Regional Round-Up

CAMBODIA

Strengthening Business Registration Requirements and Trademark Protection for Media Operators

The Ministry of Commerce ("MOC") and the Ministry of Information ("MOINFO") have jointly issued an inter-ministerial Prakas No. 0256 MOC.BR.PrK dated 28 August 2020 on the Management of Business Registration, Protection of Trademark and Tradename for Information and Audio-visual Licenses ("Joint Prakas").

The Joint Prakas applies to all natural and legal persons that are engaged in providing information and audio-visual related services in Cambodia. It aims to regulate information and audio-visual operators ("media operators") in terms of compliance with business registration requirements and use of trademarks.

By registering their trademark and tradename, media operators will be assured that their business identities/names do not overlap with each other. The Joint Prakas also secures the legal benefits of media operators facing any unfair competition, and emphasises the prohibition on the use of trademarks and tradenames which may affect public order, social morality, national traditions and restricted trademarks.

To avail themselves of the above safeguards, new media operators must apply for business registration via the Business Registration Platform of MOC within two weeks from receipt of the in-principal approval from MOINFO. Existing media operators are required to apply for business registration within six months from receipt of the in-principal approval from MOINFO. Registration with MOC may take up to three working days.

National Consumer Protection Committee Established to Promote Consumer Protection and Good Faith Dealings in Commercial Transactions

The National Consumer Protection Committee ("NCPC") was established pursuant to the Law on Consumer Protection which was promulgated in November 2019. On 27 August 2020, almost ten months following the adoption of the Law on Consumer Protection, the Royal Government of Cambodia ("RGC") issued Sub-Decree No. 135 on the Organization and Functioning of the National Consumer Protection Committee ("Sub-Decree 135").

Sub-Decree 135 aims to promote the effective implementation of the Law on Consumer Protection and encourage good faith dealings in commercial transactions.

The key features of Sub-Decree 135 are set out below.

Composition of NCPC

NCPC is presided over by the Minister of the Ministry of Commerce ("MOC"). It is composed of the representatives of the relevant ministries as the Vice Presidents, and the members and the Director-General of the General Department of the Consumer Protection, Competition and Anti-counterfeit as the Secretary.

Each member has a five-year renewable tenure. Members of NCPC can be removed by a 2/3 majority vote of the members present at a meeting convened for this purpose, or if convicted of a criminal offence.

The total number of NCPC members shall not exceed 15 and such members shall be specifically appointed by the RGC.

Promotion of Consumer Protection and Good Faith Dealings in Commercial Transactions

To achieve the above-captioned aims, NCPC has the following duties:

1. Prepare and disseminate policies and strategies related to consumer protection;
2. Request RGC to examine and amend laws and regulations related to consumer protection, if necessary;
3. Request for advice or decisions from RGC regarding the implementation of the Law on Consumer Protection;
4. Examine and find solutions in the event of conflict between related regulations prepared by different regulators;
5. Provide consultations to consumer associations and organisations on issues related to consumer protection;
6. Examine and decide on rules and procedures necessary for the implementation of the Law on Consumer Protection;
7. Facilitate, cooperate, and enter into agreements with entities, competent regulators of relevant industries, or development partners related to consumer protection on national, regional and international levels;
8. Establish working groups to implement any necessary work or invite representatives of relevant ministries and entities to implement the Law on Consumer Protection;
9. Examine and provide solutions to petitions or cases initiated by NCPC itself in relation to consumer protection;
10. Issue decisions to disclose or re-disseminate information, and/or prohibit a person who violated the law from assuming management role, as well as determines, upon the request of competent regulators or the Director General of the General Department of the Consumer Protection, Competition, and Anti-counterfeit, other administrative punishments that are appropriate under the circumstances;
11. Provide opinions to the Minister of MOC for purposes of determining non-good faith acts and practices;
12. Decide to publish written warnings;
13. Provide consultations and cooperates with competent regulators to determine the content of the standard information for consumers;
14. Request RGC to set the schedule for the National Day of Consumer Protection; and
15. Execute other duties as the Prime Minister may direct.

Meetings and Decision Making

The members of NCPC must attend at least four regular meetings per year, and other meetings convened by NCPC.

The meeting quorum shall be more than half of the total members and the decision shall be made by majority of the members present at each meeting. The president of NCPC shall have the casting vote.

Financial Sources

The financial sources of NCPC include:

1. the budget of MOC;
2. funds from all legal sources and local and international cooperative financing; and
3. transitional fines and other service fees as may be determined by MOC and the Ministry of Economy and Finance.

Strengthening Measures for Enforcement of the Law on Telecommunications

To implement the regulations in the telecommunications sector more effectively, the Telecommunication Regulator of Cambodia ("TRC") issued Guideline No. 1606 dated 12 August 2020 on Strengthening Measures for Enforcement of the Law on Telecommunications ("Guideline"). The Guideline requires telecommunication operators ("Telecom Operators") to comply with certain obligations including the following:

1. Self-declare and pay the licence fees (allocated revenue) in a timely manner, and contribute 2% of the Telecom Operators’ gross annual revenue to the Universal Service Obligation Fund and 1% to the Capacity Building, Research and Development Fund, and other relevant profits to the Ministry of Posts and Telecommunications ("MPTC") in accordance with the Law on Telecommunications ("LoT") and relevant regulations. 
   The Telecom Operators shall further self-declare and pay the regulatory fees and/or provide a monthly report on telecommunication service figures to TRC no later than the tenth day of the month immediately following.
2. Immediately interconnect with and provide relevant figures to the Telecom and Information Technology Data Management Center ("TITDMC") by the end of December 2020 for any Telecom Operator who has failed to do so in accordance with Article 6 of the LoT and Sub-Decree on the Establishment of Data Management on Telecommunication Services and Information Technology.
3. Resolve with MPTC any differences between the figures that a Telecom Operator has self-declared for payment of allocated revenue and regulatory fees and the figures received by TITDMC. This may occur when Telecom Operators have unlawfully relaxed or are relaxing the flow of traffic and the size of their revenue. In the event that the Telecom Operator fails to rectify the problems, Articles 85 to 88 of the LoT on evasion of cash settlement obligations and exploitation over quantity of telecommunications services may be enforced.
4. Immediately cease any unlawful competition and provision of telecommunication services without quality or integrity through different promotion packages that confuse users. Disconnections or blockage of the flow of traffic of other Telecom Operators are also prohibited.
   All promotions or network disconnection of Telecom Operators shall first be approved by TRC pursuant to applicable regulations.
5. Strictly comply with Guideline No. 1252 dated 30 June 2020 of TRC for any amendment of the memorandum and articles of association, address, shareholder of the company, merger of the company, acquisition of the company or share, succession, pledge as security over rights conferred by relevant approvals. For more details, please refer to our Update titled "TRC Issues Guidelines Requiring Telecommunication Operators to Seek Approval Prior to Certain Activities".

From the effective date of this Guideline, 12 August 2020, Telecom Operators shall be held strictly responsible for any non-compliance with the Guideline.

