Pursuant to August 28, 2001 Ordinance No. 38/2001/PL-UBTVQH10 on Charges and Fees;

Pursuant to the Government’s Decree No. 57/2002/ND-CP of June 3, 2002 detailing the implementation of the Ordinance on Charges and Fees;

Pursuant to the Prime Minister’s Directive No. 13/2002/CT-TTg of June 11, 2002 on deploying the implementation of the Ordinance on Charges and Fees and the Government’s Decree No. 57/2002/ND-CP of June 3, 2002 detailing the implementation of the Ordinance on Charges and Fees;

The Ministry of Finance hereby guides the implementation as follows:

I. SCOPE OF APPLICATION

1. The Circular shall apply to the collection, remittance, management and use of charges and fees on the detailed list of charges and fees issued together with the Government’s Decree No. 57/2002/ND-CP of June 3, 2002 detailing the implementation of the Ordinance on Charges and Fees (called Decree No. 57/2002/ND-CP for short), which are carried out by the State agencies, economic organizations, people’s armed force units, non-business units and organizations authorized by the State, other organizations and individuals (called collectively as organizations and individuals).

2. This Circular shall not apply to those charges specified in Article 3 of Decree No. 57/2002/ND-CP:

a/ Insurance premiums of all kinds: social insurance, medical insurance premiums and other insurance premiums like deposit insurance, life insurance, non-life insurance, re-insurance premiums…;

b/ Membership fees of political, socio-political, social, socio-professional organizations and clubs not on the detailed list of charges and fees, issued together with Decree No. 57/2002/ND-CP like Party membership fee, trade union fee, membership fees of Vietnam Youth Union, Vietnam Women’s Union, Vietnam War Veterans’ Association, Vietnam Peasants’ Association, Vietnam Council of Union of Cooperatives, and clubs; yearly and monthly dues of domestic and foreign organizations, such as the United Nations organizations, the International Article Code Organization, the International Civil Aviation Organization (ICAO), inter-regional and sub-regional international organizations, professional associations…;

c/ Other charges not on the detailed list of charges and fees issued together with Decree No. 57/2002/ND-CP, such as freights, post and telecommunication charges, cash payment and remittance charges of credit institutions, etc.

3. Where an international agreement signed or acceded to by the Socialist Republic of Vietnam contains charge and fee provisions different from those of the Ordinance on Charges and Fees, Decree No. 57/2002/ND-CP and the guidance in this Circular, the provisions of such international agreement shall apply.

II. DECENTRALIZATION OF THE COMPETENCE TO PRESCRIBE CHARGES AND FEES

1. Regarding charges:

a/ The competence to prescribe the rates and the regime of collection, remittance, management and use of charges is decentralized as follows:

- The Government shall prescribe a number of important charges with big amounts and related to many social and economic policies of the State;

- The People’s Councils of the provinces and centrally-run cities (called collectively the provincial-level) shall prescribe a number of charges associated with the land and natural resource management, which fall under the State administrative management function of the local administrations;

- The Ministry of Finance shall prescribe other charges for uniform application nationwide.

b/ For a number of charges which the Government has the competence to prescribe but it authorizes ministries or ministerial-level agencies to prescribe their rates, the regime of collection, remittance management and use of the collected charge amounts shall comply with the Government’s stipulations and the Finance Ministry’s guidance on such charges.

c/ The competence to prescribe each particular charge is inscribed in the detailed list of charges and fees issued together with Decree No. 57/2002/ND-CP.

d/ The ministries and ministerial-level agencies which are authorized by the Government to prescribe the charge rates and the provincial-level People’s Councils must, after promulgating documents prescribing the charge rates applicable in their respective localities, send such promulgated documents to the Ministry of Finance for synthesization and reporting to the Government according to regulations.

e/ If organizations or individuals find it necessary to change and/or add the charge rates and/or the regime of collection, remittance, management and use, they must report them in writing to:

- The Ministry of Finance either for submission to the Government for consideration and settlement (for cases falling under the Government’s competence as prescribed in the Ordinance on Charges and Fees), or for study and revision in a suitable and timely manner (for cases falling under the settling competence of the Ministry of Finance);

- The provincial-level People’s Committees for submission to the provincial-level People’s Councils for consideration and decision, for cases falling under the deciding competence of the provincial-level People’s Councils.

f/ For all cases of necessity to add the list of charges, organizations and individuals shall report them in writing to the Ministry of Finance for submission to competent State bodies for decision.

