Country Risk Profiles

According to the Constitution of Viet Nam, regarding "land ownership," land (including forests, rivers and lakes, water sources, and underground natural resources) belongs to the entire people, with the State acting as the owner's representative and uniformly managing land.

The State shall hand over "land use rights" to land users following the Land Law. The State can allocate land use rights to land users in one of the following forms:

• Decision on land allocation without the collection of land use levy and allocation of land with the collection of land use levy.
• Decision on a lease of land with annual rental payment and lease of land with one-off rental payment for the entire lease period. Recognition of land use rights.

In Viet Nam, the land is collectively owned by people and administered by the government on their behalf. Therefore, under such a system, tenure rights in Viet Nam are essentially usufruct rights, meaning that right holders may use land, but cannot own it. The state grants use rights through a "land-use right certificate" (LURC), which entitles holders to sell, rent, exchange, mortgage, and bequeath their use rights and to exclude others from the land. Users may also legally acquire use rights through lease, inheritance, or grant from a family member and purchase. Land use right certificates (LURCs) are necessary for formal state recognition of a user's rights and for secured tenure, formal land transactions, access to formal credit, and legal protection of land-use rights.

Viet Nam has complex land institutions regarding land tenure rights and management rights, which date back to the 1950s. The land was not formally nationalized until the 1980 Constitution, and the first so-called "Land Law" in Viet Nam was not passed until 1988. The second Land Law was passed in 1993—a fuller version that expanded upon the 1988 law. Since then, the 1993 Land Law has been amended four times: in 1998, 2001, 2003, and 2013. With the evolution of the land policy of Viet Nam in different periods, there are several types of legally required documents that can be used as evidence for legal land use rights and forest use rights. Some of them introduced under previous regulations may still be valid according to the current Land Law of 2013.

Land-use right certificate (usually known as the "Red book") was introduced through the Land Law of 1993. Since 1993, the issuance of land use rights certificates has been progressively extended to all land users and all categories of land throughout the country. That process is still underway, and there are some circumstances in which legal forest land users have not yet been granted land use rights certificates. In this situation, several alternative evidence may apply and can be used to demonstrate legal land use rights and legal forest use rights. Such alternatives include decisions on land allocation; decisions on forest allocation; decisions on forest land allocation; decisions on forest allocation combined with land allocation; decisions on land leasing; decisions on contracting forest land; forest registration books; and written confirmation from the Commune People's Committee that the land is currently used and is not subject to any dispute.

According to the Land Law 2013 (Article 105), the Provincial People's Committees are responsible for granting certificates of land use rights to organizations, religious establishments, overseas Viet Nam, foreign-invested enterprises which implement investment projects, and foreign organizations with diplomatic functions. Provincial People's Committees may authorize the Department in charge of Natural resources and Environment of the same level to grant the certificates of land use rights and ownership of houses and other land-attached assets. On the other hand, district-level People's Committees are responsible for granting the certificates of land use rights (or the Red book) to individuals and communities and to overseas Viet Nam that are eligible to own houses associated with land use rights in Viet Nam.

Forest land is classified as a sub-category of agricultural land (Article 10, Land Law 2013). As with other land in Viet Nam, forest land is not subject to private ownership but rather belongs to the whole people and is managed by the State. However, entities, including households and organizations, can be allocated or lease forestland to use for up to 50 years. Such use rights can be inherited, transferred, and exchanged. The Land Law 2013 and Law on Forestry 2017 categorize all forestland as belonging to one of three functional categories (special-use, protection, and production) and establish principles and rules for each category's management, protection, development, and use.

With regards to forest ownership, the Law on Forestry 2017 has institutionalized the concept of "forest ownership" (Article 7) following the provisions in the 2013 Constitution; accordingly, two categories of forest ownership are defined (i) forests under the ownership of the entire people for which the State is the owner's representative, which includes: natural forest; planted forest wholly invested by the State; and planted forests revoked by the State, donated or granted forest, or other cases of other planted forest ownership transferred following legal provisions; and (ii) forests under the ownership of organizations, households, individuals, local communities including planted forest invested by organizations, individuals and local communities; and forest donated, granted by or inherited from other forest owners in compliance with legal provisions.

In summary, in Viet Nam, there are four types of ownership and use rights to the forest land and forest:

• Ownership of forest land – all land is publicly owned, with the State acting as the owner's representative.
• Land use rights – land is allocated or leased to land users by the State, and land users have land-use rights recognized by the State.
• Ownership of forest – two categories of forest ownership described above, and in short to be used in this risk assessment: State-owned and privately owned forest.
• Forest use rights - is the forest owner 's right to exploit the utilities off and enjoy yields and profits from his/her/its forest.

With the new Law on Forestry 2017, "forest owner" is defined as either an organization or a household, an individual or a local community to whom the State allocates or leases forest; land for afforestation, restoration, development of forest by his/her own; who is transferred, donated, inherits a forest following legal provisions. There are 7 types of forest owners: (1) Special-use forest management boards, protection forest management boards, (2) Economic organizations including enterprises, cooperatives, and cooperatives unions, and other economic organizations established and operating following legal provisions, except those referred to in Clause 7 of this Article, (3) People's armed forces units that are allocated forests (below referred to as armed units), (4) Forestry related science and technology, training and vocational education organizations, (5) Domestic households and individuals, (6) Residential communities, and (7) Foreign-invested enterprises that are leased land by State for planting production forests.

Forest owners have the right to use forests and own planted production forests recognized by competent state agencies following the law. And they are responsible for managing, protecting, developing, and using forests in a sustainable manner and fulfilling their financial and other obligations following the law. According to Article 54, 135, 136, and 137 of Land Law 2013, and Article 14, 15, 16 of Law on Forestry 2017, for production purposes, planted production forest land can be allocated without forest use levy or leased with a one-off payment or annual rental payment by the State to economic organizations, households, and individuals. According to Enterprise Law and Investment Law, forest owners who conduct business activities in the forest for profit are considered enterprises that are subject to requirements relating to investment registration and business registration.

According to the 2017 Law on Forestry (Article 17), a forest lease by the State means the State decides to assign forest use rights through a forest lease contract to an organization, a household, or an individual that wishes to use the forest. The State may lease to organizations, households, and individuals’ natural production forests and planted production forests with a one-off or annual rental payment for forestry production; agro-forestry and fishery practice; or eco-tourism, leisure, and recreation business. The entities that have the forests leased by the State have rights and obligations for "forest owners" as stipulated in Articles 73, 74, 79, 83 in the Law. They also have the right to share benefits from the forests under forest lease contracts; to own trees, animals, and other assets associated with the forests they have invested.

Organizations shall make sustainable forest management plans and submit them to a competent State agency for approval and implement the approved plans.

Under the 2017 Law on Forestry, as the requirements in Decree 156/2018/NĐ-CP, the process of obtaining the lease contract is as follows: Every year, the district-level People's Committee (PC) must conduct an annual plan of forest allocation and forest lease, which shall be submitted to and approved by the Provincial PC. Based on that plan, the entities will submit a Form of request for land allocation, forest lease, land lease, or forest lease with required documentation to district-level PC (if they are individuals/households) or Provincial PC (if they are organizations). Once the request is approved, the PC (provincial or district-level) will issue a Decision on land allocation, forest allocation, or Decision on land lease forest lease to the applicant.

In the case of land lease, forest lease, both sides (applicant and President of PC) will have to sign Forest Lease Contract after having the Decision. Because the forest allocation or lease must be accompanied by land allocation or lease, the forest allocation and the lease procedures will all be consistent and synchronized with the land allocation and land lease. For any mismatch between land allocation/lease and forest allocation/lease (for example, the household has been allocated forest land but has not been allocated forests on the land, or vice versa), the organizations, households, or individuals are responsible for working with relevant government agencies to complete the required dossiers for the land and the forest.

According to Article 99 of the Land Law, The State shall grant a certificate of land use rights and ownership of houses and other land-attached assets for the people allocated land or leased land by the State. Therefore, the ones who have leased land by the State also have the red book. So, in this case, since forest allocation and lease must be consistent and synchronized with the land allocation and land lease,

With the evolution of the land policy of Viet Nam in different periods, there are several types of legally required documents that can be used as evidence for legal land use rights and forest use rights, because some of them which were introduced under previous regulations may still be valid now. Therefore, there are several types of documents being listed as valid legally required records as above. On the other hand, there is a situation in Viet Nam that forests, gardens, and water surface areas managed by Special-use Forest and Protection Forest Management Boards and State-owned Agriculture and Forestry One-Member Limited Liability Company can be contracted to individuals/households or local communities, which Decree 168/2016/ND-CP stipulates.

The special-use forest and protection forest management authority can sign contracts with households, individuals, and local communities living in their managed forest area for protection and development of the forest (protection forest can be contracted to organizations). For planted protection forests that the contractor establishes under the contract terms and tenure, the contractor can enjoy the yields and profits from the concessions due to their investments after fulfilling all financial obligations to the State.

The procedure for contracting starts with the forest owner (Special-use Forest and Protection Forest Management Boards and State-owned Agriculture and Forestry One-Member Limited Liability Company) announcing the plan of contracting areas and eligible possible contractors at the head office of the forest owner and the commune-level PC.

The households, individuals, and local communities who are interested can submit a request for contracting and a copy of residential documentation to the forest owner, who then decides on a list of chosen contractors. After that, both sides will negotiate and sign the contract, and the contracted area will be handover to the contractor.

According to the 2017 Law on Forestry (Article 17), a forest lease by the State means the State decides to assign forest use rights through a forest lease contract to an organization, a household, or an individual that wishes to use the forest. The State may lease to organizations, households, and individuals’ natural production forests and planted production forests with a one-off or annual rental payment for forestry production; agro-forestry and fishery practice; or eco-tourism, leisure, and recreation business. The entities that have the forests leased by the State have rights and obligations for "forest owners" as stipulated in Articles 73, 74, 79, 83 in the Law. They also have the right to share benefits from the forests under forest lease contracts; to own trees, animals, and other assets associated with the forests they have invested.

Organizations shall make sustainable forest management plans and submit them to a competent State agency for approval and implement the approved plans.

Under the 2017 Law on Forestry, as the requirements in Decree 156/2018/NĐ-CP, the process of obtaining the lease contract is as follows: Every year, the district-level People's Committee (PC) must conduct an annual plan of forest allocation and forest lease, which shall be submitted to and approved by the Provincial PC. Based on that plan, the entities will submit a Form of request for land allocation, forest lease, land lease, or forest lease with required documentation to district-level PC (if they are individuals/households) or Provincial PC (if they are organizations). Once the request is approved, the PC (provincial or district-level) will issue a Decision on land allocation, forest allocation, or Decision on land lease forest lease to the applicant.

In the case of land lease, forest lease, both sides (applicant and President of PC) will have to sign Forest Lease Contract after having the Decision. Because the forest allocation or lease must be accompanied by land allocation or lease, the forest allocation and the lease procedures will all be consistent and synchronized with the land allocation and land lease. For any mismatch between land allocation/lease and forest allocation/lease (for example, the household has been allocated forest land but has not been allocated forests on the land, or vice versa), the organizations, households, or individuals are responsible for working with relevant government agencies to complete the required dossiers for the land and the forest.

According to Article 99 of the Land Law, The State shall grant a certificate of land use rights and ownership of houses and other land-attached assets for the people allocated land or leased land by the State. Therefore, the ones who have leased land by the State also have the red book. So, in this case, since forest allocation and lease must be consistent and synchronized with the land allocation and land lease,

With the evolution of the land policy of Viet Nam in different periods, there are several types of legally required documents that can be used as evidence for legal land use rights and forest use rights, because some of them which were introduced under previous regulations may still be valid now. Therefore, there are several types of documents being listed as valid legally required records as above. On the other hand, there is a situation in Viet Nam that forests, gardens, and water surface areas managed by Special-use Forest and Protection Forest Management Boards and State-owned Agriculture and Forestry One-Member Limited Liability Company can be contracted to individuals/households or local communities, which Decree 168/2016/ND-CP stipulates.

The special-use forest and protection forest management authority can sign contracts with households, individuals, and local communities living in their managed forest area for protection and development of the forest (protection forest can be contracted to organizations). For planted protection forests that the contractor establishes under the contract terms and tenure, the contractor can enjoy the yields and profits from the concessions due to their investments after fulfilling all financial obligations to the State.

The procedure for contracting starts with the forest owner (Special-use Forest and Protection Forest Management Boards and State-owned Agriculture and Forestry One-Member Limited Liability Company) announcing the plan of contracting areas and eligible possible contractors at the head office of the forest owner and the commune-level PC.

The households, individuals, and local communities who are interested can submit a request for contracting and a copy of residential documentation to the forest owner, who then decides on a list of chosen contractors. After that, both sides will negotiate and sign the contract, and the contracted area will be handover to the contractor. VIEW LESS

According to the 2017 Law on Forestry (Article 17), a forest lease by the State means the State decides to assign forest use rights through a forest lease contract to an organization, a household, or an individual that wishes to use the forest. The State may lease to organizations, households, and individuals’ natural production forests and planted production forests with a one-off or annual rental payment for forestry production; agro-forestry and fishery practice; or eco-tourism, leisure, and recreation business. The entities that have the forests leased by the State have rights and obligations for "forest owners" as stipulated in Articles 73, 74, 79, 83 in the Law. They also have the right to share benefits from the forests under forest lease contracts; to own trees, animals, and other assets associated with the forests they have invested.

Organizations shall make sustainable forest management plans and submit them to a competent State agency for approval and implement the approved plans.

Under the 2017 Law on Forestry, as the requirements in Decree 156/2018/NĐ-CP, the process of obtaining the lease contract is as follows: Every year, the district-level People's Committee (PC) must conduct an annual plan of forest allocation and forest lease, which shall be submitted to and approved by the Provincial PC. Based on that plan, the entities will submit a Form of request for land allocation, forest lease, land lease, or forest lease with required documentation to district-level PC (if they are individuals/households) or Provincial PC (if they are organizations). Once the request is approved, the PC (provincial or district-level) will issue a Decision on land allocation, forest allocation, or Decision on land lease forest lease to the applicant.

In the case of land lease, forest lease, both sides (applicant and President of PC) will have to sign Forest Lease Contract after having the Decision. Because the forest allocation or lease must be accompanied by land allocation or lease, the forest allocation and the lease procedures will all be consistent and synchronized with the land allocation and land lease. For any mismatch between land allocation/lease and forest allocation/lease (for example, the household has been allocated forest land but has not been allocated forests on the land, or vice versa), the organizations, households, or individuals are responsible for working with relevant government agencies to complete the required dossiers for the land and the forest.

According to Article 99 of the Land Law, The State shall grant a certificate of land use rights and ownership of houses and other land-attached assets for the people allocated land or leased land by the State. Therefore, the ones who have leased land by the State also have the red book. So, in this case, since forest allocation and lease must be consistent and synchronized with the land allocation and land lease,

With the evolution of the land policy of Viet Nam in different periods, there are several types of legally required documents that can be used as evidence for legal land use rights and forest use rights, because some of them which were introduced under previous regulations may still be valid now. Therefore, there are several types of documents being listed as valid legally required records as above. On the other hand, there is a situation in Viet Nam that forests, gardens, and water surface areas managed by Special-use Forest and Protection Forest Management Boards and State-owned Agriculture and Forestry One-Member Limited Liability Company can be contracted to individuals/households or local communities, which Decree 168/2016/ND-CP stipulates.

The special-use forest and protection forest management authority can sign contracts with households, individuals, and local communities living in their managed forest area for protection and development of the forest (protection forest can be contracted to organizations). For planted protection forests that the contractor establishes under the contract terms and tenure, the contractor can enjoy the yields and profits from the concessions due to their investments after fulfilling all financial obligations to the State.

The procedure for contracting starts with the forest owner (Special-use Forest and Protection Forest Management Boards and State-owned Agriculture and Forestry One-Member Limited Liability Company) announcing the plan of contracting areas and eligible possible contractors at the head office of the forest owner and the commune-level PC.

The households, individuals, and local communities who are interested can submit a request for contracting and a copy of residential documentation to the forest owner, who then decides on a list of chosen contractors. After that, both sides will negotiate and sign the contract, and the contracted area will be handover to the contractor. VIEW LESS

According to Article 27 of the Law on Forestry 2017, the responsibility to make and implement a sustainable forest management plan (SFM plan) is stipulated as follows: a. Forest owners being organizations (both State and privately owned) shall make and implement sustainable forest management plans. b. Forest owners being households, individuals, residential communities, or groups of households or individuals, are encouraged to make and implement sustainable forest management plans For the protection of forests, the key contents in the sustainable forest management plan include a) Assessment of natural, socio-economic, national defence and security conditions; status quo of forest resources; b) Objectives and scope of sustainable forest management; c) The protection function of the forest; d) Forest management, protection, development, and use activities; e) Solutions and plan for implementation. For production forests, key contents of sustainable forest management plan include a) Assessment of natural and socio-economic conditions; status quo of forest resources, production, and trading results; market impacts on the forest owner's activities; b) Objectives and scope of sustainable forest management; c) Forest management, protection, development, use, and forest products trade; d) Solutions and plan of implementation The form of a sustainable forest management plan for forest owners being organized is provided in Appendix II to Circular 28/2018/TT-BNNPTNT. According to Articles 10-13 of Circular 28/2018/TT-BNNPTNT, the approval on sustainable forest management plans shall be as follows: For forest owners, organizations that manage special-use forests under the Ministry of Agriculture and Rural Development: MARD shall be approved. For forest owners being private economic organizations or households, individuals, and communities (who invest their own money to establish plantations): no approval required. For other organizational forest owners: Provincial People's Committee shall approve. As required in Circular 28/2018/TT-BNNPTNT, forest owners must prepare and submit a report on the results of implementing their SFM plan to the District Department of Agriculture and Rural Development before 10 th December annually. Regarding rubber wood which can be grown on forest land and other agricultural land , the requirements for a sustainable forest management plan are only applicable to plantations established on forest land.

Note that there is a logging ban in force for the natural forest. The Law on Royalties provides for the payment of royalties on the exploitation of Viet Nam natural and mineral resources. The Law describes the natural resource output used for royalty calculation, royalty-liable prices, and royalty rates. Royalty payers must register, declare, calculate, and pay royalties under the Law on Tax Administration.

Round wood, unprocessed logs directly planted and sold by organizations or individuals, are not subject to VAT. (Law 13/2008/QH12, Article 5)

For round wood, unprocessed logs that enterprises and cooperatives, which pay VAT by the credit method, sell to enterprises or cooperatives at the commercial stage, the seller is not required to declare and pay VAT.

On the VAT invoice, the seller will write the sales price without VAT and cross out the tax rate and VAT line.

Processed wood products such as planks, wood panels, wood chips are subject to the VAT rate of 10% (Law 13/2008/QH12, Article 8)

For export of timber products

Export of timber products are subject to Export tax. The detailed export tax rates for timber products, according to HS Code, are provided in Decree No. 125/2017/ND-CP. 

The regulations (Circular 68/2019/TT-BTC) define “high tax risk enterprises”. High-risk enterprises are defined as those which have equity of less than VND 15 billion and have certain features, for example: Sales of goods or provision of services to related parties (a definition thereof is included); or Non-compliance with certain tax declaration requirements; or Change of business location more than 2 times within 12 months without any notification or any tax declaration at the new location; or Enterprises have been penalized for breaches of the invoice regulations in the last year. Etc… “High tax risk enterprises” are required to use e-invoices with verification codes, instead of normal paper VAT invoices, continuously for 12 months. The “high tax risk enterprise” status will then be re-assessed after 12 months for possible approval for using e-invoices without verification code.

If an enterprise is in the list of “High tax risk enterprises”, it can be found on the website of the General Department of Taxation http://tracuuhoadon.gdt.gov.vn/dnrrvp.html

Viet Nam is going to make e-invoice compulsory for all entities. It is currently in the transition period, and the due date to completely change to e-invoice is 1 st July 2022. From 1 st July 2022, e-invoice should be possible be checked online for their validity on the website of the General Department of Taxation http://tracuuhoadon.gdt.gov.vn/main.html

According to the Law on Personal Income Tax and the detailed instruction Circular 111/2013/TT-BTC, income of households and individuals directly engaged in agricultural production, forestry, salt making, aquaculture, and fisheries activities, of which products have not yet been processed, are exempted from personal income tax.

The eligible household/individual must have the legal right to use land, rent land, use water surface, rent water surface for production, and directly participate in agricultural, forestry, salt making, and aquaculture production process.

According to Law on Corporate Income Tax, any organization conducting production activities [and/or] business in goods and services that earn taxable income must pay corporate income tax.

Taxable income comprises income earned from activities of production and/or business in goods and services AND other incomes, including income from the transfer of capital or transfer of the capital-contributing rights; income from the transfer of the real estate, transfer of investment projects, transfer of the right to participate in investment projects or transfer of the right to explore, exploit and process minerals; income from asset use rights or asset ownership rights, etc.…. (Law 71/2014/QH13).

In Viet Nam, incomes from planting, tending, and protecting forests in forestry enterprises or cooperatives operating in areas with difficult or extremely difficult socio-economic conditions are entitled to enterprises' income tax preferences. The income tax rate of 10% shall be applied in this case (the normal corporate income tax rate is 20%). The eligible areas are in the most updated list in Decree 31/2021/NĐ-CP dated 26 March 2021.

Enterprises must pay corporate income tax provisionally every quarter based on estimates. The payment deadline is no later than the 30th day of the following quarter. Essentially, a final tax declaration and return must be filed and submitted annually. This must be done within 90 days after the end of the calendar year or fiscal year. The total sum of provisional quarterly payments will then be reconciled with the finalization amount.

The regulations (Circular 68/2019/TT-BTC) contain a definition of “high tax risk enterprises.” In particular, high-risk enterprises are defined as those which have equity of less than VND 15 billion and have certain features, for example: Sales of goods or provision of services to related parties (a definition thereof is included); or Non-compliance with certain tax declaration requirements; or Change of business location more than 2 times within 12 months without any notification or any tax declaration at the new location; or Enterprises that have been penalized for breaches of the invoice regulations in the last year, etc.… “High tax risk enterprises” are required to use e-invoices with verification codes continuously for 12 months. The “high tax risk enterprise” status will then be re-assessed after 12 months for possible approval for using e-invoices without verification code.

The Law on Forestry and other legal documents specifying conservation of nature (including biodiversity) apply only to special-use forests (national parks, nature reserves, species conservation areas, historic parks, cultural sites). On the other hand, protection forests are used predominantly for protecting water resources, land, to prevent erosion and desertification in key areas, to restrict natural calamities, and to regulate climate. So special-use forests are the main protected areas and support protected species, established in areas with significant ecological and/or cultural importance.

The management of protected areas is coordinated by the Forest Protection Department (FPD) within the MARD. Forest management boards of protected areas (FMBs) belonging to the state currently manage more than 4.7 million ha, primarily special-use and protected forests for protection and conservation purposes. As of 2020, out of 4.7 million ha, about 88% are natural forests, and the remaining 12% are plantation forests (Decision 1558/QĐ-BNN-TCLN). FMBs receive central government budget allocations and, in many cases, contract local people to implement protection and conservation activities (EFI 2011, FPD 2013).

Viet Nam has regulations to ensure conservation in special-use forests. Around the special-use forests, there is a buffer zone to further ensure that the special use forests are not infringed upon. Furthermore, there is currently a logging ban in Viet Nam for natural forests, in both protection forests and special-use forests. The production forests are not subject to requirements for protection activities.

In the Law on Forestry, there is mention of protecting species and sites in production forests; however, no circular or decree elaborate how this should be carried out. Harvesting companies must identify endangered animal and plant (including timber) species within the forest management unit (FMU) as per the Decree 06/2019/ND-CP list and comply with relevant provisions for their protection or exploitation as appropriate.

For forest owner who would like to plant, and harvest protected species for commercial purpose, Article 12 and 15 of Decree 06/2019/ND-CP stipulates the conditions for this, as below:

• For planting: Forest owner or planting facility must have suitable conditions for characteristics of the species and shall register with the Provincial FPD to have a Facility Code. The facility also must have a Planting (raising) plan according to Form no. 07; and keep a Planting (raising) logbook according to Form no. 17 provided in the Decree.
• For harvesting: The forest owner shall have a harvest plan according to Form No.01 provided in the Decree. Before harvesting, the forest owners must notify the provincial-level state management agency in forestry, the Provincial FPD, for monitoring.

According to Decree 06/2019/ND-CP, some common protected timber species are as below:

• Group IA (Flora species threatened with extinction and banned from exploitation or use for commercial purpose, and species in CITES Appendix I are naturally inhabiting Viet Nam): Xanthocyparis Viet Namensis (Bách vàng), Taiwania cryptomerioides (Bách đài loan), Cupressus tonkinensis (Hoàng đàn hữu liên), Cunninghamia konishii (Sa mộc dầu), Glyptostrobus pensilis (Thông nước), Keteleeria davidiana (Du sam đá vôi), Abies delavayi subsp. fansipanensis (Vân sam fan si pang).
• Group IIA (flora species that, although currently not threatened with extinction, but may become so without strict control of exploitation and use for commercial purpose and species specified in CITES Appendix II naturally inhabiting Viet Nam): Calocedrus rupestris (Bách xanh núi đá), Calocedrus macrolepis (Bách xanh), Fokienia hodginsii (Pơ mu), Taxus chinensis (Thông đỏ lá ngắn), Taxus wallichiana (Thông đỏ lá dài), Cephalotaxus mannii (Đỉnh tùng), Podocarpus pilgeri (Thông tre lá ngắn), Pinus cernua (Thông xuân nha), Pinus dalatensis (Thông Đà Lạt), Pinus krempfii (Thông lá dẹt), Pinus kwangtungensis (Thông Pà cò), Pinus kwangshanensis (Thông hai lá quả nhỏ), Pseudotsuga brevifolia (Thiết sam giả lá ngắn), Diospyros mun ( Mun), Afzelia xylocarpa (Gõ đỏ), Sindora siamensis (Gụ mật), Sindora tonkinensis (Gụ lau), Dalbergia oliveri (Cẩm lai Bà Rịa), Pterocarpus macrocarpus (Giáng hương quả to), Erythrophloeum fordii (Lim xanh), Dalbergia cochinchinensis (Trắc), Dalbergia rimosa (Trắc dây), Dalbergia tonkinensis (Sưa), Cinnamomum balansae (Gù hương), Cinnamomum glaucescens (Re xanh phấn), Cinnamomum parthenoxylon (Vù hương), Excentrodendron tonkinense (Nghiến).

Circular No. 39/2014/TT-BTC requires the sales invoice to be made by the sellers who are organizations, households, and individuals that sell goods and/or provide services in Viet Nam or abroad.

Circular 119/2014/TT-BTC requires that information in the sale invoice include: Names of goods and services, units, quantity, unit prices of goods and services; amount must be written in numbers and words.

Circular 27/2018/TT-BNNPTNT defines that the forest product owner shall make a packing list after harvesting; when trading, transporting and dispatching forest products. The packing list reflects the information related to forest products on the vehicle used for transport.

