Vietnam National Assembly Approves Amendments to 9 Laws: Major Changes to Financial Regulations

On November 29, the Vietnam National Assembly passed a new law introducing amendments and supplements to nine existing laws. Key changes to regulations on securities, accounting, independent audits, tax management, and personal income tax are expected to have a significant impact on Vietnam’s business and investment environment.

The 8th meeting session of Vietnam’s National Assembly has witnessed the passage of several pieces of legislation crucial to the future development of Vietnam’s rapidly modernizing economy. Besides the implementation of three major laws, including the Law on Value-added Tax, the Law on Personal Data Protection, and the Law on Electricity, the National Assembly has also promulgated a new law to amend nine other existing laws, including:

• Law on Securities;
• Accounting Law;
• Law on Independent Audit;
• State Budget Law;
• Law on Management and Use of Public Assets;
• Tax Management Law;
• Law on Personal Income Tax (PIT Law);
• Law on the National Reserves; and
• Law on Handling of Administrative Violations.

Initially, the amendment law only dealt with seven laws. The later extension included the PIT Law and the Law on Handling of Administrative Violations, showcasing the National Assembly’s attempt to put in place a more sufficient legal framework to incentivize and facilitate the swift development of Vietnam’s economy in the new era.

Key changes to Vietnam’s financial regulations

Law on Securities

According to the revision law, the National Assembly’s Standing Committee has directed competent agencies to amend regulations on two issues:

• Charter capital reports; and
• The participation of commercial banks as clearing members and payment of transactions for securities traded on the securities trading system.

The new provisions in the law are expected only to provide principles. The government and the Minister of Finance will be in charge of prescribing specific regulations to ensure feasibility.

Law on Independent Audit

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The Law on Independent Audit has been amended to enhance the state’s management of independent auditing. These changes aim to improve the quality of audits and expand the scope of mandatory audits. The amendments also emphasize professional ethics, the registration of audit firms, and the qualifications and requirements for practicing auditors.

Regarding penalties for violations of the Law on Independent Auditing, the National Assembly voiced agreement with draft provisions to ensure deterrence for auditing enterprises and auditors, especially given the current situation. Recently, the government has recorded a number of cases where auditing enterprises and auditors have seriously violated professional standards and professional ethics.

In completing the draft guiding Decree, it is recommended that the Government review, assess specific impacts, and have appropriate penalties for each act as suggested by the National Assembly.

Law on Accounting

The amendments to the Accounting Law focus on several key areas, including:

• Accounting standards;
• The requirement for documents to be translated into Vietnamese;
• Defining the first and last accounting periods for accounting units;
• Simplifying documentation;
• The use of electronic documents;
• Financial reporting;
• Decentralization to enhance state management capacity; and
• Protection of accountants’ rights and interests.

Law on State Budget

Amendments to the State Budget Law allow local budgets to finance infrastructure projects overseen by higher-level authorities. These changes also enable local budgets to provide financial assistance to other localities.

Additionally, the revisions clarify the regulations surrounding the use of state budgets for activities such as approving investment projects and managing public procurement.

Law on Tax Management

Changes to the Tax Management Law aim to tackle issues related to tax policies, enhance the efficiency of tax management, and promote transparency and fairness in taxation. Significant adjustments include widening the tax base for e-commerce and digital platforms.

Other amendments

Law on Management and Use of Public Assets 

The Law on the Management and Use of Public Assets has been revised to improve the efficiency of public asset management. The revisions clarify the processes for asset maintenance, procurement, administration, and disposal. In addition, the amendments introduce regulations regarding the use of public land and assets for economic activities.

Law on the National Reserves

The revised Law on the National Reserves now includes provisions allowing the Prime Minister to decide on the release of national reserve goods for foreign affairs purposes. Amendments also empower the Prime Minister to decide on national reserve procurement.

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