Article 1.- To socialize the activities in education, healthcare, culture and sport is to mobilize and organize the broad participation of the people and the entire society into the development of these activities aimed at step by step raising the level of enjoyment of education, healthcare, culture and sport in the physical and spiritual development of the people.

Article 2.- Along with consolidating the public-founded organizations, the State encourages the wide development of non-public establishments suited to the planning of the State in the domains of education, healthcare, culture and sport operating for non-commercial purposes (hereafter called non-public establishments).

The State and society appreciate and treat the products and services provided by the non-public establishments on the same footing as those provided by the public establishments. Non-public establishments also have the responsibility to admit and supply services for the beneficiaries of social policies as the public establishments.

Article 3.- The State encourages organizations and individuals to mobilize resources within the people and organizations of all economic sectors to develop the activities in education, healthcare, culture and sport according to prescriptions of law.

Article 4.- Forms of non-public establishments

1. Semi-public: These are establishments founded on the basis of the linkage between State organizations and non-State organizations of all economic sectors or individuals according to the following modes: newly founded, involving the whole or part of a public unit into joint investment to build the material basis of the semi-public unit and to assume the management and operation of all its activities as prescribed by law.

2. People-founded: These are establishments founded by an organization with investment coming from funds outside the State budget (fund of organizations, collectives or individuals). They manage and operate all activities according to prescriptions of law. It is forbidden to use funds, properties and budget of the State to invest in people-founded establishments.

3. Private: These establishments are founded by individuals or family households that manage and operate all activities according to prescriptions of law.

The Minister of Education and Training, the Minister of Labor, War Invalids and Social Affairs, the Minister of Health, the Minister of Culture and Information and the Minister-Head of the Commission for Physical Training and Sports shall coordinate with the related ministries and branches and base themselves on Resolution No. 90/CP of August 21, 1997 of the Government on the orientation and policy of socialization of the activities in education, healthcare and culture and this Decree to draw up their plans of development of the non-public forms of establishments in their branches and concretize the policies and levels of preference and encouragement to the development of the non-public forms suited to each domain and mode of operation.

Article 5.- The non-public establishments are given priority in renting houses and infrastructures of the State as stipulated by the Government.

Article 6.- The semi-public establishments formed by the transformation (partial or whole) of public establishments by decision of the competent authority are entitled to continue the management and use of the part of properties invested by the State (including land and the properties attached to it) on the basis of the inventory and revaluation of these properties according to the prices at the time of the transformation. Such properties shall be determined as the capital contribution from the State.

Article 7.- The people�s Committees of the provinces and centrally-run cities shall base themselves on their competence, the planning and plan of land use and the land fund potential in the localities to allocate land or lease land to the non-public establishments as base of operation. The non-public establishments must use the land allocated or leased to them according to the set purpose and abide by the prescriptions of land legislation. In all cases of land use not in conformity with the purpose set in the land allocation documents, the land shall be withdrawn according to prescriptions of law.

On the basis of the current Land Law, the collection of land use levy and land rent from non-public establishments is stipulated as follows:

1. The State allocates land on a stable and long-term basis to non-public establishments and shall not collect land use levy on the land allocated for the construction of hospitals and other medical establishments, schools, job training centers, dormitories, stadiums, sport competition centers, swimming pools, sport training centers, cultural houses, art performance centers, libraries, exhibition centers and other cases prescribed by the Government.

2. In other cases of land allocation or lease by the State, the non-public establishments shall pay the land use levy or the land rent according to current legislation.

Article 8.- The State encourages organizations and individuals that own houses and land to lease them to non-public establishments for use as base of operation according to the objectives stipulated in Clause 1, Article 7 of this Decree.

Organizations and individuals that lease land to non-public establishments for use as base of operation according to objectives stipulated in Clause 1, Article 7 of this Decree do not have to pay Value Added Tax for the turnover from the lease and are refunded the tax by the State at the maximum rate equal to the income tax to be paid by the enterprise for the income from the lease according the above-said purposes.

Organizations and individuals that are refunded the tax already paid must ensure the conditions of stable term of lease, reduce the rent and must use the money refunded by the State to invest in the infrastructure for lease.

Article 9.- On housing and land tax

1. Non-public establishments that are allocated land for use according to the purposes stipulated in Clause 1, Article 7 of this Decree shall not have to pay housing and land tax.