Circular 27/2018/TT-BNNPTNT stipulates the information which must be contained in the Packing list of forest products by forest owners/log owners, including:

• For round wood and sawn timber: Number, marking label, Common name, Scientific name (only for exported timber and sawn timber), Quantity, Dimensions and Volume.
• For wood products: Wood product name, Marking label number (if available), Common name, Scientific name, Quantity and volume of the product, Unit. Articles 36 – 42 of Circular 27/2018/TT-BNNPTNT outline the inspection procedure of tracing forest products.

The Forest Protection Department will conduct two types of inspection: annual inspection or unannounced inspection. Unannounced inspection will be conducted when complaints, violations, denunciations, or reports are made.

The contents of the inspection will include:

• Harvesting activities: Compliance with regulations of law before harvesting; compliance with regulations of law during and after harvesting; documents concerning the harvesting of forest products; Regarding harvested wood that is skidded and transported to a storage area, it is required to inspect its quantity, volume, type and number of woods, packing list; harvesting documents.
• Transport of forest products: a) Dossiers and applications specified in Sections 2 and 3 Chapter III of this Circular; and b) Forest products available on the vehicle.
• Wood and non-wood forest products at processing and trading facility: a) Forest product dossiers specified in Clause 1 Article 31 of this Circular; b) Forest products available at the facility; c) Storage of forest product dossiers.
• The imported, exported, or transited forest products: a) Dossiers and applications specified in Article 17 and Section 3 Chapter III of this Circular; b) Forest products available at the border checkpoint.
• A forest animal specimen raising and processing facility: a) Dossier on raised forest animals specified in Clause 2 Article 31 of this Circular; b) Forest animals raised.
• A forest product storage facility: a) Forest product dossier specified in Article 32 of this Circular; b) Forest products available at the storage facility.

Decree 132/2020/NĐ-CP dated November 5, 2020, on prescribing tax administration for enterprises having related-party transactions that regulate transfer pricing doctrines, methods, and processes for the determination of transfer pricing factors; taxpayer’s transfer pricing rights and obligations, declaration procedures; responsibilities of state regulatory authorities for the tax administration over taxpayers having related party transactions. Article 5 defines the enterprises that are related parties: 1) A party is directly or indirectly involved in the management, control of, the contribution of capital to, or investment in, the other party; 2) Parties are directly or indirectly affected by the management, control of, the contribution of capital, or investment, from the other party and meet one of the following conditions from points a to me of the Article 5.

Article 18 indicates that the taxpayers (enterprises) engaged in related party transactions shall be held responsible for declaring information about their interrelationships or intra-group relationships and related party transactions using Form No. 01 given in Appendix I, II and III to this Decree, and submitting their completed forms together with Finalization of corporate tax and retaining and providing the transfer pricing files comprising information, documents, data and records.

• Exemption: Taxpayers shall be responsible for making transfer pricing declaration according to Appendix I to this Decree, but shall be exempted from the transfer pricing documentation requirements in the following circumstances: Taxpayers are engaged in the transfer pricing, but their total sales arising within a specified taxable period are less than VND 50 billion, and their total values of the related-party transactions arising within a specified taxable period do not exceed VND 30 billion (Article 19 of Decree 132/2020/NĐ-CP)

Taxpayers already entering into the Advance Pricing Agreement (APA) have submitted the annual report following the legislation on Advance Pricing Agreements. For those related party transactions not covered by the APA, taxpayers shall be responsible for making transfer pricing declarations as referred to in Article 18 herein. Taxpayers perform business activities by exercising simple functions, neither generating any revenue nor incurring any cost from an operation or use of intangible assets, generating the sales of less than VND 200 billion, as well as applying the ratio of net operating profit before deducting loan interest and corporate income tax (exclusive of the difference between sales and costs of financial activities) to net sales, in detail: Distribution (5% or over), Manufacturing (10% or over), Processing (15% or over.). Law No. 38/2019/QH14, Article 42 provide the rules for declaring and calculating taxable prices in related-party transactions:

• a) Values of related-party transactions shall be determined and declared by analysing and comparing with independent transactions the nature of operation and nature of the transaction, to determine tax liability in the same manner as that of transactions between independent parties.
• b) Values of related-party transactions shall be adjusted according to independent transactions to declare tax so taxable income is not decreased.
• c) Taxpayers whose businesses are small in scale and pose low tax risk are exempt from compliance to provisions of Point a and Point b of this Clause and may apply simplified related-party transaction declaration procedures.

Circular No. 45/2021/TT-BTC and Decree No. 126/2020/ND-CP guide the enterprises' application Advance Pricing Agreement (APA). An APA will be applied on the principle that the tax authority and the taxpayer or a Viet Nam tax authority and a party tax authority and a taxpayer cooperate, discuss and negotiate the application of regulations of law on payment of corporate income tax on the related transactions covered by APA in conformity with arm’s length principle and substance-over-form principle.