For more information, click here to read our Legal Update.

Prakas No.346 to Impose Capital Gains Tax on Resident and Non-Resident Taxpayers to Take Effect on 1 January 2021

The Ministry of Economy and Finance ("MEF") has issued Prakas No.346 on Capital Gains Tax ("CGT") dated 1 April 2020 ("Prakas"). The Prakas was intended to be effective from 1 July 2020. However, the Director General of the General Department of Taxation ("GDT") has verbally announced that the implementation of this Prakas will be delayed to 1 January 2021.

The purpose of the Prakas is to impose tax on capital gains realised by both resident and non-resident taxpayers. Article 4 of the Prakas explicitly defines a resident taxpayer as being limited to a natural person resident taxpayer, whereas a non-resident taxpayer includes both a natural person and a legal entity non-resident taxpayer.

Key Features of the Prakas

Definitions of "capital asset" and "capital gains"

Under the Prakas, a capital asset refers to immovable property, leases, investment assets, goodwill, intellectual property, and foreign currency. Article 4 describes capital gains as the taxable income derived from the proceeds of sale or transfer of the capital asset less allowable expenses.

Article 6 sets out the instances in which capital gains are realised as follows:

1. When there is a sale, transfer or creation of possession rights for a capital asset;
2. When a registration is made with relevant competent authorities on the transfer of ownership or possession rights of a capital asset;
3. When there is a transfer of ownership or possession rights of a capital asset through a final and binding court judgment.

Two methods of calculating capital gains for the purpose of determining CGT

Where the capital asset is an immovable property, Article 8 provides two methods to calculate the capital gains for the purpose of CGT as follows:

1. Fixed percentage cost method – A taxpayer can deduct 80% of the sale/transfer proceeds as the assumed total cost of such immovable property.
2. Actual cost method – Actual expenses incurred pertaining to the immovable property and evidenced by proper supporting documents including invoices, receipts, agreements are allowed as deductible expenses.

For a capital asset other than immovable property, only the actual cost method is allowed for the purpose of capital gains calculation.

The calculation of capital gains or losses of a capital asset is treated separately. When the actual cost method is used and the actual expenses incurred are greater than the sale/transfer proceeds, the surplus is not allowed to be claimed as a refund or used to set off against the capital gains of another capital asset.

CGT is taxable at the rate of 20% pursuant to Article 10. 

Consequences of failure to pay CGT

The taxpayer is required to file a prescribed tax return and pay the relevant CGT at the tax office within three months upon the realisation of the capital gains.

It is important to note that Article 17 emphasises that a failure to pay the relevant CGT shall render the transfer of the ownership or possession right over a capital asset legally incomplete.

Exempt transactions

CGT is exempted on the sale/transfer of certain properties and rights including the following:

1. Property owned by a governmental institution;
2. Property owned by a diplomatic mission, foreign consulate, international organisation or technical cooperation agency of other governments;
3. The residence which is the principal place of residence of a taxpayer for at least five years prior to the sale/transfer; and
4. Properties sold or transferred for the public interest in accordance with the Law on Expropriation.

CGT with respect to capital gains realised from overseas assets

In relation to capital gains realised from an overseas asset, the resident taxpayer is required to pay CGT to the GDT only with respect to the difference between the lower amount of CGT paid overseas and the CGT calculated in accordance with this Prakas.

Guidance to Implementation relating to other capital assets

It is expected that the GDT would issue implementation guidance before the Prakas comes into operation on 1 January 2021, to cover in more detail other capital assets including the sale of shares in private or non-listed entities or the sale of foreign currency. We will provide a further Update when there is a new release on CGT from the GDT.

For more information, click here to read our Legal Update.

Law on Mutual Legal Assistance in Criminal Sector

The Law on Mutual Legal Assistance ("Law") was promulgated on 27 June 2020. The Law sets out the requirements and procedures for Cambodian authorities to process legal assistance requests in the criminal sector from other nations. The assistance provided under the Law can be in the form of freezing, retention, or confiscation of assets related to criminal activities. The Law applies where there is no pre-existing agreement on the matter.

Any pre-existing agreements (including extradition treaties) between Cambodia and other nations shall supersede the Law with regard to the legal assistance provided between the related nations. However, all internal procedures with regard to any such legal assistance shall be governed by the Law regardless of the existence of any separate agreements unless otherwise stated under any such pre-existing international agreements or as otherwise stated under any other laws of Cambodia. Among other things, the law stipulates that Cambodia’s assistance is extended on the basis of reciprocity. The Ministry of Justice is the central authority that is responsible for any formal communication with respect to providing mutual legal assistance.

The legal assistance provided under this law is limited to the following:

1. collection of evidence and testimony;
2. searches and retention;
3. presentation of evidence in court;
4. disclosure of information under the purview of Cambodia;
5. liaising on court documents;
6. transfer of detained persons for evidence discovery;
7. location identification;
8. asset identification;
9. execution of requested freeze, retention, or confiscation of assets; and
10. confiscation of evidentiary equipment from financial institutions.

Based on the Law, a request for legal assistance must be refused where: (i) it interferes with national sovereignty, national security, or public order/interest, (ii) the matter involves a political or military crime; (iii) it is discriminatory in nature; or (iv) it may lead to torture. A request for legal assistance may be refused where: (i) the underlying charge is not a crime in Cambodia in cases where the act has taken place in Cambodia’s territory; (ii) the assistance would overburden Cambodia’s resources; (iii) the assistance would adversely affect any ongoing criminal investigation or procedures in Cambodia; or (iv) there are any other obvious reasons for refusing legal assistance.

CHINA

New Regulations of Shenzhen Court of International Arbitration

The Standing Committee of the People's Congress of Shenzhen City has passed its new Regulations on the Shenzhen Court of International Arbitration ("SCIA") ("SCIA Regulations"), which took effect from 1 October 2020.

The SCIA Regulations reflect SCIA's responses to some long-standing issues in Chinese arbitral practice. It marks a significant step of SCIA towards aligning itself with international arbitration practice. Firstly, SCIA will adopt a corporate governance mechanism where a Board of Directors shall be constituted to undertake the decision-making and supervisory functions with respect to SCIA. At least one third of the Directors will be from outside of mainland China. Secondly, at least one third of SCIA's arbitrators shall come from outside of mainland China. Thirdly, ad hoc arbitration will be permitted in Shenzhen. Lastly, the parties are free to choose the seat and the governing law of arbitration. This potentially opens the door for purely domestic arbitrations to be conducted in accordance with a foreign law, but its exact scope will need to be tested before the Chinese courts.

China Releases Regulations on Unreliable Entity List

On 19 September 2020, the Ministry of Commerce of the People's Republic of China ("MOFCOM") published the Regulations on Unreliable Entity List (不可靠实体清单规定, "UEL Regulations"), which took effect on the same day. Under the UEL Regulations, foreign entities (which include enterprises, other organisations or individuals) would be listed as "Unreliable Entities" if they (i) endanger China's national interests of sovereignty, security, or development, or (ii) suspend normal transactions with Chinese enterprises, other organisations or individuals in violation of normal market transaction principles or adopt discriminatory measures against Chinese companies, other organisations, or individuals in serious violation of their lawful rights. During the investigation, the foreign entity will have opportunities to state and defend its case.

If a foreign entity is included in the Unreliable Entity List, the publicly available decision will alert the public to the risks of conducting transactions with such an entity, and may (or may not) specify a time limit (grace period) for the foreign entity to rectify its actions. In addition, such a foreign entity may be subject to one or more of the following countermeasures:

1. restrictions or prohibitions on engaging in China-related import and export;
2. restrictions or prohibitions on investing in China;
3. restrictions or prohibitions on the entry of its relevant personnel or transportation vehicles into China;
4. restriction or cancellation of its relevant personnel's work permits, stay or residence in China;
5. imposition of a fine; and/or
6. any other necessary measures.

In its 20 September 2020 press release, MOFCOM highlighted that the UEL Regulations are not intended to shift the Chinese government's position of upholding multilateralism and the opening up and protection of legitimate interests of foreign investors. Rather, China is committed to further opening up and optimising the business environment. Nevertheless, foreign entities should pay attention to whether their conduct may violate the guidelines set forth in the UEL Regulations. PRC entities should also find out, prior to entering into any transaction, whether their foreign transaction counterparties are under investigation for inclusion or have been included in the Unreliable Entity List.

China Adjusts Catalogue of Technologies Prohibited or Restricted from Export

On 28 August 2020, the PRC Ministry of Commerce ("MOFCOM") and the PRC Ministry of Science and Technology jointly released the Amendment to the Catalogue of Technologies Prohibited or Restricted from Export of the PRC (中国禁止出口限制出口技术目录, the "Catalogue") ("2020 Amendment"). This is the first revision of the Catalogue in more than a decade, which had last been updated in 2008.

Compared with the 2008 version of the Catalogue, the 2020 Amendment involves 53 items, among which (i) four items prohibited from export and five items restricted from export have been deleted; (ii) the controlling points and technical parameters of 21 items have been revised; and (iii) most notably, 23 items restricted from export have been added. According to the Regulations on the Administration of the Import and Export of Technology of PRC (中华人民共和国技术进出口管理条例), the export of technologies that are restricted under the Catalogue will require governmental approvals and permits.

According to MOFCOM, the 2020 Amendment is aimed at (i) improving technology export management; (ii) promoting developments in science and technology; (iii) strengthening foreign economic and technological cooperation; and (iv) safeguarding China's national economic security.

While the long-term implications of the 2020 Amendment regarding technology and intellectual property transactions are yet to be assessed, it is widely believed that the issuance of the 2020 Amendment has already complicated ByteDance's potential sale or restructuring of its TikTok products outside China, as certain technologies of TikTok may be captured within the 23 newly-added restricted technology items in the 2020 Amendment. The 2020 Amendment to the Catalogue also signals China's intention to enhance the protection of its emerging technologies for both national security and strategic importance, especially during this special period with growing tensions between China and the United States over trade and technology.

China Releases Data Security Law (Draft for Public Comments)

On 3 July  2020, the Standing Committee of the People's Republic of China's ("PRC") National People's Congress released the first draft of the Data Security Law for public comments ("Draft Data Security Law") which was published following its first reading by the Standing Committee of the National People's Congress. The Draft Data Security Law consists of 51 articles that span seven chapters: General Provisions, Data Security and Development, Data Security System, Data Security Protection Obligations, Security and Release of Government Data, Legal Liabilities, and Miscellaneous.

It is worth noting that the Draft Data Security Law is intended to have broad applicability by way of the adoption of broad definitions of data and data activities and its extraterritorial effect. According to the Draft Data Security Law, data refers to any electronic or non-electronic record of information (Paragraph 1 of Article 3), and data activities refer to activities such as data collection, storage, processing, use, provision, transactions, or publication of data (Paragraph 2 of Article 3), both of which are broad enough to capture any form of data and data activities.

On the other hand, the Draft Data Security Law contains a number of provisions with extraterritorial reach and cross-border effect. The Draft Data Security Law is intended to be generally applicable to any data activities that take place in China (Paragraph 1 of Article 2); however, it also emphasises at the outset that any organisation or individual outside the territory of PRC will be held responsible for any of his data activities which harm the national security, public interests or legitimate rights and interests of the citizens and organisations of the PRC (Paragraph 2 of Article 2).

In addition, the Draft Data Security Law empowers the state to adopt countermeasures against countries that impose restrictive or discriminatory trade or investment safeguards in respect of data, technology of data development and use, and so on against China (Article 24). When foreign law enforcement agencies request access to data stored in China, the individual or entity concerned is required to first report to, and receive approval from, the relevant PRC government authorities before providing the requested data. However, where the PRC has concluded or entered into an international treaty or agreement with provisions on the access of foreign law enforcement agencies to domestic data, those provisions shall be followed (Article 33).

INDONESIA

Restorative Justice Gaining Support in AGO's New Regulation

A new regulation enacted by the Attorney General Office ("AGO") allows the discontinuation of prosecution based on restorative justice. While the concept of restorative justice is not new, it used to be the case that restorative justice only applies at the investigation stage. This regulation broadens its scope and in effect allows a perpetrator to avoid a criminal conviction.

Under the regulation, the dismissal of a prosecution based on restorative justice must meet certain conditions. These conditions include the requirement that the suspect is a first-time offender and the offence is punishable by a fine or imprisonment of fewer than five years. The suspect and the victim must also sign a settlement agreement. 

Restorative justice can only be invoked by AGO. Neither the suspect nor the victim can apply for restorative justice. In addition, the scope of restorative justice is relatively narrow. It does not apply to particular offences, including those against state security, public order and insults, drug offences, and environmental crimes.

Notification Procedure Simplified, and Asset Notifications Clarified

Following the issuance of the new merger regulation, the Indonesia Competition Commission or Komisi Pengawas Persaingan Usaha ("KPPU") held a public webinar to clarify various questions on asset acquisition notifications.

First, KPPU made it clear that certain asset acquisitions will not trigger the mandatory notification post-acquisition. These include assets acquisitions that (i) are below the threshold value; (ii) do not form part of the acquiring company's ordinary course of business; (iii) acquire assets for a specific use; and (iv) acquire assets that do not relate to the acquiring company's business activities.

Second, KPPU simplified the notification procedure for eligible transactions, which are those with no or minimum anti-competitive concerns.

KPPU stated that both topics would be included in the implementing guidelines for the merger regulation, which is currently being finalised by KPPU.

OJK Continues Tightening its Grip on Public Companies: New Rule on Affiliated Party and Conflict of Interest Transaction

Public companies entering an affiliated party transaction must now obtain approval from their independent shareholders. In addition, they must have an adequate procedure in place to compare the terms and conditions of the affiliated party transaction against an ordinary transaction, to ensure that the former is carried out based on generally accepted business principles and an arm's length basis.