2. Regarding fees:

a/ The competence to prescribe the rates and the regime of collection, remittance, management and use of fees is decentralized as follows:

- The Government shall prescribe a number of important fees with big amounts and of international legal significance;

- The Ministry of Finance shall prescribe other fees.

The competence to prescribe each particular fee is prescribed in the detailed list of charges and fees issued together with Decree No. 57/2002/ND-CP.

b/ Where it is necessary to change or add the list of fees, fee rates or the regime of collection, remittance, management and use, organizations and individuals shall report such in writing to the Ministry of Finance for submission to the Government for consideration and settlement (for cases falling under the Government’s competence as prescribed in Article 9 of the Ordinance on Charges and Fees), or for study and revision in a suitable and timely manner (for cases falling under the settling competence of the Ministry of Finance).

3. State bodies competent to prescribe charges and fees under the provisions of Decree No. 57/2002/ND-CP and the guidance at Points 1 and 2, this Section, must not authorize their subordinate agencies to prescribe the charge and fee rates as well as the regime of collection, remittance, management and use of charges and fees which fall under their respective competence. The prescription of the rates and the regime of collection, remittance, management and use of each particular charge or fee must comply with the guidance in Section III of this Circular.

III. THE RATES AND THE REGIME OF COLLECTION, REMITTANCE, MANAGEMENT AND USE OF CHARGES AND FEES

A. CHARGE RATES

1. The rates of charges for the services invested by the State, organizations or individuals must ensure the full retrieval of capital within a reasonable duration; be compatible with the payers’ payment capability; and be convenient for both charge collectors and payers. Besides, the rates of charges for the services invested by the State must ensure the realization of the Party’s and the State’s socio-economic development policies in each period and be suitable to the practical situation.

2. Expenses for the provision of services for which charges are collected, and for the determination of charge rates include:

a/ Expenses for construction, procurement, maintenance, regular and periodical repair of machinery, equipment, working facilities, etc., or for renting of property in direct service of the charge collection. These expenses shall be apportioned according to the extent of wear and tear of the property in direct service of the charge collection;

b/ Expenses for supplies, raw materials, materials and fuel used in the charge-collecting process;

c/ Payment of salaries or wages, allowances, and salary- or wage-based contributions according to the current regime, to laborers directly involved in the charge and fee collection;

3. The rates of those charges falling under the prescribing competence of the Government shall comply with the Government’s stipulations on each particular kind of charge.

4. The rates of those charges falling under the prescribing competence of the provincial-level People’s Councils shall be submitted by the provincial-level People’s Committees under the guidance of the Ministry of Finance.

5. The reasonable duration for full recovery of capital already invested in the provision of services for which charges are collected shall be determined (estimated) on the basis of the assessment of the charge collection possibility, the charge collection efficacy, investment capital as well as the demand to recover the invested capital, and be inscribed in the charge collection schemes.

6. Basing themselves on the provisions at Points 1, 2 and 5 of this Section, organizations and individuals permitted to collect charges shall have to formulate the charge rates together with the charge collection schemes (describing the investment mode, the time of investment completion, the time of putting the investment project to use, the expected time of starting the charge collection, expected charge rates, bases for setting charge rates, evaluation of the payment capability of charge payers, charge collection efficacy, and the capital recoverability) and submit them to the agencies competent to prescribe charges (the Government, the Ministry of Finance or provincial-level People’s Councils) for consideration and decision.

Before the charge rates are submitted to competent authorities for promulgation or revision and/or addition, the finance agency of the same level should be consulted thereon, except where the charge rate-setting agency is the finance agency.

The written opinions of the finance agencies must be enclosed with the dossiers and shall serve as a legal base for the consideration and decision by the agencies competent to prescribe charges.

The prescription of charge rates must be based on the State’s undertakings and policies, the economic, political and social situation as well as the characteristics of the localities in each period, on the nature and characteristics of each service for which charge is collected, and refer to the rates of the similar charges (if any) in the countries in the region and the world.