According to article 3 of Decree No. 69/2018/ND-CP, there is no specific license/permits required for import/export of timber and timber products into and out of Viet Nam, except for licenses for timber and timber products (CITES License) or import from the countries that have entered a Voluntary Partnership Agreement (VPA) with EU and has an operative FLEGT licensing system (FLEGT License).

The enterprise interested in importing/exporting goods must hold a business registration certificate.

There is a suspension of temporary import for re-export of round timber and sawn timber from natural forests of Laos and Cambodia from January 01, 2019, to December 31, 2023 (No. 44/2018/TT-BCT).

The importers/exporters must submit the customs declaration online. The customs declaration requires a wide range of information that includes the product classification (HS codes, quantities, qualities and species). The system will automatically check whether the importer/exporters are eligible for importing/exporting. The Viet Nam customs system classifies the imported/exported products into 3 lines with different levels of risk management. Accordingly, 1) Green line (low risk): Exemption from detailed inspection of records and physical inspection of goods by the custom sub-department, 2) Yellow line (medium risk): Records are required to be checked, exemption from physical inspection of goods; 3) Red line (high risk):

Records and physical inspection are needed ( Decision No. 1966/QĐ-TCHQ).

The products that are customs cleared are considered legally imported/exported.

In addition, inspection can be made at the border gate after the customs clearance depending on the risk level of the shipment.

Article 4 of Decree No. 102/2020/ND-CP, the timber importer shall be legally responsible for: 1) the legal origins of the timber according to relevant laws of the country of harvest, 2) comply with the request for information according to the criteria for evaluation of exporting countries and species and 3) take responsibility for the accuracy of the documents provided and information declared. The import of timber shall be based on a risk assessment identifying whether the countries/regions and the species are low/high risk.

All the importers shall implement the due diligence system regulated under this decree. Decision No. 4832/QĐ-BNN-TCLN provides the list of 51 low-risk countries/regions considered low-risk for importing. The high-risk species criterion is listed in article 6 of Decree No. 102/2020/ND-CP.

The importing dossiers are regulated in Article 7 of Decree No. 102/2020/ND-CP.

The Viet Nam government and the European Union (EU) announced the start of formal negotiations for a Forest Law Enforcement, Governance and Trade (FLEGT) Voluntary Partnership Agreement (VPA) on 18 August 2010. This Agreement aims to ensure the legality of timber products entering the EU market. At the same time, it could help maintain and expand the export of timber and timber products from Viet Nam enterprises, subject to the changing EU market requirement as of March 2013.

The EU and Viet Nam signed the VPA in October 2018. The VPA entered into force in June 2019, after both the EU and Viet Nam had ratified it following their respective procedures. The VPA is yet fully implemented after the VPA has entered into force.

During the early stage of the implementation phase of the VPA, Viet Nam is revising and developing new legislation requirements to realize the commitments of the VPA. Following that, legislation will have to be implemented by developing new elements and building capacity to operate the system. In 2020, Viet Nam issued Decree 102/2020/ND-CP on Viet Nam Timber Legality Assurance System, which is to ensure that timber products are verified as legal according to specified requirements for all stages of the supply chain, from the forest or the point of import to the point of final sale or export. The Decree went into force on 31st October 2020.

There have been requirements for Viet Nam operators to exercise due diligence to assess the legality of timber and timber products they import from that effective date. When importing timber, Viet Nam importers shall complete a self-declaration that documents their due diligence exercise, including collecting information, risk assessment, and mitigation of any risk related to the legal origin. Customs Department will verify compliance with due diligence requirements in cooperation with other relevant agencies.

Decision No. 4832/QĐ-BNN-TCLN provides the list of 51 countries/regions considered low risk for importing. The high-risk species criterion is listed in article 6 of Decree No. 102/2020/ND-CP. Article 10 on Timber dossier for export and the FLEGT License has not been put in force yet. Therefore, the Timber dossier for export shall still be regulated by Article 26 of Circular 27/2018/TT-BNNPTNT. The Timber dossier for export and issuing the FLEGT License will be valid when the Prime Minister issues a decision on effective dates of regulations on management of timber for export prescribed in Section 2 Chapter II and FLEGT licensing prescribed in Section 1 Chapter IV of this Decree.

According to Article 30 of Circular No. 27/2018/TT-BNNPTNT: The organization shall prepare the forest product entry and exit book using the Form No. 11 of the circular that includes the information of:

• Opening stock and Ending stock Received:
• Forest product name (Common name, scientific name), number, marking label, unit, volume or weight, endangered/rare species; CITES Forms, ordinary species, enclosed document
• Dispatched: Number of packing list of forest products dispatched, volume, weight, enclosed documents, estimated amount of lost raw materials (if available)