2. In other cases of land allocation by the State, payment of housing and land tax shall comply with prescriptions of current law.

Article 10.- On registration fee

Non-public establishments are exempt from registration fee when registering the land use right and housing ownership right.

Article 11.- On Value Added Tax

Non-public establishments do not have to pay Value Added Tax on the following activities:

1. Medical activities: medical examination, medical treatment, prevention of epidemics, medical care during convalescence.

2. Cultural, exhibition and sport activities which have a movement or mass character, organization of training, competition free of charge or in which the charge is not aimed at business purpose.

3. Art performance activities such as: song, dance, music, theater, circus; other art performance activities and service of organizing art performances, production of films of various kinds.

Film distribution and projection activities: for celluloid films without distinction of subjects of the films, for video films which are only documentary, reportage and scientific films.

4. Teaching and job training, including education in general subjects, teaching of foreign languages, informatics and other subjects.

5. Printing, publication and distribution: newspapers, periodicals, specialized news bulletins, political books, text books, curricula, books of legal documents, books in scripts of national ethnic minorities, paintings and pictures, posters, mass education and mobilization.

6. Technology transfer (not including value of equipment and machinery accompanying the transferred technology).

Article 12.- On enterprise income tax

1. On tax rate:

a/ Non-public establishments in the domains of education, healthcare, culture and sport engaged in the following activities: teaching, job training, medical examination and treatment; performing national songs, dances, music and arts, film projection; art collection, conservation, development and popularization of national culture; exhibition and physical culture and sport activities not for business purposes, shall enjoy preferential rate for enterprise income tax as follows:

- Eligible for the 15% tax rate if they operate in areas with specially difficult socio-economic conditions.

- Eligible for the 20% tax rate if they operate in areas with difficult socio-economic conditions.

- Eligible for the 25% tax rate if they operate outside the above-said areas.

b/ In other cases not stipulated in Point a, Clause 1 of this Article, the 32% tax rate as currently prescribed by law shall apply.

c/ Non-public establishments do not have to pay supplementary enterprise income tax for the incomes coming from the activities stipulated in Point a, Clause 1 of this Article.

2. On reduction and exemption of enterprise income tax:

a/ Newly founded non-public establishments in the domains of education, healthcare, culture and sport including: schools at various levels; establishments for job training and raising the vocational skills of workers, fostering and raising the business management knowledge; medical establishments in the domain of medical examination and treatment; houses of national culture, traditional song and dance troupes; establishments for collection, conservation, develop-ment and popularization of the national culture; sport training and competition centers and other cases prescribed by the Government shall enjoy preferences in reduction and exemption of enterprise income tax from the time they acquire taxable incomes. More concretely:

- Reduction of income tax in the first four years and reduction by 50% of the tax to be paid in the nine subsequent years for the establishments invested in areas with exceptionally difficult socio-economic conditions.

- Exemption for the first four years and reduction by 50% of the tax payable in the seven following years for the establishments invested in areas with difficult socio-economic conditions.

- Exemption in the first two years and reduction by 50% of the payable tax in the following four years for the establishments invested outside the above areas.

b/ Non-public establishment stipulated in Point a, Clause 1 of this Article which are invested for expansion of scale and technology renewal, improvement of the ecology and environment shall enjoy preference in the reduction and exemption of enterprise income tax on the additional income brought by the new investment from the time they acquire payable income. More concretely:

- Exemption for four years and reduction by 50% of the payable tax for the seven subsequent years if they operate in areas with exceptionally difficult socio-economic conditions.

- Exemption for 3 years and reduction by 50% of the payable tax for the five subsequent years if they operate in areas with difficult socio-economic conditions.

- Exemption for one year and reduction by 50% of the payable tax during the four subsequent years if they operate outside the above areas.

The process, procedures and method of determining the tax to be reduced or exempted shall comply with the current tax legislation.

Article 13.- In case of necessity to invest in building the infrastructure or expanding and upgrading the quality of the activities, the State may reallocate to the non-public establishments the enterprise income tax amounts that they have paid for the incomes from the conduct of such activities as teaching, job teaching; medical examination and treatment; performance of national songs, dances, music and art, film projection; collection, conservation, development and popularization of national culture; exhibitions and physical culture and sport activities not for business purposes.

The maximum reallocation by the State shall be equal to the enterprise income tax that the non-public establishments have to pay. The non-public establishments can use the reallocation by the State only for the development of their material bases, strengthening, expanding and raising the quality of their activities.

