Bank, have thus far introduced

preferential lending packages,

which target supporting and

engineering firms.

The central bank has also oriented

commercial banks to boost

medium- and long-term lending. It

highlighted the immense

importance of sustainable

investment in the production and

business of firms, especially the

small- and medium-sized ones.

Tran Hoang Ngan, a member of the

National Assembly's Economic

Committee, also shared that it is

necessary to meet the medium-

and long-term loan requirements of

firms. This is said to be important for

the recovery of the business

community.

Firms disclosed that they continue

to face difficulties in accessing

medium- and long-term loans.

Vinavico Chairman Mai Hong Bang

revealed that many banks offered

short-term loans to his company.

However, his business needs

medium- and long-term loans to

invest in mining equipment.

SBV's Dong said that the central

bank had recently issued Circular

36 to boost medium- and long-term

lending. This circular states that

medium- and long-term loans must

account for some 36–37% of

commercial banks' total

outstanding loans

Stock market capitalization

tops $55b

Biz Hub - The Bank for Investment

and Development of VN has signed

a Memorandum of Understanding

with Japan's bank Hiroshima Shinkin

to support Japanese businesses

operating in VN.

The local bank will be the first

partner in VN and is expected to

provide banking products and

services to small- and medium-sized

enterprises that are customers of

the Japanese bank.

They will include payment accounts,

credit, wage payments,

consultancy on the trade and

investment environment in Viet

Nam, taxation, and recruitment.

The foreign bank plans to organise

a business mission to visit Viet Nam

in the coming March to explore

investment opportunities.

Stock market capitalization

tops $55b

VNS - The stock market's

capitalisation was worth about

$55b as of November 30.

The capitalisation value in the first

11 months increased 19% over the

same period last year, accounting

for 33% of GDP.

According to the State Securities

Commission, there are currently 841

listed companies and those that

have registered to list shares; almost

800 unlisted companies; 43 fund

management companies; and 83

securities firms.

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INVESTMENT

HCMC posts 94% FDI surge

VNS - Foreign direct investment

(FDI) into HCM City as of December

15 has reached US$3.21 billion, an

increase of 94 per cent compared

with the same period last year,

according to figures from HCM City

Department of Planning and

Investment.

The figure includes registered

capital of $2.84 billion for 414 new

FDI projects, nearly triple last year's

figure. Most of the investment was

in the manufacturing and real

estate sectors.

In addition, 133 operational

projects have received added

capital totalling $371.2 million, 53.5

per cent of the figure in 2013.

Samsung could double-down

on Vietnam by 2017

Thanh Nien News - Samsung has

offered to raise its investment in

Vietnam to US$20 billion in 2017 if

their existing business here goes

smoothly, according to a new

government report.

The South Korean giant has

become Vietnam’s biggest foreign

investor with over $12.6 billion in

registered capital.

According to a report prepared by

the Ministry of Investment and

Planning, the giant is considering a

major role in Vietnam's

infrastructure projects.

The company has signed an MOU

with the Ministry of Industry and

Trade about building a 1,200-

megawatt thermal power plant in

the central province of Ha Tinh.

It is expected to release a final

feasibility study on the $2.45 billion

project next year.

Samsung has also expressed

interest in the planned Long Thanh

Airport in Dong Nai Province,

according to a recent story

published in Thoi Bao Kinh Te Saigon

Online.

The government approved the

airport project over concerns about

its $7.8 billion price tag and plans to

use public funds to cover half the

cost and raise the rest through

government bonds and ODA loans.

Samsung said it wants to

participate in the construction of

terminals in addition to providing

ground services and operating

duty-free shops at the airport. At

present, the state-owned Airports

Corporation of Vietnam exercises

exclusive oversight for ground

services and stores at other airports.

Samsung is also negotiating with

the military-run Viettel, a dominant

telecommunication firm in Vietnam,

to develop a smart management

system for local bus and healthcare

services.

The company also plans to raise

$2.6-2.8 billion to turn a 300 hectare

lot in the south central province of

Khanh Hoa into one of the world's

ten biggest shipyards.

