Some key changes in Law on Real Estate Business 2014
The Law on Real Estate Business 2014 which will take effect from 1 July 2015 includes certain important changes as follows:
Tax on transfer of shares with land use right origin
Under Vietnamese tax regulations, if:
- a company contributes land use right (LUR) to the charter capital of a company and receives shares or capital contribution in return (LUR-Originated Shares); and
- such company subsequently transfers the LUR-Originated Shares to a third party then the proceeds from the sale of LUR-Originated Shares may be treated as income from sale of real estate (instead of sale of securities) under the corporate income tax regulations. This may result in different tax implication and payment.
INVESTMENT PROCEDURES OF PROJECTS USING LAND
Foreign investors must go through a number of investment, land, construction, and environment procedures in order to operate a project using land (Investment Procedures) in Vietnam. The Investment Procedures have been provided in various legal instruments and involved a number of State licensing authorities. Given the lack of clarity at law, the Investment Procedures are applied differently and inconsistently by licensing authorities. Hopefully, this unpleasant practice would be changed when, for the first time, the Government introduced the unified process of all Investment Procedures in its Resolution 43 dated 6 June 2014 (Resolution 43).
This post is contributed by my colleague, Ha Thi Dzung.
New Vietnamese Construction Law 2014
The new Construction Law (Construction Law 2014) is probably one of the more important legislation passed by the National Assembly during the first section of this year. The Construction Law 2014 will take effect from 1 January 2015 and contain the following important points, among others: