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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.
03/2000/TT-BTC
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Hanoi,
January 10, 2000
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CIRCULAR
GUIDING
THE MANAGEMENT AND USE OF REVENUES FROM TELEVISION ADVERTISEMENTS
Pursuant to the Prime
Ministers Decision No.605/TTg of August 31, 1996 permitting the television
branch to use revenues from advertisements for its development;
Pursuant to the Government Offices Official Dispatch No.314/VPCP of January 23,
1999 on the implementation of the Prime Ministers Decision No.605/TTg of August
31, 1996 permitting the television branch to use revenues from advertisements;
the Ministry of Finance hereby guides the management and use of revenues from
television advertisements as follows:
A. GENERAL PROVISIONS
1. After subtracting all
expenses related to advertising activities, the whole remaining advertising
turnover of the Vietnam Television Station and the local radio-television
stations (hereinafter referred to as the television stations), must be remitted
into the State budget, including:
- Value added tax (VAT)
calculated on the revenues from advertisements on television, at the tax
rate(s) prescribed by the VAT Law.
- Enterprise income tax calculated
on the taxable income at the tax rate(s) prescribed by the Enterprise Income
Tax Law.
- After-tax income.
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- Advertisement revenues
belonging the Central Budget shall be re-allocated for investment in the
Vietnam Television Station, the regional television stations and projects for
television development in mountainous, deep-lying and remote regions.
- Advertisement revenues
belonging to the local budgets shall be re-allocated for investment in the
local radio-television stations.
3. Television stations that pay
VAT and enterprise income tax in excess of the year-beginning estimates shall
get 50% of the tax amount actually paid in excess re-allocated to them to
increase their development investment.
B. SPECIFIC PROVISIONS
I. CONTENT OF ADVERTISEMENT
REVENUES AND EXPENSES:
1. Regarding the advertisement
revenues:
Revenues from television
advertising services are those generated by television stations and permitted
by the Government to be managed and used by the television branch for
investment in its development.
Television advertisement
turnover shall be calculated on the time volume for which advertisements have
been televised multiplied (x) by advertising unit prices.
Advertising charge rates: The
Vietnam Television Station shall coordinate with the Government Pricing
Committee and the Ministry of Finance in guiding the bracket of advertising
charge rates applicable to each region at the proposals of the local
radio-television stations. The radio-television stations of the provinces and
centrally-run cities shall apply advertising charge rates strictly according to
the above-said regulations, and must not arbitrarily reduce the advertising
charge rates without approval of the competent authority(ies). If advertising
brokerage commissions have already been paid, the advertising charge rates
shall not be reduced.
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2.1. Expenses in direct service
of advertising programs:
- Production of advertising
programs.
- Purchase of television
programs for broadcast in service of advertisements.
- Advertising propaganda:
expenses for printing of advertising paintings, pictures, documents and
posters.
- Commissions for customers:
shall be paid in compliance with provisions of the Ministry of Finance’s
Circular No.99/1998/TT-BTC of July 14, 1998 guiding the Government’s Decree
No.30/1998/ND-CP of May 13, 1998 detailing the implementation of the Enterprise
Income Tax Law. The commission level must not exceed 3% of the total regular
expenses (excluding incentives for laborers - if any).
- Purchase of supplies and
assets, and minor repairs: Expenses for purchase of components, supplies, film,
tapes, separate machinery and equipment, repair and regular maintenance of
equipment in service of the production of television advertising programs. The
purchase and minor repairs shall comply with the current regulations of the
State.
- Lease of spaces for
installation and repair of transmitting equipment in service of areas which are
gloomy or affected by frequency interference.
- Managerial expenses: expenses
for managerial activities of the apparatus managing advertising programs.
2.2. Expenses in support of
better quality of television programs in order to attract advertisements:
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- Hiring of satellites.
- Transmitting charges.
- Expenses for short-term
technical training courses in order to raise the professional skills of officials
and employees engaged in production of television programs.
- Allowances paid to laborers
who are engaged in the raising of quality of television programs in order to
attract advertisements. The allowance level shall be equal to from a half to
one month’s average actual wage/person/month.