The ministry’s report asked the

government to order the Ministry of

Transport, the Ministry of Industry

and Trade and various provincial

governments to consider

Samsung’s offer.

The report said all the projects are

“suitable” for Vietnam’s

development plan.

Samsung invested $5.4 billion in

Vietnam this year--a sum equivalent

to 31 percent of all foreign direct

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INVESTMENT

investment during the first 11

months of the year.

In November, it secured a license

to invest $3 billion in its handset

business in the northern province of

Thai Nguyen.

The company received approval

for a $1.4 billion electronics factory

in Ho Chi Minh City’s hi-tech park in

September and a $1 billion screen

factory in the northern province of

Bac Ninh in June.

Japanese oil company signs

MoU with eye on refinery

VNS - A memorandum of

understanding was signed between

JX Nippon Oil & Energy Corp and

the Viet Nam National Petroleum

Group (Petrolimex) late last week in

Ha Noi.

The agreement paved the way for

co-operation between the two

parties in Viet Nam's oil sector, Dau

Tu (Investment) newspaper

reported.

JX Nippon Oil & Energy Corp,

Japan's largest oil firm, was

reportedly looking at the Nam Van

Phong oil refining petrochemical

complex project and the petrol

and oil retail market.

Nguyen Van Khanh, a

representative from Petrolimex, was

quoted by the newspaper as

saying a month ago that JX Nippon

Oil and Energy Corp could become

a major partner of Petrolimex in the

Nam Van Phong project, and that

the negotiations were expected to

be concluded this year.

The Nam Van Phong refinery

project in the central Khanh Hoa

Province got a nod from the

government in 2008. It has an

estimated capital of US$4.4 billion

to $4.8 billion. Petrolimex was

assigned to set up the project and

call for investments.

The construction of the project was

initially scheduled to start in 2011,

and it was to become operational

at the end of 2013. However, the

project missed the deadline and

the total estimated capital was

hiked to $8 billion.

Currently, only the ongoing Nghi

Son oil refinery has foreign partners.

The government allowed foreign

partners to set up distribution only

after the plant was put into

operation, with the condition that

the minimum capital contribution

from the Vietnamese side was 51

per cent.

According to the newspaper,

Petrolimex could issue additional

shares to its foreign partner to

reduce the State's stake.

Petrolimex, with a charter capital of

VND10.7 trillion ($504.7 million),

operates under a joint stock

company model after launching an

IPO in July 2011, with the State

holding a 94.99 per cent stake.

Petrolimex's market share in the

petrol and oil market ranges

between 48 per cent and 55 per

cent.

In August, Reuters reported that JX

Nippon Oil & Energy Corp was

looking at building refineries and

petrol stations in Indonesia and Viet

Nam, seeing the two markets as the

most promising locations for

investment amid declining fuel

consumption at home.

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ENTERPRISES

Firms join first Vietbuild Home

expo in HCMC

VNS - Around 270 local and foreign

companies will showcase their

newest products and services at

Vietbuild Home 2014, to be held at

the Saigon Exhibition and

Convention Centre from December

27 to 31.

Focusing on interior and exterior

products and home appliances,

Vietbuild Home, the first of its kind in

HCM City, will feature nearly 900

booths displaying a wide range of

products including movable

partitions, metal ceilings, doors and

windows and accessories, paints,

handicrafts, wallpapers, bathroom

equipment, electronics, cooling

devices and wooden furniture.

Nguyen Dinh Hung, chairman of

the Vietbuild Construction

International Exhibition Organising

Corporation, said 20 per cent of

exhibitors were foreign firms from

Thailand, South Korea, Singapore,

the US, Malaysia, Japan, Italy and

Germany.

Demand for interior and exterior

furnishing items usually increased at

the year-end as people renovated

their houses to welcome Tet, said

Pham Van Bien, head of the event's

organisation board. Therefore, the

event provided a well-timed

opportunity for companies to

market their products and

consumers to seek home decor

goods.

Awards honour SMEs and

brand name developers

VOV - A presentation ceremony for

the biennial Vietnam National

Trademark Council (VNTC) awards

was held December 23 in Hanoi.