The Ministry of Finance shall provide concrete guidance on the process and procedures for the reallocation; inspect the use of the reallocation at the non-public establishments as stipulated in this Article.

Article 14.- Income tax on high-income earners

Persons in the public establishments who work extra-hours for non-public establishments shall be exempt from income tax on earners if such incomes are paid high incomes by the non-public establishments.

Individuals contributing capital to non-public establishments are exempt from income tax on high-income earners if the income derives from the capital contribution and is paid by the non-public establishments.

Article 15.- On export tax and import tax

1. Non-public establishments that conduct activities under the preferential policies stipulated in Point a, Clause 1, Article 12 of this Decree are exempt from import tax on the following goods which cannot yet be produced in the country or which are produced in the country but not up to the standard of quality:

- Equipment, machinery and specialized means of transport in the technological line imported to create fixed assets of the non-public establishments, to expand the scale of investment or to renovate the technology.

- Specialized transport means to commute staff personnel, teachers and students.

2. The equipment, machinery and specialized transport means exempt from import tax must get the consent of the competent agency which decides that they are eligible for the preferential policy and must register with the border gate customs office.

3. The list of equipment, machinery and specialized transport means exempt from import tax and the competence in deciding the exemption from import tax for the non-public establishments stipulated in this Article shall comply with the provisions of the Law on Export Tax and Import Tax, the Law on Domestic Investment Promotion, and other legal documents in force.

Article 16.- The non-public establishments which conduct activities covered by the preferential policies stipulated in Point a, Clause 1, Article 12 of this Decree are eligible for preferential credit policies of the State as prescribed by current law to build material bases and buy equipment in service of the specialized jobs of the units according to projects approved by the competent authorities.

Article 17.- Non-public establishments shall have to carry out and direct the laborers in the units to carry out fully the current provisions of the State regarding social insurance and medical insurance so that the laborers in the units may enjoy the rights and interests concerning social insurance and medical insurance as laborers in the public units.

Public servants and laborers who are moved from public establishments to non-public establishments are guaranteed the social insurance of the period of their work at the public establishment or shall receive a package once-and-all allowance as provided by the State if they so desire.

Article 18.- Laborers in non-public establishments are eligible to be considered by the State for the award of commendation certificates, merit certificates, medals and commemorative medals, and the award of titles of merit like any laborer in the public establishments as well as cash rewards at the rate stipulated by the State from the State budget sources.

Article 19.- Non-public establishments shall collect charges, service charges and revenues from the sales of products and other revenues to make up for expenditures as stipulated by the Government and competent agencies:

1. Collection of school fees, hospital charges and other contributions as stipulated by the Government and competent agencies.

2. The collection of service charges and revenues from the sales of products shall be made as agreed upon between the service-providing unit and the beneficiary of the service... (except for the service products on which the State sets prices).

Apart from the above revenues, non-public establishments can also receive aid from organizations and individuals in the country and abroad according to prescriptions of law on the management and use of aid sources.

Article 20.- The annual financial results of non-public establishments shall be determined on the basis of the difference between the total revenues and total expenditures of the units in the fiscal year after fulfilling the obligation of collection and remittance to the State budget as prescribed by law. Part of the revenue of the unit shall be deduced to supplement the fund, spend on strengthening the material bases, reduce service charges, supplement the expenditures for beneficiaries of social policies, spend on rewards and welfare allowances for the laborers in the units and the objects directly cooperating with the units. The remainder shall be distributed according to the rate of contributions from the State, collectives and individuals taking part in the non-public establishments.

The revenues originating from the fund contributed by the State shall be left to the establishment for continued investment.

Article 21.- Non-public establishments must register with the financial agency and organize accountancy and statistical work as prescribed by law; make quarterly and yearly reports of accounts of the whole revenues and expenditures, increases and decreases of capital and properties of the sources registered at the financial agency; observe financial openness as prescribed by law. Non-public establishments must observe the regime of accountancy suitable for each form of operation of the units in each domain as directed by the Ministry of Finance.

Article 22.- State management of non-public establishments operating in the domains of education, healthcare, culture and sport consists of the following:

1. On the basis of the strategy, planning and plans adopted in each period and yearly for education, healthcare, culture and sport to work out the orientation for socialization in each domain as basis for the various levels and branches and the population to organize the implementation.