7. The rates of those charges not belonging to the State budget shall be taxed under the provisions in Clause 2, Article 17 of Decree No. 57/2002/ND-CP, including value added tax at the rates applicable to the corresponding services as prescribed in the Value Added Tax Law and current documents guiding the implementation thereof.

B. FEE RATES

1. The to be-collected fees are pre-fixed in certain amounts of money for each State management job for which fee is collected, but not for the purpose of offsetting expenses incurred in the fee collection work, and in compliance with international practices.

2. On the basis of the provisions at Point 1 above, organizations permitted to collect fees shall have the responsibility to set the fee rates and send them together with the written requests for fee collection to the Ministry of Finance either for submission to the Government for consideration and promulgation (for fees falling under the prescribing competence of the Government), or for study and promulgation (for fees falling under the prescribing competence of the Ministry of Finance).

3. The registration fee rates shall comply with the Government’s current regulations on registration fees (the Government’s Decree No. 176/1999/ND-CP of December 21, 1999 on registration fees) and documents guiding the implementation thereof.

C. MANAGEMENT AND USE OF COLLECTED AMOUNTS OF CHARGES AND FEES BELONGING TO THE STATE BUDGET

1. The charge and fee amounts collected from the services invested by the State or from those services exclusively owned by the State (called charges and fees belonging to the State budget for short) shall be managed and used as follows:

a/ For charge and fee amounts collected directly by the tax agencies or by other charge- and/or fee-collecting organizations which receive funding from the State budget to cover expenses for charge- and/or fee-collecting activities according to annual cost estimates, they must be fully remitted into the State budget;

b/ Where collecting organizations receive no funding from the State budget to cover expenses for charge- and/or fee-collecting activities or organizations are authorized to collect charges and/or fees, the collecting organizations shall be allowed to retain part of the collected charge and/or fee amounts to cover charge- and/or fee collection expenses, and must remit the rest into the State budget.

2. Collected charge and fee amounts shall be remitted into the State treasuries according to the following regulations:

a/ For charges and fees collected by the tax agencies, the payers shall pay them directly to the State budget through the State treasuries in the localities where such charges and fees are collected under the guidance of the tax agencies. Where State treasuries have not yet organized the collection of charges and fees directly from payers, the tax agencies shall collect charges and fees on behalf of State treasuries and must, at the end of each day, carry out procedures to remit all the charge and fee amounts collected in the day into the State budget;

b/ For charges and fees collected by State agencies and other organizations (other than tax agencies), such State agencies and organizations may open accounts for "temporary custody of charges and fees" at State treasuries in the localities where charges and fees are collected for monitoring and management of charge and fee amounts. Based on the situation of the charge and fee collection (whether collected charge and fee amounts are small or big, charge and fee collection places are close to or far from State treasuries…), daily or weekly, the State agencies and other organizations that collect charges and fees must remit the charge and fee amounts collected in the period into the "temporary custody of charges and fees" accounts and organize the separate accounting of these amounts according to the accounting regime applicable to administrative and non-business units (for non-business units having revenues), or according to the enterprises’ accounting regime (for enterprises);

c/ For charges and fees which State agencies or other organizations are authorized to collect abroad, they must be remitted in the fund of temporary custody of State budget under the Finance Ministry’s guidance on the management of the fund of temporary custody of State budget at overseas Vietnamese representation missions (the Finance Ministry’s Circular No. 29/2000/TT-BTC of April 24, 2000).

3. The portions of charge and fee amounts to be retained by the collecting organizations to cover charge and fee collection expenses shall be calculated in percentage (%) of the total charge and fee amount collected annually. This percentage (%) shall be determined as follows:

Annual estimate of expenditures needed for the charge and fee collection according to the prescribed regime, criteria and norms
Percentage (%) = ———————————————————————————— x 100
Annual estimate of to be-collected charge and fee amounts

Depending on the nature and characteristics of each charge or fee and the spending items at Point 4 of this Section, the competent State bodies shall decide on the percentage (%) to be retained by the charge- and/or fee-collecting organizations, which shall be kept stable for a few years. The retained charge and fee amounts shall be managed and used under the guidance at Point 4 of this Section.