On hand to present the 63 awards

was Do Thang Hao, deputy minister

of the Ministry of Industry and Trade

(MoIT).

In his address, Hao remarked that

small and medium sized businesses

(SMEs) have been the foundation

for Vietnam’s economic

development and a major force

underpinning social stability.

He explained that the aim of the

awards programme is to promote

brand name and trademark

development of Vietnamese

businesses.

The honourees were selected

based on the soundness of their

operations and performances and

their commitment to the three

values of innovation, creativity and

entrepreneurship.

Hao stressed the importance of

expanding markets and increasing

the quality of products in the

context of the country’s deepening

regional and global integration.

A wide variety of business support

consultancies, conferences,

seminars, and training courses were

launched by the MoIT over the past

year to help raise business

awareness of the importance of

improving marketing capacity and

protecting product trademarks,

Hao said.

Hao praised the VNTC, the Ministry

of Industry and Trade (MoIT), and

the honourees for their initiatives

and dedication to promoting

Vietnam’s international image,

including the National Trademark

Programme and elevating the

Made-in-Vietnam trademark.

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MARKET & PRICE

City ensures supply of Tet

goods

VNS - Enterprises in HCMC have

completed plans to prepare goods

for the Tet holiday, which falls next

year on February 19.

Van Duc Muoi, general director of

Vissan Limited Company, which

processes and trades fresh and

frozen meat and meat-related

foods, told Viet Nam News that the

company had prepared 46,000

pigs, 2,000 cows and 4,000 tonnes

of processed food to serve

customers, 10% higher than the

previous Tet.

"There will be no price shock during

Tet," he said, adding that "we will

slash prices sharply on days near Tet

to stimulate consumption".

Many poultry and egg providers like

Ba Huan and Vinh Thanh Dat plan

to increase supply by 10-15% for Tet.

As for confectionery products, most

producers plan to increase supply

and offer many kinds at a wide

price range to meet varying tastes

and budgets of customers.

The Bien Hoa Confectionery

Corporation (Bibica) plans to supply

1,350 tonnes of confectionery and

chocolate for Tet, up 20% over the

previous year.

The Kinh Do Confectionery Joint

Stock Company has said it plans to

supply 5,000 tonnes of

confectionery for Tet, 500 tonnes

higher than last year's holiday

period.

Le Thi Thanh Lam, deputy general

director of Saigon Food Company,

said the company would supply the

market 550 tonnes of food, a year-

on-year increase of 5-10%.

Supermarkets have also increased

supply of essential goods to meet

demand in the run-up to Tet and

after Tet.

Saigon Co.op has increased supply

of essential goods by two to three

times compared to normal months

to ensure adequate supply during

the holiday. About 90,000 tonnes of

goods are expected to be supplied

via its chain in three months before,

during and after Tet, which is 15%

higher than last year's Tet.

Besides essential items sold at 10%

lower than the market price under

the city's price stabilisation

programme, Saigon Co.op, in

collaboration with suppliers, will

slash prices by 10-50% on thousands

of other items.

It also plans to organise at least 141

mobile sales trips to the city's

remote districts as well as industrial

parks and export processing zones

to serve buyers.

Similarity, Big C supermarket chain,

which expects a 15% increase in

demand, carried out purchasing

measures to ensure supply and

stable prices.

Besides preparing abundant

sources of confectionery, fruits,

home decor items, the supermarket

will have about 420 tonnes of fresh

meat to serve customers during the

holiday.

This year, it launched 17 kinds of gift

baskets and boxes at prices from

VND59,900 to VND1.7 million (from

$2.85 to $80).

Until the end of February, it is

offering a discount of up to 50% on

nearly 4,000 Tet products.

South Korean supermarket chain

Lotte Mart if also introducing

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MARKET & PRICE

various kinds of Tet gift baskets to

meet customers' demand.

It expects sales to go up by 25% for

gift baskets and 60% for meat, eggs,

banh chung (square glutinous rice

cakes), banh tet (cylindrical

glutinous rice cakes) and fruits and

vegetables.