2. To issue policies and regimes to encourage socialization suited to the various forms of operation in education, healthcare, culture and sport and to the need of development of each domain in each period and each region.

3. To effect unified management of the contents and programs, the requirements in quantity and quality of the service in each domain as basis for the organization of implementation, monitoring and supervision by different levels and branches and the entire society.

4. To issue and withdraw permits as prescribed with regard to the non-public establishments operating in the domains of education, healthcare, culture and sport.

5. To inspect and check the implementation of the State regulations at the non-public establishments operating in the domains of education, healthcare, culture and dport; to handle the violations as prescribed by law.

6. The ministries, branches and the People�s Committees at various levels shall base themselves on their functions, tasks and competence to carry out the above stipulations on State management.

Article 23.- Competence to permit the founding of non-public establishments in the domain of education is stipulated as follows:

1. The Prime Minister shall give permission for the founding of universities.

2. The Minister of Education and Training shall give permission for the founding of colleges and pre-university schools.

3. The Ministers, the heads of the ministerial-level agencies, and agencies attached to the Government shall give permission for the founding of semi-public establishments or the transformation of the whole or part of vocational secondary schools or attached job training schools into semi-public schools.

4. The Presidents of the provincial-level People�s Committees shall give permission for the founding of general secondary schools, general education boarding schools for ethnic minorities, vocational secondary schools and job training schools under the management of the provincial level People�s Committees.

5. The Presidents of the district-level People�s Committees shall give permission for founding pre-infant schools and infant schools, primary schools, basic secondary schools, and semi-boarding general schools for ethnic minorities under the management of the district People�s Committees.

Article 24.- Competence for giving permission to found non-public establishments in the domain of healthcare:

1. The Prime Minister shall decide to found major medical establishment of national and international status.

2. The Minister of Health shall give permission to found hospitals.

3. The ministers, the heads of the ministerial-level agencies and agencies attached to the Government shall give permission to found semi-public establishments or to transform wholly or partially attached medical establishments into semi-public medical establishments.

4. The Presidents of the provincial-level People�s Committees shall give permission to found medical establishment under the management of the provincial People�s Committees.

Article 25.- Competence for giving permission to found non-public establishments in the domain of culture:

1. The Prime Minister shall give permission to found major cultural establishments of national and international status.

2. The ministers, the heads of the ministerial-level agencies and agencies attached to the Government shall give permission to found semi-public establishments or to transform wholly or partially attached cultural establishments into semi-public establishments.

3. The Presidents of the People�s Committees of provincial level shall give permission to found cultural establishments under the management of the provincial People�s Committee.

Article 26.- Competence for permission to found non-public establishments in the domain of sport:

1. The Prime Minister shall give permission to found major training and competition centers and sport grounds and stadiums of national and international status.

2. The ministers, the heads of the ministerial-level agencies and agencies attached to the Government shall give permission to found semi-public establishments or to transform wholly of partially attached sport establishments into semi-public establishments.

3. The Presidents of the provincial-level People�s Committees shall give permission to found training and competition centers, stadiums and entertainment centers of sport character of small scale under the management of the provincial People�s Committees.

Article 27.- The founding of establishments with foreign investment in the domains of education, healthcare, culture and sport shall be effected according to the Law on Foreign Investment in Vietnam and related documents.

Article 28.- The authority that permits the founding of non-public establishment shall have the right to terminate the operations or dissolve them when it deems that these establishments operate not in conformity with the permits already issued or violate the provisions of related laws.

Article 29.- This Decree takes implementation effect 30 days after its signing. The earlier provisions on the policy encouraging socialization of the activities in the domain of education, healthcare, culture and sport which are contrary to the stipulations in this Decree are now annulled.

Non-public establishments operating in the domain of education, healthcare, culture and sport which were formed before the effective date of this Decree and which are still in the period of preferential treatment according to the stipulations in this Decree shall continue to enjoy such preferential policies as stipulated in this Decree for the remaining period.

Article 30.- The Minister of Education and Training, the Minister of Labor, War Invalids and Social Affairs, the Minister of Health, the Minister of Culture and Information, the minister-head of the Commission for Physical Training and Sports shall have to coordinate with the related ministries and branches in guiding the application of this Decree in a way conformable with the characteristics of the activities and organization in each domain.

Article 31.- The Ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the Presidents of the People�s Committees of the provinces and centrally-run cities shall have to implement this Decree.