Circular No. 01/2014/TT-BTC guides the financial management regime for lottery businesses, providing detailed regulations on the registered capital, fundraising, investment outside the business, asset management and utilization, profit distribution, financial plans, financial reports, auditing, and financial information disclosure.

CIRCULAR

GUIDELINES ON THE FINANCIAL MANAGEMENT REGIME FOR LOTTERY BUSINESS ENTERPRISES

                                     

Pursuant to Decree No. 30/2007/NĐ-CP dated March 1, 2007 of the Government on lottery business and Decree No. 78/2012/NĐ-CP dated October 5, 2012 of the Government amending and supplementing certain articles of Decree No. 30/2007/NĐ-CP dated March 1, 2007 of the Government on lottery business;

Pursuant to Decree No. 71/2013/NĐ-CP dated July 11, 2013 of the Government on state capital investment in enterprises and financial management for enterprises with 100% state-owned charter capital;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Implementing Circular No. 8308/VPCP-KTTH dated October 4, 2013 of the Government Office on issuing special financial mechanisms for lottery business activities;

At the proposal of the Director of the Department of Financial Affairs of Banks and Financial Institutions,

The Minister of Finance issues this Circular guiding the financial management regime for lottery business enterprises.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular guides the financial management regime for lottery business enterprises.

2. Lottery business enterprises shall be responsible for implementing the financial management regime in accordance with the laws on financial management for enterprises with 100% state-owned charter capital and the provisions of this Circular. In case of any discrepancy, the provisions of this Circular shall prevail.

Article 2. Applicability

1. A limited liability company for lotteries established by the People's Committees of provinces and centrally-administered cities (hereinafter referred to as lottery companies).

2. A limited liability company for electronic lotteries of Vietnam (hereinafter referred to as Vietnam Electronic Lottery Company).

3. The owner of lottery business enterprises, the state management agency for lottery business activities.

4. Related organizations and individuals.

Article 3. Explanation of Terms

1. "Lottery business enterprise" includes lottery companies and Vietnam Electronic Lottery Company.

2. "Traditional lottery tickets issued under a joint issuance mechanism" refers to lottery tickets issued jointly by lottery companies within the same region, sharing a unified set of lottery tickets throughout the regional area with a consistent prize structure, organizing a common draw and prize distribution, and allocating all prize costs and ticket printing expenses among the lottery companies according to the operational regulations of the Regional Lottery Council approved by the Ministry of Finance.

3. "Agent commission" is the amount of money that lottery business enterprises pay to lottery agents as a percentage of the value of sold lottery tickets.

4. "Tax-inclusive revenue" is the revenue from operating various types of lotteries including value-added tax and special consumption tax. Tax-inclusive revenue is used to determine the amounts for agent commissions, setting up risk reserve funds for prize payments, and supporting anti-counterfeiting measures and fake lottery ticket production.

5. "Tax-exempt revenue" is the revenue from operating various types of lotteries excluding value-added tax and special consumption tax. Tax-exempt revenue is used to determine the business results of lottery business enterprises.

6. "Actual revenue" is the tax-inclusive revenue actually generated in each province or centrally-administered city. Actual revenue serves as the basis for allocating budget revenues from operating self-select number electronic lotteries according to the provisions of this Circular.

7. "Accumulated prize expense" is the cost that Vietnam Electronic Lottery Company must bear corresponding to the accumulated prize value of self-select number electronic lottery products as stipulated in the game rules approved by competent authorities but not yet claimed by winners.

Chapter II
MANAGEMENT OF CAPITAL AND ASSETS

Article 4. Registered Capital

1. Registered capital is the necessary amount of capital that the owner commits to invest for the business tasks of lottery enterprises and is recorded in the Charter on the organization and operation of the enterprise.

2. During the course of operations, if a lottery enterprise needs to increase its registered capital, it will base this decision on objectives, tasks, development strategies, and sources of additional registered capital, and develop a plan to submit to the owner for review and approval in accordance with the law.

The methods, procedures, formalities, and authority to decide on increasing the registered capital of lottery enterprises shall be carried out according to the financial management system applicable to enterprises wholly owned by the state.

3. When determining the additional registered capital needed to serve lottery business activities, in addition to investment projects serving lottery business activities, lottery enterprises may also consider the necessary capital required to pay prizes to customers for permitted lottery products in accordance with the law.

4. Lottery enterprises are not allowed to reduce their registered capital throughout the entire process of business operations.

Article 5. Raising Capital

1. The form of raising capital, principles of raising capital, and the authority to decide on capital-raising plans of lottery enterprises shall be implemented according to the capital-raising mechanism for enterprises wholly owned by the state without changing the form of ownership.

2. Lottery enterprises are only permitted to raise capital for investment in activities directly related to lottery business operations.

Article 6. Investment Outside the Enterprise

1. Lottery enterprises can only invest outside for industries directly related to lottery business operations. Implementation of joint venture contracts with foreign partners must comply with the law based on the approval of the owner.

2. Principles, forms, limits of investment outside the enterprise, and the authority of lottery enterprises shall be carried out according to the financial management system applicable to enterprises wholly owned by the state and the Charter on the organization and operation of the enterprise.