Retailers plan to increase the

number of cashiers and other

activities to ensure convenience

and safety for customers during the

peak purchasing season.

HCMC office space market

remains stable: CBRE report

VNN - In the fourth quarter the HCM

City office buildings market has

remained stable with limited new

supply in grades A and B in both

the central business districts and

elsewhere, according to property

consultant CBRE.

The Government's success in

reducing inflation (and lending

rates), cutting back spending,

attracting foreign direct investment

and achieving reasonable GDP

growth of 5.6% have improved

market conditions, which in turn

have improved the confidence

and outlook of both established

businesses and new investors.

This demand in the market

combined with limited supply has

helped to stabilise rents and reduce

vacancy rates. In the fourth quarter

rents for both grades A and B have

been quite stable (0.1 percentage

points down from the previous

quarter).

In terms of vacancy rates, grade B

performed slightly better than

grade A as they declined by 3 and

1.8 percentage points from a year

earlier.

Net absorption in the quarter

improved significantly for both

grades A and B – by 59.8 pps and

31.7 pps – which the latter

continuing to perform better than

the former.

The five most active sectors were

banking, finance, insurance, drugs,

manufacturing and IT/technology

even as relocation for cost reasons

ceased to be a major driver.

Expansion and new leasing are

expected to drive the office market

next year given the economy is

improving and Viet Nam returns to

the radar screen of investors.

For small- to average-sized

occupiers, the market does still

provide some viable options, but for

occupiers seeking quality,

international standard, and

managed buildings in the central

business districts, limited new supply

will come from large scale, mixed-

use projects and from those

developed partly for owner

occupation.

The notable projects coming online

in 2015 include Vietcombank,

Viettel, and SSG.

So while construction can be seen

across the central business district,

the reality is that for large tenants

planning an occupancy solution,

the market will remain tight until the

end of 2014.

As a result rent levels will remain

stable at least until Q1 2015 when

the next wave of supply comes

online.

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LEGAL UPDATES

Reducing import duty rates on

some vehicles from Jan 1, 2015

VLO - Circular No. 173/2014/TT-

BTC dated November 14, 2014 of

the Ministry of Finance on adjusting

preferential import duty rates

applicable to some commodities in

the preferential import tariff issued

together with Circular

No. 164/2013/TT-BTC dated

November 15, 2013 of the Minister

of Finance to perform WTO

commitments in 2015.

The commodities on which import

duty rates are reduced in

accordance with this Circular (the

number in bracket is the previous

import duty rate) include:

- Fish of all kinds, HS 0303.19.00: 18%

(19%)

- Motor-homes, HS 8703.23.40: 64%

(67%)

- Motor cars of a cylinder capacity

exceeding 2,500 cc, HS 8703.23.94:

64% (67%)

- Four-wheel drive motor cars, HS

8703.24.51: 55% (59%)

- Motor cars of a cylinder capacity

exceeding 3,000 cc and other, HS

8703.24.59: 64% (67%)

- Motor-homes of a cylinder

capacity exceeding 3,000 cc, HS

8703.24.70: 64% (67%)

- Four-wheel drive motor cars, HS

8703.24.91: 55% (59%)

- Other motor cars, HS 8703.24.99:

64% (67%)

- Motor vehicles for the transport of

goods of G.V.W. not exceeding 5

tones, HS 8704.10.23: 56% (59%)

- Other motor cars, HS 8711.50.90:

40% (47%)

This Circular takes effect on January

1, 2015.

Law on amendments to tax

Laws

VLO - Law No. 71/2014/QH13 dated

November 26, 2014 of the National

Assembly on amendments to tax

Laws

This Law is to amend, supplement

05 taxes - related Laws, including:

1. Law on Enterprise Income Tax

No. 14/2008/QH12 , which has been

amended and supplemented by

Law No. 32/2013/QH13

2. Law on Personal Income Tax

No. 04/2007/QH12 , which has been

amended and supplemented by

Law No. 26/2012/QH13

3. Law on Value Added Tax

No. 13/2008/QH12 , which has been

amended and supplemented by

Law No.31/2013/QH13

4. Law on Royalty Taxes

No. 45/2009/QH12

5. Law on Tax Administration

No. 78/2006/QH11 , which has been

amended and supplemented by

Law No. 21/2012/QH13

Accordingly, there are some

notable changes such as: Annulling

the limit rate of 15% applicable to

such expenditures as for

advertisement, marketing,

reception, festivities, etc.; incomes

of the enterprises from farming,

breeding, processing of agriculture

and aquaculture products are

applicable to the tax rate of 15%;