4. The charge and fee amounts retained by the collecting organizations shall be tax-free, managed and used as follows:

a/ For public-utility State enterprises, they shall manage and use their retained charge and fee amounts under the Government’s stipulations on public-utility State enterprises (Decree No. 56/CP of October 2, 1996) and documents guiding the implementation thereof, including the Finance Ministry’s guiding documents on the financial management regime exclusively applicable to each specific branch (if any).

b/ For other organizations, they may spend their retained charge and fee amounts on the following:

- Payment of salaries or wages, allowances, salary- or wage-based contributions according to the current regime, to laborers directly involved in the charge and fee collection;

- Expenses in direct service of the charge and fee collection, such as stationery, office supplies, telephone, electricity, water, working trip allowances, official-duty allowances according to current criteria and norms;

- Expenses for regular repair, overhaul of property, machinery and equipment in direct service of the charge and fee collection;

- Procurement of supplies, raw materials and other expenses directly related to the charge and fee collection;

- Deductions into the reward and welfare funds for officials and employees directly involved in the charge and fee collection in the units, with the maximum level of three months’ actually paid salary per person per year if the current year’s collected revenue is higher than that of the preceding year, or of two months’ actually paid salary if the current year’s revenue is lower than or equal to that of the preceding year.

Annually, the charge- and fee-collecting organizations must make revenue and cost estimates and send them to the superior branch- or field-managing agency, the finance agency and the tax agency of the same level (if the collecting organizations are the People’s Committees at all levels, they must send such estimates to the superior finance and tax agencies), to the State treasuries where they open accounts for temporary custody of charges and fees for spending control according to current regulations and under the guidance of this Circular; annually, they must settle revenues and expenditures actually effected. After the settlement is carried out strictly as prescribed, any charge and fee amounts not yet spent in the year may be carried forward to the subsequent year for continued spending according to the prescribed regime.

5. In order to raise the quality and efficiency of the charge and fee collection and to increase laborers’ incomes, the charge and fee collection shall comply with the financial mechanism already prescribed in the Government’s Decree No. 73/1999/ND-CP of August 19, 1999 on policies to encourage the socialization of activities in educational, healthcare, cultural and sport domains, the Prime Minister’s Decision No. 192/2001/QD-TTg of December 17, 2001 on expanding the experimental assignment of package payrolls and administrative management fundings to State administrative agencies, and the Government’s Decree No. 10/2002/ND-CP of January 16, 2002 on the financial regime applicable to non-business units having revenues.

6. The charge and fee portions remitted into the State budget shall be distributed to the budgets at various levels and shall be managed and used under the provisions of the State Budget Law and documents guiding the implementation thereof.

For those charges belonging to the State budget but their collected amounts are reinvested by the State in the collecting organizations (apart from the contents specified at Point 4b of this Section like school fees, hospital charges…), the management and use thereof must ensure the re-investment purposes and comply with the current financial management regime.

D. MANAGEMENT AND USE OF COLLECTED CHARGES NOT BELONGING TO THE STATE BUDGET

Charges collected from the services not invested by the State or invested by the State but later transferred to organizations or individuals for implementation on the principles of cost-accounting, financial autonomy and self-responsibility for the collection results, are revenues not belonging to the State budget (called charges not belonging to the State budget for short).

The collected amounts of charges not belonging to the State budget shall be determined as turnover of charge-collecting organizations or individuals that have the obligation to pay tax thereon according to law provisions and have the right to manage and use the after-tax charge amounts according to law provisions.

Annually, charge-collecting organizations and individuals shall have to effect the tax settlement for collected charge amounts together with the results of other production and business activities (if any) with the tax agencies according to current law provisions on taxation.

