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THE MINISTRY
OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No. 32/1998/TT-BTC
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Hanoi, March
17, 1998
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CIRCULAR
GUIDING THE
IMPLEMENTATION OF TAX AND STATE BUDGET REMITTANCE POLICIES TOWARDS THE STATE
PUBLIC-UTILITY ENTERPRISES
Pursuant
to the tax laws and ordinances and the legal documents on the State budget
remittances currently in force;
Pursuant to Decree No.56-CP of October 2, 1996 of the Government on the State
public-utility enterprises;
The Ministry of Finance hereby guides the implementation of tax and State
budget remittance policies towards the State public-utility enterprises as
follows:
I.
OBJECTS OF APPLICATION:
Subject to this Circular are State enterprises
fully meeting the following conditions:
- Being decided as State public-utility
enterprises by 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 cities directly under the Central
Government, on the basis of the criteria defined in Articles 1 and 2 of Decree
No.56-CP of October 2, 1996 of the Government, as State public-utility
enterprises.
- Conducting public-utility activities in line
with branches and trades registered in their business licenses.
- Applying the regime of accounting books and
using accounting documents and vouchers in accordance with the current
regulations and conducting separate cost-accounting of public-utility
activities from other business activities.
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II. TAXES
AND STATE BUDGET REMITTANCES OF VARIOUS KINDS APPLICABLE TO THE STATE
PUBLIC-UTILITY ENTERPRISES
All State public-utility enterprises shall have
to register and declare taxes and State budget remittances at the tax agencies
according to the guidance of this Circular, as follows:
1. Turnover tax:
All State enterprises conducting public-utility
activities shall have to declare, register and pay the turnover tax under the
Law on Turnover Tax and the Laws on the Amendments and Supplements to a Number
of Articles of the Law on Turnover Tax.
The turnover tax exemption and reduction for the
public-utility activities as stipulated in Article 6 of Decree No.56-CP of October
2, 1996 shall be considered as follows:
a) The newly established State public-utility
enterprises, if fully meeting conditions prescribed by law, shall be considered
for tax exemption or reduction under the Law on Domestic Investment Promotion,
the Law on Turnover Tax and the Laws on the Amendments and Supplements to a
Number of Articles of the Law on Turnover Tax.
b) For State enterprises currently engaged in
public-utility activities, apart from their public-utility activities which are
temporarily exempt from the turnover tax as provided for in the Law on Turnover
Tax and the Law on the Amendments and Supplements to a Number of Articles of
the Law on Turnover Tax, the other public-utility activities, if being unable
to cover the cost of production or service supply, shall be considered for
turnover tax exemption or reduction corresponding to the loss, but not
exceeding 50% of the annual payable turnover tax amount.
In order to create grounds for considering the
turnover tax reduction according to the above said guidance, at the end of each
fiscal year, a State public-utility enterprise shall submit a dossier of tax
reduction application to the tax agency directly managing it. A dossier of tax
reduction application shall comprise:
- An application for the turnover tax reduction
clearly stating the reason(s) therefor;
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- The enterprise's annual tax final settlement
report.
The order, procedures and competence for consideration
of turnover tax reduction shall comply with the guidance in Part D, Section III
of Circular No.97-TC/TCT of December 30, 1995 of the Ministry of Finance.
2. Profit tax:
All State public-utility enterprises that have
taxable profits shall have to declare and pay the profit tax in accordance with
the Law on Profit Tax and the Law on the Amendments and Supplements to a Number
of Articles of the Law on Profit Tax.
The profit tax reduction for State
public-utility enterprises as stipulated in Point 2a, Article 5 of Decree
No.56-CP shall be considered as follows:
a) The newly established State public-utility
enterprises which fully meet conditions prescribed by law shall be considered
for tax exemption or reduction in accordance with the Law on Domestic Investment
Promotion, the Law on Profit Tax and the Law on the Amendments and Supplements
to a Number of Articles of the Law on Profit Tax.
b) A State public-utility enterprise, which is
additionally allocated capital corresponding to public-utility tasks assigned
to it and earns profits, shall be considered for profit tax reduction equal to
the amount of additionally allocated capital, but the maximum tax reduction
must not exceed 50% of the payable profit tax amount in the tax reduction year.
The procedures and order for consideration of
tax exemption and reduction:
In order to create a basis for the consideration
of tax reduction, an enterprise shall have to submit a dossier of tax reduction
application to the competent tax agency, comprising:
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- The decision approving the enterprise's additional
capital issued by the competent State agency;
- The annual financial statement and the annual
tax final settlement report of the enterprise.
Within 30 days from the date of receiving the
dossiers, the tax agency directly managing the enterprise shall have to examine
data and facts related to the profit tax reduction, then settle all cases
falling under its competence; for cases which are beyond its competence, it
shall send written comments and petitions together with the dossiers on tax
reduction application to the higher-level tax agency for consideration and
decision. The dossiers and documents on tax reduction consideration must be the
original ones, in cases where the dossiers include copies, such copies must be
certified and sealed by the concerned enterprises on each page.
The competence to consider tax reduction:
Tax agencies of all levels shall have to examine
then decide or propose the higher-level agencies to decide the tax reduction on
the case by case basis according to competence as follows:
- The directors of provincial/municipal taxation
departments shall consider and decide the tax reduction amounts of up to VND
100 million;
- The General Director of the General Taxation
Department shall consider and decide the tax reduction amounts of over VND 100
million to VND 500 million.
- The Minister of Finance shall consider and
decide the tax reduction amounts of over VND 500 million.
If an enterprise, after being given tax
reduction according to this Circular, still fails to fully acquire the approved
additional capital, the State shall consider and make additional allocation of
capital, making up for the deficit of the approved amount of additional
capital.
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The State public-utility enterprises that have
revenues collected according to the prices, price brackets or charges set by
the State without any expenses for production or services shall, after deducting
their management expenses, taxes and funds under the current regime, have to
remit the remaining revenue amount to the State budget.
The tax agency(ies) that directly manage the
enterprises shall have to urge, inspect and guide such enterprises in fulfilling
their State budget remittance obligation as prescribed by law and under this
Circular's guidance. To ensure the timely remittance of revenues into the State
budget, the tax agency(ies) directly managing the enterprises shall conduct
monthly inspection of the actual revenues and expenses of the enterprises, then
temporarily collect the difference between the revenues and the expenses for
the State budget, but the maximum temporary collection must not exceed 70% of
the determined difference.
4. Other taxes and State budget remittances
applicable to the State public-utility enterprises shall be paid in accordance
with the current law provisions.
III.
ORGANIZATION OF IMPLEMENTATION
This Circular takes effect 15 days after its
signing. The previous guidances on taxes and State budget remittances
applicable to the State public-utility, which are contrary to this Circular's
guidance, are now annulled. Any problems arising in the course of
implementation shall be promptly reported by enterprises and tax agencies to
the Ministry of Finance for study and appropriate guidance.
THE MINISTRY OF
FINANCE
VICE MINISTER
Vu Mong Giao