Individual traders shall be

exempted from PIT if their incomes

are valued at VND 100 million or

less; In monthly and quarterly tax

declaration dossiers are not

required to enclose the Table of

purchase and sale invoices;

Interests on late payment of taxes

shall just apply the rate of

0.05%/day regardless of long or

short delayed time

This Law takes effect from January 1,

2015

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LEGAL UPDATES

1. To abolish some provisions on

exchange rate upon the

determination of revenue,

expenditure, taxed price, taxed

income, taxable income and tax

payment to State budget provided

at:

a) Article 8 and Clause 3 Article 9 of

Law on Enterprise Income Tax

No. 14/2008/QH12 , which has been

amended and supplemented by

Law No. 32/2013/QH13;

b) Clause 1 Article 6 of Law on

Personal Income Tax

No. 04/2007/QH12 , which has been

amended and supplemented by

Law No. 26/2012/QH13;

c) Clause 3 Article 7 of Law on

Value Added Tax

No. 13/2008/QH12 , which has been

amended and supplemented by

Law No. 31/2013/QH13;

d) Article 6 of Law in Excise Tax

No. 27/2008/QH12 ;

dd) Clause 3 Article 9 and Article 14

of Law on Import – Export Duties

No. 45/2005/QH11 ;

e) Clause 4 Article 86 of Customs

Law No. 54/2014/QH13 .

2. To abolish Point c Clause 1 Article

49 of Law on Tax Administration

No. 78/2006/QH11 , which has been

amended and supplemented by

Law No. 21/2012/QH13.

3. To abolish provisions related to

tax determination towards

individual traders specified in

Clause 1 Article 19, Clause 1 Article

20 and Clause 1 Article 21 of Law

on Personal Income Tax

No. 04/2007/QH12 , which has been

amended and supplemented by

Law No. 26/2012/QH13

Regarding tax on differences

resulted from the market price

– based capital contribution

VLO - Dispatch No. 16200/BTC-

TCT dated November 6, 2014 of the

Ministry of Finance on conducting

cost-accounting and the tax policy

for the activity of capital

contribution in enterprises.

The document is to guide the

determination of tax on capital

transfer in the case limited liability

companies adding capital and

new members with the condition

that the new members must pay an

amount of money (market price)

higher than par value of the

actually contributed capital

For example, a limited liability

company has two members (X and

Y) with the charter capital of VND

100 billion. The company is going to

increase the charter capital to VND

130 billion by adding new member

Z who shall contribute VND 30 billion.

However, the condition on which Z

must comply is that Z must

contribute VND 40 billion for

possessing the capital ratio

equivalent to only VND 30 billion.

Accordingly, the difference of VND

10 billion (40 – 30) shall be taxed or

exempted from capital transfer tax

under this Dispatch as follows:

- If the difference of VND 10 billion is

regarded as the common

possession of the enterprise, it shall

be accounted into the capital

account 4118 and shall not be

taxed

- In contrast, if it is regarded as

private possession and divided to X

and Y, each member receiving this

difference shall be liable to capital

transfer tax (if the member is an

individual) or account it into EIT –

liable income (if the member is an

organization)

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SBV to support high-tech

agriculture

VNS - SBV's An Giang branch will

give VND3 trillion ($142.8m) to high-

tech projects in agriculture in the

southern An Giang province.

Announcing this in a meeting here

on Dec-17, the bank's branch

director Le Trong Nghia said that

the fund will be available for the

owners of high-tech agricultural

projects, as approved by the

provincial leaders.

The borrowers will enjoy a maximum

interest rate of 7% on short-term

loans and 10.5% per year on

medium-term and long-term loans.

