EuroCham publishes Whitebook

The Whitebook provides a run-down on issues that need resolving

The publication is aimed to summarise key issues affecting the business climate for European companies in Vietnam. The Whitebook spans key sectors for EuroCham’s 800 members, including agricultural business and food safety, banking and finance, fast moving consumer goods, information technology as well as tourism and hospitality.

Over the last 12 months

EuroCham has welcomed efforts and reforms that have been initiated by the Vietnamese government. Yet the organisation believes more can be done to further realise investment and trade in Vietnam.

European companies still face challenges in doing business in Vietnam. The main concerns and recommendations expressed by the European business community related to the EU-Vietnam Free Trade Agreement, education and training, taxation, intellectual property rights, administrative requirements, implementation and enforcement of the legal framework and market access.

For example, in the Whitebook, the Taxation Sector Committee calls for the clarification of provisions relating to the VAT rate for export services, in particular the concept of ‘consumption outside Vietnam’.

Clarification should be also provided on the fact that upstream oil and gas (O&G) contractors who surrender their product sharing contracts without reaching commercial production are not subject to the VAT claw-back requirements that are applicable to general (non-O&G) companies that liquidate. Concerns are also raised about insufficient guidance available regarding the introduction in 2014 of anti-avoidance rules where tax treaty claims would be denied.

Corporate income tax again raised concerns amongst EuroCham members. For instance, the motorcycle sector requested to be allowed the tax incentive entitlement for investment expansion which was implemented during the period from January 1, 2009 to December 31, 2013, if all criteria for tax incentives are met and applied to investments implemented in other periods.

Also in the Whitebook, EuroCham’s Wine and Spirits Sector Committee reiterated its concern about the increase in special consumption tax, and instead recommended taxing products according to their alcohol content rather than their value.

“Our Whitebook is handed over at a time when Vietnam and Europe are making strong efforts to increase trade. It is offered as a resource manual and an effective tool to promote bilateral business. As with previous editions, we hope that the Vietnamese government will find this year’s Whitebook useful when identifying and addressing current issues,” said EuroCham’s chairwoman Nicola Connolly.

“EuroCham is willing to work with the government to develop an efficient legal framework and a positive business environment for the benefit of Vietnam, Vietnamese citizens and European businesses,” she said.

In terms of overall global competitiveness, Vietnam ranked 68th out of 144 economies according to the 2014-2015 World Economic Forum Report, up two places on the previous year.