2.3. The limits of expenses
related to advertising activities:
Basing itself on the current
regime and actual expenses, the Ministry of Finance shall prescribe the limits
of expenses related to the advertising activities in percentages (%) of
turnover from advertising services (without VAT) to be applicable to television
stations throughout the country within the following bracket of maximum expense
levels:
1- For a turnover of 100 million
dong or less 50%
2- From over 100 million dong to
300 million dong 48%
3- From over 300 million dong to
500 million dong 46%
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5- From over 1 billion dong to 5
billion dong 42%
6- From over 5 billion dong to
25 billion dong 40%
7- From over 25 billion dong to
70 billion dong 38%
8- From over 70 billion dong to
100 billion dong 36%
9- Over 100 billion dong 34%
3. After paying tax(es) as
prescribed by law, the concerned units shall be entitled to deduct part of the
remaining turnover to set up funds of incentives for their laborers. The
maximum deduction level shall be equal to 3 months� average actually paid basic
wages.
4. For example:
The Radio and Television Station
of province A has the following data in a year:
- Turnover from advertisements
(without VAT): 10,000 million dong.
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According to the provisions of
this Circular and the current documents, the maximum expense level, enterprise
income tax and after-tax income that must be remitted by the enterprise shall
be as follows:
- The maximum expense level of
the station: 4,000 million dong.
(10,000 million dong x 40%)
- The taxable income: 6,000
million dong.
(10,000 million dong - 4,000
million dong)
- So, the enterprise income tax
shall be: 1,920 million dong.
(6,000 million dong x 32%)
- The station shall be entitled
to pay no more than 240 million dong as incentives for its laborers
(80 million dong/month x 3
months).
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5. Annually, together with the
State budget revenue-expenditure estimates, the stations shall elaborate their
advertising service revenue and expense estimates, then send them to the
finance agencies of the same level for synthesization and report to the
competent authority for approval. Basing themselves on the approved expense
estimates, the General Director of the Vietnam Television Station and the
directors of the local radio-television stations shall have to pay expenses
strictly according to the current financial regime, with all valid vouchers as
required, and such expenses must not exceed the above-said limits.
II. FINANCIAL MANAGEMENT:
The elaboration of estimates,
allocation of funds and final settlement of advertisement revenues and expenses
shall comply with the Ministry of Finance’s Circular No.103/1998/TT-BTC of July
18, 1998 guiding the assignment of responsibilities for drafting,
implementation and settlement of the State budget and the current documents.
This Circular further guides the following contents:
1. Elaboration of
estimates:
1.1. At the local level:
Radio-television stations of the provinces and centrally-run cities shall, upon
elaborating their annual revenue and expense estimates, have to explain their
advertisement revenue sources and the contents of expenses for development
investment projects and efficiency of the use of advertisement revenues.
1.2. At the central level: The
Vietnam Television Station shall elaborate its revenue and expense estimates
and have to synthesize the advertisement revenue and expense estimates of the
entire branch, clearly explaining projects invested with advertisement revenues
according to the development planning of the units and the entire branch. It
shall also have to analyze the efficiency of the use of advertisement revenues
in the entire branch.
2. Allocation of funds:
Basing itself on the
advertisement revenue and expense estimates and the amounts actually remitted
into the State budget for advertising activities of the television stations,
after the State Treasury gives its certification thereon, the Ministry of
Finance shall allocate funds to the Vietnam Television Station, while the
provincial/municipal Finance and Pricing Services shall allocate funds to the
provincial/municipal radio-television stations.
3. Accounting and final
settlement:
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3.2. For capital construction
projects invested with advertisement revenue sources, the accounting shall be
conducted according to the provisions of the current Regulation on management
of capital construction investment.
4. Financial inspection and
supervision:
The television stations shall
have to coordinate with the Ministry of Finance, the provincial/municipal
Finance and Pricing Services and tax authorities of all levels in inspecting
the State budget collection and remittance and expenditures of such stations.
C. ORGANIZATION OF
IMPLEMENTATION
This Circular takes effect as
from 1999 and replaces the Ministry of Finance’s Circular No.81-TC/HCSN of
December 23, 1996. Any problems arising in the course of implementation shall
be reported by the concerned units to the Ministry of Finance for study and
appropriate amendments.
FOR THE MINISTER
OF FINANCE
VICE MINISTER
Nguyen Thi Kim Ngan