Priority will be given to owners who

are provided training in applying

advanced technology in

agriculture.

Phan Van Sau, secretary of the An

Giang provincial party committee,

lauded the contribution that the

bank has made to its agricultural

and rural development sector.

An Giang has focused on

developing 8 groups of farm

produce since 2012, including rice,

vegetables, fisheries and fruits. The

province has 22,200ha of large

fields for rice cultivation and 35ha

for planting medicinal herbs.

Farmers earn VND25 million ($1,190)

per ha of medicinal herbs and

more than VND200 million ($9,523)

per ha of banana trees.

Vietnam tire market set to

grow at over 8% during 2014-

2019: report

VIR - The Vietnamese tire market is

projected to have a compound

annual growth rate of more than

eight percent during 2014-2019, a

global market research firm said in

its latest report.

The tire market in Vietnam is

expected to be driven by

prominent factors including

growing automobile sales, a rising

automobile fleet, favorable

government policies and increasing

foreign investments in the

automotive sector, TechSci

Research said Friday, citing findings

from its “Vietnam Tire Market

Forecast & Opportunities, 2019.”

Vietnam is “emerging as a major

consumer of tire in Asia-Pacific on

account of significant rubber

resources and growing motorization

level,” the report stated.

The “Vietnam Tire Market Forecast

& Opportunities, 2019” has

evaluated the future growth

potential of the tire market in

Vietnam and provides statistics and

information on market structure,

exports and future growth potential,

according to TechSci Research.

“The report is intended to provide

cutting-edge market intelligence

and help decision makers in taking

sound investment evaluation…[It]

also identifies and analyzes the

emerging trends along with

essential drivers, challenges and

opportunities available in the tire

market in Vietnam,” the company

said in a press release.

Vietnam is the third largest rubber

producing nation worldwide,

TechSci said, citing the Association

of Natural Rubber Producing

Countries.

“This, in turn, provides considerable

opportunities to tire manufacturers

to increase production capacities

and establish new manufacturing

plants in Vietnam,” the report reads.

In 2013, the two-wheeler tire

segment dominated the

Vietnamese tire market with a

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majority share, followed by the

passenger car and commercial

vehicle & OTR tire segments,

according to the report.

OTR, or off the road, tires include

tires for construction vehicles such

as wheel loaders, backhoes,

graders, trenchers and large mining

trucks.

Vietnam mostly imports automobile

tires from countries such as Thailand,

Indonesia, China and Japan.

Thailand remained the largest

exporter of tires to Vietnam in 2013,

followed by Japan, China and

Indonesia.

These countries cumulatively

accounted for around 72% of the

total tire imports in Vietnam in the

same year.

Tires produced in Vietnam,

meanwhile, are shipped to

countries like the U.S., Malaysia,

Saudi Arabia and Brazil, among

others.

In Vietnam, HCMC, the Mekong

Delta city of Can Tho and Bien Hoa,

the capital city of the southern

province of Dong Nai, form a

dominating region for tire sales,

which makes up some 41% of the

total sales volume in the country,

according to Karan Chechi,

research director with TechSci

Research.

Bridgestone, Michelin and DRC are

the top tire brands in Vietnam, and

these “are expected to lead the

market during the forecast period

in spite of competition from other

players, due to their high quality

and brand availability”.

TechSci Research is a global market

research and consulting company

which provides research-based

consulting solutions to its customers

worldwide, spanning a range of

verticals.

The company has offices in

Canada, India and the UK.

Rouble depreciation affects

Vietnamese market

VNN - Analysts predicted that

imports from Russia will increase

sharply since Russia-made and

Russian-sourced products have

become cheaper.

Meanwhile, Vietnam’s travel

industry has suffered from a lower

number of Russian travelers.

Nguyen Lan Anh, the owner of a

food shop specializing in distributing

Russian products, said sales have

increased sharply in recent days

because most Russian products are

getting cheaper.

“One kilo of sunflower seed is now

priced at VND300,000 instead of

VND340,000, while one kilo of

almond chocolate is VND350,000

instead of VND390,000,” she said.

Hanh is pleased about the

prosperous business, saying that

demand for Russian dried food

would be higher from now to Tet.