The independent shareholders' approval requirement applies if (i) the value of the transaction is above the company's material transaction threshold; (ii) the transaction may affect the company's business activities; or (iii) it is ordered by Indonesia's Financial Services Authority or Otoritas Jasa Keuangan ("OJK"). Some transactions are exempted, including entering into a direct facility agreement with a bank or similar entity.

On conflict of interest transactions, OJK broadens its definition to mean any transaction between a public company or a controlled company with any party, either affiliated or non-affiliated, that contains a conflict of interest.

LAO PDR

Laos, Hungary Vow to Deepen Cooperative Relations

On 11 September 2020 during his official visit to Laos, the Hungarian Minister of Foreign Affairs and Trade, Mr. Péter Szijjártó, met with the Lao Minister of Foreign Affairs, Mr. Saleumxay Kommasith, to discuss economic cooperation between the two countries. Political ties between the two countries have been strengthened, enabling Hungarian companies to carry out investment projects in Laos with a value of almost US$200 million.

During the visit, the two Foreign Affairs Ministers agreed to launch aid schemes to help Hungarian companies invest some US$100 million in Laos under a "tied aid scheme" to enable these companies to gain access to market opportunities in Laos.

Investments also involve building hospitals, developing Laos' national statistics system, and digitising postal services.

During the visit, agreements on statistics and education cooperation were also signed. Pursuant to these agreements, 100 Lao students will be allowed to study in Hungary each year. 

Mr Szijjártó told the media that from the perspective of economic planning, it is very important to modernise Laos' statistics system to better serve the country's development needs. The digitalisation of Lao statistical agencies will take place under the framework of the tied aid program.

The two Ministers also appreciated the fruitful cooperation envisioned under the tied aid program, and discussed ways to extend cooperation in the areas of education, and finance and health. They touched on regional and international issues of mutual interest.

Foreign Nationals Now Permitted to Own Condominiums

On 12 August 2020, the revised Law on Land No. 70/NA dated 21 June 2019 ("Updated Law") was published in Laos' official electronic gazette. The Updated Law came into effect 15 days after its publication in the gazette. The Updated Law applies to individuals, legal entities, and organisations including aliens, stateless person, foreigners, foreign nationals of Lao ancestry and their organisations that reside and operate in the territory of Lao PDR.

Article 132 of the Updated Law, which covers the land use rights of condominiums, allows foreigners to purchase suites or units in condominiums with the same term as the lifespan of the building or condominium. The land use rights on the land on which the condominium is built still belongs to the legal entity that owns the land.

Foreigners can also have land use rights under land leases and concession agreements with Lao citizens and the Government. However, the land ownership rights are limited to 30 years if the land leases and concession agreements are executed with Lao citizens, and 50 years if executed with the Government. Such land leases and concession agreements may be renewed with the consent of the Government, the National Assembly or the provincial People's Council, in accordance with articles 117 and 120 of the Updated Law.

Under Article 132 of the Updated Law, a Lao citizen may own part of the land where the condominium is located, or may own the entirety of the land based on a feasibility study report which should be undertaken prior to the construction of the condominium. All units and suites in the condominium must be officially registered with the relevant department of the Ministry of Natural Resources and Environment.

MALAYSIA

Employees' Minimum Standards of Housing, Accommodations and Amenities Act 1990 Revised to Expand Coverage to All Employees and to Impose Other Additional Requirements

On 1 September 2020, the enforcement of the revised Employees' Minimum Standards of Housing, Accommodations and Amenities Act 1990 ("Act") began after the expiry of the 3-month grace period given by the Ministry of Human Resources. The Act, which previously only applied the minimum standards of accommodation to employees working on estates, has now been extended to all other employees in Peninsular Malaysia and the Federal Territory of Labuan.

The Act introduces a new Part IIIA that places obligations on employers and centralised accommodation providers to obtain a Certificate for Accommodation for any accommodation provided to employees. Since the official enforcement of the Act, new regulations applicable to accommodation provided under Part IIIA of the Act have been gazetted to:

1. limit the maximum rental that may be collected/deducted from the wages of employees to RM100;
2. set out the minimum requirements of rest areas, bedrooms, toilets and dining areas for different classes of buildings; and
3. specify basic amenities that shall not be shared among employees, for example, certain types of single beds, mattresses, and locked cupboards.

Amendment to Insolvency Act 1967 to Mitigate Financial Ramifications of COVID-19 and Provide Individuals with Additional Protection from Bankruptcy

On 25 August 2020, the Insolvency (Amendment) Bill 2020 ("Insolvency Bill") was passed with a simple majority vote in the Dewan Rakyat. The focus of the Insolvency Bill is to mitigate the financial ramifications of the COVID-19 pandemic and provide individuals with additional protection from the threat of bankruptcy, most significantly by increasing the minimum debt threshold for the presentation of a bankruptcy petition from RM50,000 to RM100,000.

While the amendments introduced are largely in line with the amendments introduced by the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Bill 2020, there are certain differences between the Bills which warrant specific attention – click here to read our Legal Update, which sets out the key differences between the Bills.

Sexual Harassment Also Includes Non-Physical Acts

The Industrial Court in Loganathan Maniam v Murphy Sarawak Oil Co Ltd [2020] 2 ILR 275 (Award No. 448 of 2020) highlighted that sexual harassment not only encompasses physical acts but also includes non-physical acts such as the use of terms of endearment and the giving of personal gifts or attention, particularly where they are unwanted and go on repeatedly. The Claimant was alleged to have committed numerous acts of sexual harassment toward his secretary including addressing her as "sayang" (which directly translates to 'dear' or 'love') and paying her unwelcomed attention by giving her personal gifts.

As a consequence of such conduct, the Industrial Court found the Claimant guilty of misconduct which warranted termination of his employment. The impact of the Industrial Court decision not only recognises that sexual harassment goes beyond just physical actions but emphasised that the use of terms of endearment, gifting of personal presents and the imposition of unwelcomed attention toward a colleague (particularly from superior to a subordinate) can be construed as sexual harassment. Additionally, unwelcomed behaviour which has the effect of offending, humiliating or intimidating another is also harassment, even if there were no express objections to such behaviour.

This case also raises the issue that behaviour that is perceived as acceptable in a certain context may not necessarily be appropriate to another who is from a different cultural background. It is therefore crucial that employers educate their employees to be sensitive to other cultures in the workplace. Although the perception is that non-physical sexual harassment may not be as harmful or damaging as physical sexual harassment, employers should be mindful of such conduct occurring in the workplace, and ensure that every employee is made properly aware about the organisation’s policies on sexual harassment.

MYANMAR

MOC Issues Trademark Registration Order No.63/2020 Directing Trademark Owners to Register Trademarks

On 28 August 2020, the Ministry of Commerce ("MOC") issued Order No. 63/2020 ("Order") directing all Trademark Owners to apply for trademark registration. A "Trademark Owner" is defined under Section 93(a) of the Trademark Law 2019 as an owner of a mark which is registered at the Office of the Registration of Deeds, or an owner of a mark which is not registered but is actually in use in the Myanmar market. The Order requires such Trademark Owners to apply for trademark registration starting from 1 October 2020 as the Government seeks to transition from the current First to Use System to a First to File System.

Under the Trademark Law, Trademark Owners, regardless of whether their marks had been previously registered under the old regime (i.e. by filing a declaration of ownership), are entitled to enjoy a right of priority for a period of time to register their marks for goods or services under the new registration system if the marks are actually in use in the Myanmar market. This period of time is now defined under the Order as starting from 1 October 2020 up to the official commencement filing date of all trademarks (such date to be announced by the Government). Trademark Owners may submit trademark registration applications from 1 October 2020 onwards, and such applications will be regarded as applications filed on the official commencement filing date once it has been announced by the Government.

The Trademark registration process can either be undertaken by service companies and law firms assisting Trademark Owners, or by Trademark Owners themselves by way of the online registration system as stipulated by the Department of Consumer Affairs of MOC. The application shall include the necessary supporting information and documents to show that the Trademark (i) has already been registered with the Deeds Registration Office ("DRO") (i.e. by the filing of a declaration of ownership), or (ii) is an unregistered trademark but which has been exclusively used by the applicant in the Myanmar market up to the date of the application. The relevant supporting documents include:

1. the declaration of ownership of the Trademark as registered at DRO (registered Trademarks);
2. a certified true copy of the registration certificate from DRO (registered Trademarks);
3. proof of a public announcement in a government newspaper (registered Trademarks);
4. proof of use in the Myanmar market (registered and unregistered Trademarks);
5. proof of advertisement in the context of a marketing or sales promotion (registered and unregistered Trademarks);
6. tax receipt or other receipt for expenses;
7. if the applicant is not the same as the trademark owner registered at DRO, proof of transfer of ownership or name change (registered Trademarks); and
8. any other documents as may be required by the Intellectual Property Division of MOC.

Union Tax Law of 2020 Takes Effect on 1 October 2020

The Union Parliament has enacted the 2020 Union Tax Law ("2020 UTL") clarifying tax rates and procedures concerning income tax, specific goods tax, and commercial tax. The law took effect on 1 October 2020, being the start of the new financial year in Myanmar. Some of the key features of the 2020 UTL are summarised as follow:

1. Gradual increase in Income Tax Amnesty for undisclosed income – The key feature of the 2020 UTL is the modification of the income tax amnesty for persons with undisclosed income. The tax amnesty, which was introduced in the 2019 Union Tax Law and intended to be granted for a year to encourage persons with undisclosed income to settle their tax liabilities, has been subject to a gradual increase in the 2020 UTL.
2. Specific Goods Tax ("SGT") – The 2020 UTL also increases the tax rates for cigarettes, alcohol, and wine. Additionally, the new law imposes an obligation for SGT to be calculated on the basis of landed cost.
3. Commercial Tax ("CT") – The 2020 UTL does not make any changes to the CT rates. In respect to exempted goods, it amends certain provisions, particularly removing creamer and milk substitute products not produced from dairy animals from exempted food products. Furthermore, the law clarifies that CT must be repaid if the goods are not imported within the prescribed timeframe and used domestically, in relation to goods imported under the Temporary Admission system and Drawback system.
4. Gemstone Tax and Income Tax – There are no changes to the Gemstone Tax, Corporate Income Tax, and Personal Income Tax made by the 2020 UTL.

E-Filing System and E-Payment Platforms for Taxpayers

The Internal Revenue Department of Myanmar ("IRD") introduced a pilot stage e-filing system for all taxpayers, officially posting the submission process on the official website on 8 September 2020. This system at this stage will enable taxpayers to submit relevant tax returns including those pertaining to Commercial Tax, Capital Gains Tax and Specific Goods Tax. E-filings for Personal Income Tax and Corporate Income Tax have yet to be introduced.

Under the e-filing system, the taxpayer will be required to register through the IRD website, following which he will receive an approval email from IRD upon confirmation. Once registered, the taxpayer can file tax returns online by providing the required information including the Taxpayer Identification Number, registered tax office, email and password.

The use of the e-filing system is not yet mandatory for all taxpayers, but IRD is encouraging its use to streamline filings amid COVID-19. This is also in line with the e-Payment System, the use of which became mandatory on 1 October 2020.

In terms of developments regarding the e-Payment System, IRD has expanded the available platforms for which payment can be made. These include m-Banking, e-banking, i-banking and mobile payment systems. These payment platforms are available to the taxpayers with a valid Taxpayer Identification Number.

Currently, online tax payments do not apply to Personal Income Tax. IRD will announce in due course the availability of the online Personal Income Tax payment system once the system is in place. 

E-Commerce Operation Guidelines (Draft)

A draft of the E-Commerce Operation Guidelines ("Guidelines") is being formulated by the Trade Department ("Department") of the Ministry of Commerce ("MOC"). The Guidelines seek to regulate and promote the development of e-commerce transactions as well as safeguard the interests and rights of consumers. It differentiates three categories of entities as follows:

1. Platform Operators ("PO") – entities that manage a virtual place or a cyberspace eligible for e-commerce operations to be conducted;
2. E-commerce Operators ("EO") – entities that sell goods or provide services to consumers by way of utilising a platform run by POs; and
3. Other Operators ("OO") – entities that sell goods or provide services to consumers through their own websites.

The Guidelines seek to establish certain regulations for these entities, and they are summarised as follows:

1. Licencing – For entities seeking to conduct e-commerce operations to acquire a business licence, and providing the licence holder with the opportunity to register voluntarily at the department to avail themselves of certain incentives;
2. PO duties – For POs to investigate whether restricted items are being sold on their platform, and to provide 60 days’ advance notice when they seek the closure of a certain platform;
3. EO conditions – For EOs to comply with key conditions, including but not limited to properly delivering goods, complying with existing laws and regulations, issuing e-invoices, etc.;
4. Contract – For an electronic contract to be entered into where e-commerce operations are being carried out;
5. Information disclosure – For EOs to provide transparent information on their businesses such as categories, quality and price of goods, payment-related information, and fund transfer conditions;
6. Data Protection – For EOs to respect the privacy of all consumers and to abide by applicable privacy laws;
7. ,Dispute Resolution – For injuries and damages arising out of e-commerce transactions to be appropriately redressed in accordance with the Consumer Protection Law of 2019; and
8. Existing Legislation – For existing legislation such as the Consumer Protection Law, Telecommunications Law, Electronic Transaction Law, and others to be applicable when conducting e-commerce operations.

The finalised Guidelines is expected to be issued later this year.

PHILIPPINES

OADR Recognises IPOPHL as the Philippines' Lead Mediator for IP Disputes

The Office for Alternative Dispute Resolution ("OADR") has certified the Intellectual Property Office of the Philippines ("IPOPHL") as the mediation service provider in the Philippines in the field of intellectual property ("IP"). OADR will endorse IPOPHL as the recommended mediation service provider for all IP cases before it.

OADR and IPOPHL agreed to conduct online seminars on the services of IPOPHL which include: (i) mandatory mediation; (ii) mediation outside litigation; and (iii) international mediation. 

OADR and IPOPHL will further execute a Memorandum of Agreement ("MOA") to formalise their partnership. The MOA is expected to be signed in October.

Anti-Red Tape Authority Releases Guidelines on the Issuance of Permits and Licenses under the "New Normal"

On 27 August 2020, the Anti-Red Tape Authority ("ARTA") issued Memorandum Circular No. 2020-06 to streamline the standards, measures, and procedures to be adopted by the various government agencies and local government units during the "New Normal". "New Normal" refers to the set of norms and standards for strengthening safety measures due to the pandemic. It is described by zero-contact measures and the availability of electronic platforms and mechanisms.

Some of the guidelines under this issuance include the reduction of requirements for permits, licenses, and authorisations where specified agencies are encouraged to remove unnecessary processes and procedures. The specified agencies are also now required to set up an online processing system for accepting applications for permits, licenses and clearances. Electronic versions of such documents shall be recognised with the same level of authority as that of a signed hard copy. In line with this, electronic signatures shall also be used in lieu of physical signatures. Government agencies are also required to establish a payment gateway to process digital payments (i.e. credit cards, debit cards or bank transfer), among others.

To minimise face-to-face interactions, ARTA also required the removal of meetings and interviews as indispensable requirements for the issuance of permits and licenses, among other measures, unless these are strictly necessary for complex or highly technical applications. In these situations, the agencies shall utilise videoconferencing platforms.

BIR Launches the Voluntary Assessment and Payment Program for Taxable Year 2018 under Certain Conditions

On 18 August 2020, the Bureau of Internal Revenue ("BIR") issued Revenue Regulations No. 21-2020 which introduced the Voluntary Assessment and Payment Program ("VAPP") for the collection of additional tax revenue. The VAPP is intended to mitigate the losses incurred during the COVID-19 situation and to incentivise taxpayers to voluntarily pay their taxes within the covered period in order to avail themselves of the privilege of immunity from audit and investigation.

The VAPP shall cover all internal revenue taxes covering the taxable year ending 31 December 2018, and fiscal year 2018 ending on 31July 2018 to 30 June 2019. These include estate tax, donor's tax, capital gains tax, creditable withholding tax, expanded withholding tax, and documentary stamp tax related to one-time transactions.

Taxpayers who, due to inadvertence or otherwise, erroneously paid taxes, failed to file tax returns or pay taxes may avail themselves of the benefits of VAPP, subject to the fulfilment of requirements and conditions imposed by the BIR. That said, those who (i) have already been issued a Final Assessment Notice, (ii) are under investigation as a result of verified information; (iii) have cases involving tax fraud and pending in the Department of Justice or in courts; and (iv) have pending cases involving tax evasion and other criminal offenses, cannot avail themselves of the VAPP. Qualified persons can avail themselves of the benefits of the VAPP until 31 December 2020, unless otherwise extended. An important condition is that the voluntary payment should be made in cash.

House Panel Approves Bill Imposing 12% VAT on Digital Transactions

The House of Representatives ("HoR") Committee on Ways and Means approved the Substitute Bill to House Bills No. 6765, 6944, 4531, and House Resolution No. 685, which aims to impose value-added tax ("VAT") on digital services. Digital services refers to any service that is delivered or subscribed over the internet or other electronic network, which cannot be obtained without the use of information technology. 

The Substitute Bill further provides that non-resident digital service providers are liable for assessing, collecting, and remitting VAT on the transaction that goes through their platforms.  Thus, they may claim creditable input tax. However, if they are not duly registered with the Bureau of Internal Revenue, payments to non-residents for services rendered in the country shall be subject to 12% withholding tax at the time of payment. Moreover, non-resident digital service providers are not eligible to avail of the tax credit mechanism in relation to VAT.

The Substitute Bill is currently being subjected to interpellations with the HoR Committee on Rules in preparation for the second reading.1 Afterwards, it will undergo readings and separate votings with the HoR and Senate. A bicameral conference committee may be formed in order to reconcile conflicting provisions in the HoR and Senate versions of the bill. Upon approval by both bodies, the final version of the Substitute Bill will be submitted to the President who may either veto or sign it into law.2

___________________________________________

1 See HoR – Committee on Rules, List of Primary Referred House Bills, available at http://congress.gov.ph/committees/search.php?id=0532&pg=primary#tab (last accessed on 1 October 2020).

2 See 1987 Constitution, Article VI, Section 26. The full details of the legislative process may be found at HoR – Legislative Process, available at http://www.congress.gov.ph/legisinfo/?v=process (last accessed on 1 October 2020).

BIR Issues Guidelines for the Institutionalisation of Transfer Pricing Auditing

The Bureau of Internal Revenue ("BIR") has recently released issuances in relation to cross-border and intra-firm transactions among related parties or associated enterprises, to further enforce BIR Revenue Regulation ("RR") No. 2-2013 on transfer pricing guidelines. The objective of BIR RR No. 2-2013 is to determine the appropriate revenues and taxable income of parties in controlled transactions, or those that involve the transfer of resources, services, or obligations among associated enterprises. 

On 8 July 2020, BIR issued BIR RR No. 19-2020 which prescribes the use of BIR Form No. 1709 or the Information Return on Related Party Transactions. BIR Form No. 1709 and its supporting documents shall form part of the required attachments to the Annual Income Tax Return. The taxpayer must properly disclose information on related party transactions. These include the following: (i) nature of the transactions and affected accounts; (ii) business overview of the ultimate parent company, if applicable; and (iii) the taxpayer's functional profile and the industry in which it operates.

Other supporting documents that may be attached to BIR Form No. 1709 include: (i) certified true copy of the relevant contracts or proof of transaction; (ii) withholding tax returns and the corresponding proof of payment of taxes withheld and remitted to BIR; (iii) proof of payment of foreign taxes or ruling duly issued by the foreign tax authority where the other party is a resident, which must be duly authenticated or apostilled; (iv) certified true copy of the advance pricing agreement, if applicable; and (v) any transfer pricing documentation.

On 29 July 2020, BIR issued BIR Revenue Memorandum Circular No. 76-2020 to provide clarifications of the requirements in relation to the filing of BIR Form No. 1709.

Failure to comply may subject the taxpayer to penalties prescribed by the Tax Code.

SINGAPORE

CCCS Price Transparency Guidelines for Suppliers to Take Effect on 1 November 2020

The Consumer Protection (Fair Trading) Act ("CPFTA") is a major pillar of Singapore's consumer protection framework. It provides consumers with legal safeguards against unfair practices, enables them to have recourse to civil remedies before the courts, and is administered by the Competition and Consumer Commission of Singapore ("CCCS"). Under the CPTFA, consumers have the statutory right to commence legal action against a supplier who engages in an unfair practice.

On 7 September 2020, CCCS published the Guidelines on Price Transparency ("Guidelines") to set out how CCCS will give effect to the CPFTA in relation to four pricing practices: drip pricing; price comparisons; discounts; and the use of the term "free". The Guidelines are founded on the principles that suppliers should not make false or misleading claims, and should be transparent and clear in their communication with consumers. The Guidelines were finalised by CCCS after considering the responses received from a public consultation on the draft Guidelines last year (see here for our Client Update on the draft Guidelines).

The Guidelines will come into effect on 1 November 2020 and apply to all suppliers, whether operating online or in physical stores. The Guidelines do not "absolve suppliers of obligations" under any other guidance from any sectoral regulators; where such guidance is more stringent that the Guidelines, then suppliers should follow the stricter approach. While the recommended practices in the Guidelines are not binding in themselves, they are illustrative of the approach that CCCS will take in enforcing the CPFTA, and businesses would do well to adhere to them.

For more information, click here to read our Legal Update.

Setting Aside Recognition of Foreign Bankruptcy Orders for Breach of Natural Justice

With the increasingly cross-border nature of insolvency proceedings, it is important to understand the framework for the recognition of foreign insolvency and bankruptcy orders, as well as the grounds on which recognition may be refused.

In Paulus Tannos v Heince Tombak Simanjuntak [2020] SGCA 85, the Singapore Court of Appeal (by a two to one majority) set aside the High Court's recognition of Indonesian bankruptcy orders on the ground of breach of natural justice. The Court of Appeal found that the appellants had not received due notice of the relevant bankruptcy proceedings, and that they were accordingly deprived of the opportunity to be heard.

The decision highlights the main principles of natural justice in enforcement and recognition proceedings. On a practical level, it demonstrates the evidence that should be produced in order to demonstrate compliance with the rules of natural justice. The evidential factors in this case included the following:

1. The courier service records showed that the service of notice had not been successful;
2. The party which had served notice of the bankruptcy proceedings did not submit evidence on whether service was properly effected; and
3. There was no evidence produced on whether the service of notice was proper under Indonesian law.

For more information, click here to read our Legal Update.

Recovery of Gambling Debts Incurred at Foreign Casino Disallowed by Singapore Court

The Singapore International Commercial Court ("SICC"), in The Star Entertainment QLD Ltd v Wong Yew Choy and another matter [2020] SGHC(I) 15, has reaffirmed that for public policy reasons, Singapore law does not allow for the recovery of gambling debts, other than in respect of gambling that is legally permitted under local statutes such as the Casino Control Act.

The case involved a claim by the Plaintiff ("The Star"), an Australian casino operator, against a Singaporean casino patron, Dr Wong, for gambling debts arising from purported losses in baccarat games played at The Star's casino in Queensland, Australia. SICC allowed Dr Wong's application to strike out the claim on the grounds that the sums were for gambling losses incurred by him, and as such, the claim fell afoul of section 5(2) of the Civil Law Act ("Act"), which provides that "No action shall be brought or maintained in the Court for recovering any sum of money or valuable thing alleged to be won upon any wager".

SICC rejected The Star's argument that the prohibition on recovery of gaming debts was inapplicable as the gaming took place in Queensland, where the gaming contract was valid and enforceable. SICC took the position that the words "No action shall be brought" in section 5(2) of the Act covered all actions irrespective of where the cause of action arose.

In the present case, SICC endorsed the Court of Appeal's observation in Poh Soon Kiat v Desert Palace Inc [2010] SLR 1129 that there was no indication that gambling per se was no longer contrary to the public interests of Singapore simply because two licensed casinos have now been allowed to operate in Singapore.

For more information, click here to read our Legal Update.

Singapore and China to Cooperate in the Field of Central Bank Digital Currency

As digital currencies continue to become more commonly used, central banks across the world have begun to explore the implementation of Central Bank Digital Currencies ("CBDC") to replace fiat cash. Major economies are already embarking on research and testing phases of the digitalisation process, highlighting the changing nature of payments.

Mr Ravi Menon, the Managing Director of the Monetary Authority of Singapore ("MAS"), speaking at a financial forum in Shanghai, discussed the intention for cooperation between Singapore and China in relation to CBDCs. China has drawn attention for its advanced progress in the development of its CBDC, and Singapore has also made substantial inroads in the exploration of blockchain-based CBDCs.

Digital payment is already a dominant form of transaction in China, where Alipay and WeChat Pay are used by much of the population, paving the way for further advancements in digital currency. China has reportedly launched a pilot programme of its CBDC, with the digital yuan being rolled out for testing in selected Chinese cities earlier this year. With this development, China is on track to become perhaps the first major economy to launch its CBDC.

It has also been reported that China is considering an East Asia digital currency scheme which would combine a basket of regional currencies such as the Japanese yen, South Korean won and Hong Kong dollar. This would further boost the strength of and support for CBDC development for currencies in the region.

In Singapore, the efforts towards the exploration and establishment of a CBDC have come under the umbrella of what is known as Project Ubin, which is a collaborative project with the industry to explore the use of blockchain and Distributed Ledger Technology for clearing and settlement of payments and securities. Project Ubin aims to help MAS gain a better understanding of the technology, benefits and issues through practical experimentation. Project Ubin has since concluded its fifth and final phase.

Economic cooperation between Singapore and China has been a key feature of the close relationship between the two countries. With the strengthening of regional currencies in the context of the world economy, further cooperation in the area of digital currencies would bolster each country's respective development efforts. In the long run, this would also benefit businesses which have commercial ties and activities spanning the two jurisdictions. Some of the main goals of the CBDC project would be to cut cross-border payment and settlement costs, reduce settlement time and ensure transaction security. Businesses could potentially utilise these benefits to enhance their time and cost efficiency.

For more information, click here to read our Legal Update.

Insolvency, Restructuring and Dissolution Act Comes into Operation on 30 July 2020

The Insolvency, Restructuring and Dissolution Act 2018 ("IRDA"), together with 48 pieces of subsidiary legislation, came into operation on 30 July 2020.

The IRDA is a significant piece of legislation and its implementation is set to effect major changes in the restructuring and insolvency regime in Singapore. Among other changes, the IRDA:

1. consolidates all personal and corporate insolvency and debt restructuring laws under one statute;
2. introduces new features to update and enhance the operation of the insolvency and restructuring framework, including (i) a restriction on the operation of ipso facto clauses; (ii) third-party funding for officeholder avoidance actions; and (iii) summary dissolution; and
3. establishes a licensing and regulatory regime for insolvency practitioners.

For more information, click here to read our Legal Update.

THAILAND

Amendment to Market Dominance Test under Thailand’s Competition Law

A new Notification of the Trade Competition Commission on Market Dominance repealing the 2018 Notification on this issue came into effect on 26 September 2020.

The new test of market dominance under this Notification is as follows:

1. where a business operator in any market has a market share of 50% or more and with sales volume of THB1 billion or more in the preceding year; or
2. where the first three business operators in any market have a combined market share of 75% or more in the preceding year.

