Tightening corporate responsibility for fire prevention and fighting under the New Fire Prevention and Fighting Law 2024

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On November 29, 2024, the National Assembly passed Law No. 55/2024/QH15 on Fire Prevention, Fighting, and Rescue (“Fire Prevention and Fighting Law 2024”), replacing the Fire Prevention and Fighting Law No. 27/2001/QH10, as amended and supplemented by Laws No. 40/2013/QH13 and No. 30/2023/QH15 (“Fire Prevention and Fighting Law 2001”). The new law will take effect on July 1, 2025. Below are notable updates concerning corporate responsibilities for fire prevention and fighting:

Detailed regulations on fire safety conditions during construction

Compared to the 2001 Law, the 2024 Fire Prevention and Fighting Law provides more specific regulations on fire safety conditions that investors, construction owners, and construction contractors must fulfill and maintain during construction. These include: Establishing fire prevention, fighting, and rescue rules suitable for the characteristics and nature of the construction; Posting prohibition, warning, and instruction signs as required; Equipping fire prevention and fighting equipment or systems suitable for the nature and characteristics of the construction, in compliance with safety regulations for construction activities; Assigning personnel to handle fire prevention, fighting, and rescue tasks within their management scope.

These clear provisions make it easier for businesses to identify their responsibilities when participating in construction projects as investors or construction owners.

Additional fire safety conditions for buildings

The 2024 Law introduces new requirements mandating facilities to install fire alarm communication devices connected to the Fire Prevention, Fighting, and Rescue Database System. Additionally, facility owners are required to declare and update relevant fire prevention and rescue data.

The installation of such communication devices and the reporting and declaration of data will be implemented in accordance with the Government roadmap, with a mandatory start date of no later than July 1, 2027.

Specific responsibilities for ensuring fire safety in industrial electricity use

Under the 2001 Law, fire prevention and fighting regulations applied equally to residential and industrial electricity use. However, industrial electricity usage poses unique risks requiring specialized measures to minimize fire and explosion hazards. Therefore, the 2024 Law differentiates responsibilities for fire prevention in electricity installation and use for residential and industrial purposes.

For industrial activities, businesses must ensure the following fire safety conditions: Complying with safety regulations on electricity use for production under the Electricity Law; Ensuring electrical wiring and equipment installed indoors meet safety standards; Regularly inspecting and promptly repairing or replacing electrical wiring and equipment that do not meet fire safety standards; Using specialized electrical equipment in environments with fire or explosion risks, in compliance with legal regulations.

The law also adds responsibilities for businesses dealing in electrical products and equipment. These businesses must provide accurate and complete information about the quality and technical specifications of their products, ensuring suitability for intended purposes. Additionally, retail electricity providers must educate and guide consumers on safe electricity use in residential and industrial contexts as part of their business operations.

The 2024 Fire Prevention and Fighting Law marks a significant step forward in enhancing corporate responsibility for fire prevention and fighting. These new regulations clarify corporate responsibilities for ensuring fire and explosion safety in construction, production, and business activities. The added safety conditions for construction projects and the requirement to install connected fire prevention systems will improve the management, supervision, and effectiveness of fire prevention and response, thereby reducing fire-related accidents. To comply with the new fire safety requirements under the 2024 Law, businesses should proactively study and implement these regulations. Doing so will ensure legal compliance while fostering a safe working environment.

Changes in VAT Rates for Various Goods and Services Effective from July 1, 2025

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After 16 years of implementation, the 2008 Value Added Tax (“VAT”) Law has revealed numerous limitations and inadequacies in practical application. One of the most significant issues is that the VAT rates for many goods and services do not accurately reflect industry practices or international norms. To address these shortcomings, on November 26, 2024, the National Assembly officially passed the 2024 VAT Law replacing the 2008 VAT Law (“2024 VAT Law”). In addition to retaining provisions from the current law, the newly revised and supplemented content primarily pertains to VAT rates, conditions for VAT deduction, and other significant updates. Below are the key highlights of the 2024 VAT Law.

Adjustments to VAT rates for various goods and services

Under the new regulations of the 2024 VAT Law, certain goods and services will be subject to a VAT rate of 10%, instead of the previous rate of 5%. Key items subject to the 10% VAT rate from July 1, 2025, include: Unprocessed forestry products; Sugar and by-products from sugar production, including molasses, bagasse, and mud waste; Specialized equipment and tools for teaching, research, and scientific experimentation; Cultural, exhibition, sports, and artistic performance activities; production, import, distribution, and screening of films.

Similarly, the 2024 VAT Law stipulates that some goods and services previously subject to a 0% VAT rate will now be subject to a 5% rate from July 1, 2025, including: Fertilizers; Offshore fishing vessels; Machinery and equipment specialized for agricultural production.

Addition of goods and services exempt from VAT

The 2024 VAT Law adds four categories to the list of goods and services exempt from VAT, including:
(i) Insurance services for oil and gas facilities, equipment, and foreign-flagged oil storage ships;
(ii) Services related to transporting patients, renting hospital rooms and beds at medical facilities, testing, imaging, blood and blood products used for patients, and elderly and disabled care services, including healthcare, nutrition, and cultural, sports, recreational, physical therapy, and rehabilitation activities; family planning services and health rehabilitation services for patients;
(iii) Public passenger transportation services by metro or inland waterway vehicles;
(iv) Artificial products used as permanent implants in the human body.

New regulations on cashless payments for VAT deductions

The 2024 VAT Law also revises the principles of input VAT deductions. Under the 2008 VAT Law, one of the conditions for input VAT deduction was that payments for goods and services had to be made via non-cash transactions, except for transactions under VND 20 million.

However, the 2024 VAT Law eliminates the exemption from non-cash payment documentation for transactions under VND 20 million to qualify for input VAT deductions. Instead, the 2024 VAT Law stipulates that the threshold for cashless payments will be determined by the Government according to economic and social conditions at different periods.

According to the current Government plan in Decision No. 1813/QD-TTg of 2021 on promoting cashless payments in Vietnam, the threshold for cashless payments applicable to input VAT deductions will gradually decrease over time. This aims to encourage individuals and businesses to limit cash usage, aligning with the Government’s policies. Consequently, in the future, transactions below VND 20 million may still require non-cash payment documentation to meet the conditions for input VAT deductions.

With these prominent updates, the 2024 VAT Law is expected to address existing inadequacies in the current regulations and create a more transparent legal environment for businesses. However, enterprises must promptly update and adjust their internal processes and policies to comply with the new legal requirements.