Vietnam: National Assembly passes law on supporting SMEs

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On 12 June, the National Assembly passed the Law on the support of small and medium-sized enterprises (SMEs). The measure will help to improve the quality of growth and change the nation’s economic growth model.

Under the new law, SMEs include micro-enterprises and small- and medium-sized enterprises whose average number of employees with social insurance is less than 200 in the year. These companies must also meet one of the following two criteria:

  • Total investment capital of a maximum of US $ 10 billion (US $ 4.4 million) and a total annual turnover of US $ 100 billion; or
  • Companies must be operating in the fields of agriculture, forestry, fisheries, industry, construction, trade and services.

SMEs that meet these requirements can be eligible for various incentives, such as assistance with credit access, support for tax and accounting or support for the acquisition of production areas, among others. In addition, the new measures provide for specific support measures for innovative start-up companies and SMEs involved in industrial interconnection clusters and value chains in the area of production and processing.

The law will take effect from January 1, 2018.

Mozambique provides a draft law that revises the tax rules for oil and mining operations

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The Council of Ministers in Mozambique, on 30th of May 2017, approved the proposed changes to the special tax regimes applicable to Petroleum and Mining Operations. The following step is for the draft bill to be sent to Parliament for approval and promulgation by the President. The legislation is expected to enter into force from 1st of January 2018.

The change refers to the tax stability regime initiated by the new law in 2014 in case of the tax regime for petroleum operations, where it describes that the tax stability period starts from the date of the petroleum rights assignment and for 10 years from the beginning of the commercial production. In addition, 50% reduction of the petroleum production tax applicable to products used for the development of the domestic industry has been removed. The change also states that tax constancy becomes effective with proof of realization of investment equivalent to US$100 million.

In case of Mining operations, the change states that tax stability becomes effective with proof of realization of investment equal to US$5 million and it does not apply to Surface Tax. The changes to the tax regime related to mining operations also include the increase of the mining production tax from 1.5% to 3% levied on sand and gravel. Additionally, 50% reduction of the mining production tax applicable to mining products used for the development of the domestic industry has been removed. Again, the Surface Tax regarding mining businesses for mineral water is 85,000 MT/per mining title instead of the 85,000 MT/ha.

Italy: Decree issued on urgent measures on tax matters

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The Council of Ministers of Italy enacted a Law Decree No.50 with an effort to meet the European Union (EU) demands of extra budget deficit cuts. The Decree was published in the Official Gazette on 24 April 2017 and provides urgent measures on tax matters.

The Decree excluded trademarks from the definition of intellectual property to comply with OECD Base Erosion and Profit Shifting (BEPS) Action 5 recommendations. Taxpayers wishing to take advantage of the patent box regime need to make an election by the end of the first financial year for which the regime is to apply. The election remains in force for five years-the year in which the application is filed and the following four financial years.

According to Decree the definition of normal value with the concept of arm’s length will be modified to be more aligned with Organisation for Economic Co-operation and Development (OECD) principles. The new definition formally endorses the OECD standard by providing that intercompany transactions are determined based on the conditions and prices that would have been agreed in comparable circumstances between independent parties acting at arm’s length.

Also, corresponding adjustments are now allowed for the conclusion of tax audits performed under international cooperation procedures, where the results are agreed by the tax authorities involved. Now it is also possible to obtain a corresponding adjustment through a specific application filed by an Italian taxpayer where a final adjustment has been made based on the arm’s-length principle in a country which has a double tax treaty in place with Italy that allows an acceptable level of information exchange.

Vietnam: VECITA requests procedure to review goods on e-commerce websites and applications

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The Vietnam E-Commerce and Information Technology Agency (“VECITA”) published a notice on 20 April 2017 on its web page aiming to promote the authentication of information on counterfeit, prohibited or restricted infringing goods on e-commerce websites.

Within the framework of the notice VECITA requests following procedures:

-Assessment, review and elimination of posting of infringing goods on e-commerce platforms;
-Procedures to prevent the posting and removal of information about infringing goods from e-commerce platforms (like blocking by keywords such as “falsification”, “super fake”, etc.); and
-Implementing procedures to handle requests and reports from brand owners or from regulatory authorities on posts on websites concerning infringing products or other illegal business practices.

The notice also provides that non-compliance with the requests for information from dealers and organizations having e-commerce platforms will result in penalties ranging from VND 40 million to VND 80 million in accordance with Article 83 of Decree 124/2015/ND-CP which regulating penalties for administrative violations in commercial activities, production and trading in counterfeit and banned goods, and protection of consumer rights.

Nigeria: Electronic tax clearance certificate expected to be introduced soon

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The Federal Inland Revenue Service (FIRS) declares it will soon announce electronic Tax Clearance Certificate (TCC) system to assist reduce fraudulent certificates. The implementation of the e-TCC verification system had reached an advanced stage, adding that it was undergoing user’s acceptance test before deployment to production. It will provide an e-repository of all TCCs issued by FIRS. It automatically sends Tax Clearance Certificates to the emails of taxpayers and also enables them to request for and print their TCCs online. The FIRS also stated that the service recently commenced modalities for implementation of robust VAT automation device for power, insurance, financial services, e-commerce, telecommunications, and oil and gas sectors.

UK: New type of limited partnership

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On 6 April 2017, new legislation came into force that introduces a new type of limited partnership. The Order introduces private fund limited partnerships (PFLPs) and amends the 1907 Act, which applies to PFLPs and partners in PFLPs.

New and existing private investment schemes can be structured as limited partnerships. To register as a new PFLP, use Form LP7. An existing limited partnership applying for designation as a PFLP should use Form LP8. Some changes have also been made to the existing forms LP5 and LP6. All new and amended LP forms are available to download.

Pakistan: Publishes guidelines for facilitating foreign investors

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On 1 April 2017, Pakistan Government has issued guidelines to the administrative heads of divisions, attached departments and autonomous bodies to facilitate domestic and foreign investment and the setting up of and running businesses in Pakistan.

According to a statement, the prime minister directed all federal ministries and departments concerned to prepare a comprehensive code of procedures, which will be followed by applicants and investors for the licence, sanction or permission for investment or setting up business in the country. The prime minister said that all such processes and transactions should be identified to streamline certifications, approvals, licences, permits or similar instruments.

The prime minister further said the procedure should be clearly laid down so that investors do not face hindrances due to lack of information. Specific time-frames should be followed to while processing the applications and the applicants should be informed at each stage of the process.