The provision in (b) does not apply where any one operator has less than THB1 billion sales or less than 10% market share in the preceding year.

Amendments to the Civil Procedure Code Introducing Civil Mediation Before Litigation

On 8 September 2020, the Act amending the Civil Procedure Code (No.32) B.E. 2563 (2020) ("Act") was published in the Royal Gazette. The Act will come into force on 7 November 2020. The Act introduces a new legal provision which allows a party to civil proceedings to request in-court civil mediation even before a complaint is filed with the court. The parties are not required to pay court fees upon filing the petition requesting a pre-litigation mediation session, and are also not required to be accompanied by their lawyers to the mediation session. The mediation session will be conducted by a court-appointed mediator.

In the event that the parties are able to reach a mutual agreement/compromise and the court allows the parties to sign such agreement/compromise, the parties may request the court to render a judgement according to the settlement agreement. An appeal against the said judgment can only be made on limited grounds.

Further, it is also worth noting that if the limitation period for the claim in question (i) expires after the petition requesting the mediation is filed and the parties cannot reach a mutual agreement or compromise during the mediation, or (ii) will expire within sixty days from the date on which the mediation ceased without agreement from the parties, the prescription period will be extended for a further 60 days from the date on which the mediation ceased.

Bangkok Metropolitan Administration Extends the Deadline for Land and Building Tax Payments

Under the Land and Building Tax Act B.E. 2562 (2019) ("Land and Building Tax Act"), taxpayers are required to pay land and building tax within April of each year. However, on 11 December 2019, the Ministry of Interior issued an announcement to extend several timeframes under the Land and Building Act, including the deadline for the payment of land and building tax, from April 2020 until August 2020. On 28 August 2020, as a measure to prevent and suppress the spread of the COVID-19 pandemic, the Bangkok Governor issued the Notification of Bangkok Metropolitan Administration Re: Extension of the Period to comply with the Land and Building Tax Act B.E. 2562 (2019) ("Notification"). In essence, the Notification provides an additional two-month extension of the deadline for paying building and land tax from August 2020 until the end of October 2020.

Standards for Maintaining Security of Personal Data

On 21 May 2020, the Royal Decree Prescribing an Entity and Business in which the Data Controller is Exempted from the Personal Data Protection Act B.E. 2562 (2019) B.E. 2563 (2020) ("Royal Decree") was published in the Royal Gazette. The Royal Decree provides a one-year postponement of the effective date of key operative provisions of the Personal Data Protection Act B.E. 2562 (2019) for data controllers which are entities or businesses listed in the schedule attached to the Royal Decree, from 27 May 2020 to 31 May 2021. The listed entities or businesses include governmental agencies, foundations or associations, agricultural businesses, industrial businesses, commercial businesses, telecommunications business.

On 17 July 2020, the Ministry of Digital Economy and Society published the Notification of Ministry of Digital Economy and Society Re: Standards for Maintaining Security of Personal Data B.E. 2563 (2020) ("Notification") in the Royal Gazette. In essence, the Notification stipulates that data controllers who are entities or businesses listed in the schedule annexed to the Royal Decree are required to put in place security measures for personal data in accordance with the standards prescribed under the Notification, including the implementation of the administrative, technical and physical safeguards with regard to accessing and controlling the use of personal data. The Notification came into effect on 18 July 2020 and will remain in effect until 31 May 2021.

VIETNAM

New Decree No. 91/2020/ND-CP Against Spam Takes Effect on 1 October 2020

On 1 October 2020, Decree No. 91/2020/ND-CP on anti-spam text messages, emails and calls ("Decree 91"), which was issued on 14 August 2020, took effect. It replaces Decree No. 90/2008/ND-CP against spam which was enacted 12 years ago. Decree 91 was issued to take into account current advertising realities.  

Key changes are:

1. Unlike the former decree, Decree No. 91 now expressly captures phone calls within the scope of spam. "Spam calls" are now defined as advertising phone calls made without the prior consent of the recipient or in violation of the law.


2. Decree 91 introduces a "Do-Not-Call" registry and a blacklist of brand names developed and operated by the Authority of Information Security ("AIS") under the Ministry of Information and Communications.


3. Decree 91 introduces a "National Brand Name Management System". Developed and operated by AIS at tendinhdanh.ais.gov.vn, this system is intended to be used to manage and store brand names worldwide. It allows organisations and individuals to register the brand names that would be used for advertising via messages or calls. Advertisers may only send advertising messages or make advertising calls after they have registered their brand name in the system.

Corporate Income Tax Reduction

On 19 June 2020, the National Assembly voted to approve Resolution No. 116/2020/QH14 regarding the reduction in corporate income tax payable in 2020 by enterprises, cooperatives, public service providers and other organisations ("Resolution 116"). Resolution 116 came into operation on 3 August 2020. On 25 September 2020, the Government issued Decree No. 114/2020/ND-CP to implement Resolution 116.

Subjects that are eligible for the reduction in corporate income tax include: (i) enterprises established under Vietnamese law; (ii) organisations established under the Law on Cooperatives; (iii) public service providers; and (iv) other organisations established in accordance with Vietnamese law. These enterprises and organisations must earn income from business operations to be eligible for the reduction in corporate income tax.

Specifically, corporate income tax payable in 2020 shall be reduced by 30% for enterprises whose total revenue in 2020 does not exceed 200 billion VND.

EVFTA Comes into Force on 1 August 2020: Paving the Way for Greater Trade Between EU and Vietnam

The EU-Vietnam FTA ("EVFTA") came into effect on 1 August 2020.

The EVFTA is expected to pave the way for greater trade between the EU and Vietnam. Over a 10-year roadmap, it provides nearly 99% of the elimination of customs duties between the EU and Vietnam. Pursuant to the EVFTA, import taxes on nearly 100% of Vietnam exports to the EU will be eliminated. This is the highest level of commitment that a trading partner has ever given to Vietnam.

The EVFTA also provides for the liberalisation of certain service sectors or the relaxation of business restrictions for European investors – wider in scope than those laid out in the World Trade Organisation ("WTO") Commitments. For example, in the logistics sector, restrictions have been lifted to allow for 70% foreign ownership in transport services. For retail trading services, there will be a gradual phasing out of Economic Needs Test ("ENT") requirements for establishing retail outlets. There has also been general encouragement of clean energy businesses in the country.

New Law on Tax Administration 2019 Comes into Force on 1 July 2020

On 13 June 2019, the National Assembly approved the Law on Tax Administration No. 38/2019/QH14. This law came into force from 1 July 2020.

Among other changes, the new law introduces new measures to address tax collection for Vietnam-generated income by foreign e-commerce organisations. Particularly, such organisations that carry on business through online platforms would need to register, declare and pay tax on Vietnam-sourced income, either directly or through an authorised representative. Furthermore, commercial banks would be empowered to withhold and pay taxes on behalf of the organisations. These new measures will come into effect from 2022.

The law also mandates the use of electronic invoices for all enterprises from November 2020 onwards.