“The cheap rouble has made

Russian products cheaper. This is

really good news for Vietnamese

consumers,” she said.

The owner of a wine shop has also

confirmed that Russian wine

products have been selling very

well. “The price has dropped from

VND900,000 to VND750,000 per

bottle,” he said.

“I sold 80 wine bottles in just four to

five days,” he added.

“Vietnamese merchants are getting

big benefits from the rouble

depreciation,” Lan Anh explained.

“In mid-2014, one US dollar was

converted for 35 roubles only, but

now we can get 80 rouble for just

one dollar.”

Meanwhile, the owner of the wine

shop said Vietnamese businesses

can make “double profits” if they

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buy Russian products in Russia and

make payments in US dollars.

“The product prices have not been

adjusted in Russia yet. Therefore,

you can expect a profit of 20-40

percent if buying products now.

And you will make a profit once

more when you sell products in

Vietnam,” he said.

Vietnamese now not only hunt for

Russian food and essential goods,

but also high-value products as

watches, cameras and electronics.

Both Russian and foreign-made

products available in the Russian

market have attracted Vietnamese.

An analyst noted that a laptop in

Russia can be bought at about

$380. As such, if counting on service

fees, a product would be priced at

around VND10 million, or VND3-4

million cheaper than products of

the same kinds available in the

domestic market.

However, while importers are

happy about the rouble

depreciation, travel firms are

worried about the sharp fall in the

number of Russian travelers.

Nguyen Duc Tan, managing

director of Anex Tour Vietnam,

noted that the number of Russian

travelers to Vietnam has decreased

since late September.

The travel firm expected to receive

11,500 Russian travelers a month

and 120,000 Russian this year.

“Previously, there were some 200

bookings a day, or about 400

travelers, but the figure has

decreased by 60 percent,” he said.

Mobile devices market set for

holiday pickings

VNS - Most mobile device agents

and stores in HCMC expect to

achieve high turnover in December

and in early 2015, thanks to several

holidays and festivals, according to

market observers.

The prediction was based on

business results that the companies

have achieved in recent weeks,

particularly after Apple's new

iPhone 6 and iPhone 6 Plus

handsets were put on sale in mid-

November in the country.

In November, at FPT's shops, the

two iPhones 6 brought the highest

turnover, followed by iphone 5s,

Samsung Galaxy Note 4 and

Samsung Galaxy Note 3.

Other popular smartphones include

Asus, Sony, Oppo and Nokia.

Turnover for Thegioididong.com

and dienmay.com increased by

10% & 15% compared to October &

2013 figures, respectively.

A representative of

thegioididong.com, who declined

to be named, said that his

company's turnover rose because

of iPhone 6 and 6 Plus and

Samsung Galaxy Note 4 Gold sold

well as sales from promotions (12-24

per cent discounts) on many

smartphones such as Samsung

Grand 2, Nokia Lumia 1520 and HTC

Butterfly S.

In addition to the products, some

products such as the new Nokia 535

and Oppo R5 have also attracted

customers because of their

convenient features and

reasonable prices.

As for the PC tablet market,

Nguyen Hong Linh from FPT said the

Asus Fonepad FE170 with full 3G

telephony functionality was one of

the bestsellers last month among

PC tablets selling for less than VND3

million.

Five out of 10 kinds of Samsung's

tablets, three types of Apple iPads,

and several kinds of Asus tablet PCs

were also big earners.

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CONTACT

SEIKO IDEAS CORPORATION

Our services Training (Languages & Soft skills)

Consulting

Marketing

Translation - Interpretation

Address Floor 5th - A Chau Building

No.24 Linh Lang str., Ba Dinh dist., Hanoi, VN

Telephone +84-4-6275-5246 ; +84-4-6273-6989

Fax +84-4-6273-6988

Website www.seiko-ideas.com

Person in charge Nguyen Thi Quynh Tram (Ms.)

Telephone +84-4-6275-5246 ; +84-4-6273-6989 (Ext 805)

Mobile +84-91-4994-830

Email tram.nguyen@seiko-ideas.com