E. CHARGE AND FEE EXEMPTION AND REDUCTION

Charge and fee exemption and reduction in a number of special cases shall comply with the provisions in Article 14 of Decree No. 57/2002/ND-CP. Specifically:

1. The registration fee exemption or reduction shall comply with the Government’s regulations on registration fees and guiding documents;

2. The exemption from and reduction of bridge and road tolls and ferry-boat fares prescribed at Items a and b, Clause 2, Article 14 of Decree No. 57/2002/ND-CP shall comply with the Finance Ministry’s separate guiding documents on bridge and road tolls and ferry-boat fares;

3. The school fee exemption or reduction for a number of subjects shall comply with the Government’s regulations on school fee, and guiding documents;

4. The hospital charge exemption or reduction for a number of subjects shall comply with the Government’s regulations on hospital charge, and guiding documents;

5. The irrigation charge exemption or reduction in some particular cases shall comply with the Government’s regulations on irrigation charge, and guiding documents;

6. For a number of cases where charge and fee exemption and reduction are extremely necessary due to the socio-economic development requirements, the situation and characteristics of each period, organizations and individuals must send written requests to the Ministry of Finance for submission to the Prime Minister for consideration and decision.

IV. FINANCE AND ACCOUNTING

A. CHARGE AND FEE COLLECTION VOUCHERS

Charge- and/or fee-collecting organizations and individuals must make and issue receipts to charge and fee payers according to the Finance Ministry’s regulations on the regime of issuance, management and use of vouchers. Specifically:

1. For charges and fees belonging to the State budget, organizations and individuals must, upon collecting charges and fees, issue receipts to charge and fee payers according to the Finance Ministry’s current regulations on the issuance, management and use of tax forms.

Where charge- and/or fee-collecting organizations and individuals aspire to use charge and fee receipts other than the generally-prescribed voucher forms, they must send written requests to competent tax agencies for settlement according to the prescribed regime.

2. For charges not belonging to the State budget, organizations and individuals must, upon collecting such charges, make and hand over invoices to charge payers according to the Finance Ministry’s current regulations on the issuance, management and use of sale invoices.

Organizations and individuals that aspire to use invoices printed by themselves must send written requests to competent tax agencies for settlement according to the prescribed regime.

3. Where such specific vouchers like stamps, tickets…with printed charge or fee amounts are used, they must be separately managed and used in an appropriate manner under the Finance Ministry’s guidance on the issuance, management and use of such specific vouchers.

4. Where they are not issued the vouchers or are issued improper ones, the charge or fee payers shall be entitled to request the collecting organizations or individuals to issue them vouchers as prescribed, or lodge complaints about or denunciations with competent State bodies for handling according to law provisions.

B. CURRENCIES USED FOR THE COLLECTION OF CHARGES AND FEES

1. Charges and fees collected in Vietnam shall be in Vietnam dong. Where it is prescribed by law that charges and fees are collected in foreign currencies, they may be collected either in foreign currencies or in Vietnam dong on the basis of conversion of the relevant foreign currency into the Vietnamese currency at the exchange rate on the inter-bank foreign exchange market announced by the State Bank of Vietnam at the time the charges or fees are collected.

2. Charges and fees collected abroad may be collected in the currencies of the host countries or in freely-convertible currencies.

3. The currency used for the payment of each specific charge or fee shall comply with the regulations in the documents prescribing the charge and fee collection which are issued by competent agencies.

C. CHARGE AND FEE REGISTRATION, DECLARATION, COLLECTION, REMITTANCE AND SETTLEMENT

Charge- and/or fee-collecting organizations and individuals must register, declare, collect, remit and settle charges and fees as follows:

1. For organizations and individuals collecting charges and fees belonging to the State budget:

a/ Within 10 days before starting to collect charges and fees, organizations and individuals must register with the local tax agencies the to be-collected charges and fees, collection places, receipt forms and the organization of charge and fee collection (form No. 1)*. Specifically:

- Centrally- and provincially-managed or equivalent-level charge- and/or fee-collecting organizations shall register with the tax departments of the provinces or centrally-run cities.

- The charge- or fee-collecting organizations managed by rural or urban districts, provincial towns, district townships, communes, wards or equivalent levels and charge- and/or fee-collecting individuals shall register with district-level tax sub-departments.

If the charge and/or fee collection is to change, terminate or halt, such must be notified to the tax agencies at least 5 days in advance.

b/ Charge- and/or fee-collecting organizations and individuals shall declare charges and fees on a monthly basis and submit the declaration forms within the first five days of the subsequent month to the tax agencies where the charge and fee collection is registered for monitoring and management. Where in a month no charge or fee is collected, declaration forms must still be completed and submitted to the tax agencies.