Article 7. Management and Utilization of Capital and Assets

1. Lottery enterprises have the responsibility to manage and utilize effectively all capital and assets invested by the owner and other legitimate sources of operating capital to serve lottery business operations and activities directly related to lottery business operations in accordance with the law.

2. Matters such as investment, construction, procurement of fixed assets, depreciation of fixed assets, leasing, mortgaging, pledging of assets, liquidation, sale of fixed assets, transfer of investments made outside the enterprise, inventory management, management of receivables and payables, exchange rate differences, asset inventory, and revaluation of assets of lottery enterprises shall be carried out according to the financial management system applicable to enterprises wholly owned by the state.

Chapter III
MANAGEMENT OF REVENUE AND EXPENSES

Article 8. Revenue

The revenue of lottery enterprises includes:

1. Revenue from the operation of various types of lotteries;

2. Revenue from other business activities outside lottery business operations that are permitted by law;

3. Financial activity revenue including income items determined according to the financial management system applicable to enterprises wholly owned by the state;

4. Other income includes:

a) Other income determined according to the financial management system applicable to enterprises wholly owned by the state;

b) Income from the return of prize values of accumulated prizes of self-selected number computer lotteries that have no winners at the end of the redemption period as stipulated in the rules of the game approved by competent state management agencies.

Article 9. Principles for Revenue Recognition

1. Revenue from lottery business activities: is the total amount of money receivable arising from the sale of lottery tickets during the period from various types of lotteries permitted to operate in accordance with the provisions of the law and determined as consumed during the period.

2. Revenue from other business activities outside the lottery business activities permitted by law: is the total amount of money receivable arising from the sale of products and provision of services during the period by the lottery business enterprise.

3. Financial activity revenue: shall be recorded as revenue when economic activities occur, regardless of whether payment has been received or not.

4. Other income: shall be recorded as revenue when there is evidence that customers have accepted payment, regardless of whether payment has been received or not.

Article 10. Costs

In addition to expenses determined as expenses related to business operations under financial management regulations for state-owned enterprises holding 100% of the charter capital, lottery business enterprises are allowed to include certain specific expenses in deductible costs when determining corporate income tax as follows:

1. Prize payout expenses:

a) For traditional lotteries, hand-made lotteries, and instant result lotteries: Prize payout expenses are the actual amounts paid to winners according to the legal provisions for winning lottery tickets. Specifically, for traditional lotteries issued under a joint issuance mechanism, prize payout expenses include:

- Actual prize payout expenses already paid for winning lottery tickets within the responsibility of the lottery business enterprise to pay out on its own as stipulated in the Operation Regulations of the Regional Lottery Construction Council;

- Actual prize payout expenses allocated to the lottery business enterprise according to the allocation ratio for winning lottery tickets within the shared responsibility of the Council as specifically provided in the Operation Regulations of the Regional Lottery Construction Council.

b) For self-selected number electronic lotteries: Prize payout expenses are the actual amounts paid to winners for winning lottery tickets and the value of accumulated prizes carried over to the next draw as specified in the Game Rules approved by the competent authority.

2. Commission expenses for lottery agents:

a) The specific commission rate for lottery agents is determined by the lottery business enterprise for each period but must ensure the principle of not exceeding 15% of the lottery ticket sales revenue of the enterprise (the value of sold lottery tickets). The commission rate for agents is clearly stated in the lottery agency contracts signed between the lottery business enterprise and the lottery agents;

b) The lottery business enterprise will only pay agent commissions to lottery agents after completing the confirmation of the quantity of lottery tickets sold by those agents during the period and ensuring that the agents have fulfilled all obligations stipulated in the agency contract with the lottery business enterprise;

c) The lottery business enterprise is responsible for withholding taxes payable by lottery agents before paying them according to current tax laws.

3. Expenses for authorizing prize payouts to winning customers:

a) The maximum fee for authorizing prize payouts to lottery agents shall not exceed 0.2% of the total value of prizes that the lottery agent has paid out under authorization;

b) The basis for expense calculation is the agency contract signed between the lottery business enterprise and the lottery agent, which must include a clause specifying the authorization for prize payouts and other supporting documents proving that the lottery agent has paid the prize to the customer;

c) Lottery agents authorized to make proxy prize payments may not charge any fees from winning customers.

4. Expenses for drawing and monitoring by the Lottery Supervisory Council:

a) Drawing expenses include venue rental fees and other expenses incurred for purchasing or renting external services for the drawing process;

Specifically, for traditional lottery tickets issued under a joint issuance mechanism, lottery business enterprises conduct joint drawings, and the drawing expenses of each enterprise are allocated according to the ratio of the lottery ticket sales volume of each enterprise compared to the total issuance volume of the region during the period. The specific determination of expenses is regulated in the Operation Regulations of the Regional Lottery Construction Council.

b) Remuneration for members of the Lottery Supervisory Council is calculated based on the allowance rate for concurrently held positions for officials and civil servants according to the regulations approved by the owner based on proposals from the Department of Finance and the lottery business enterprise. The remuneration rate is determined according to the principle of being commensurate with the content of work performed and enhancing the responsibilities of members in fulfilling supervisory tasks;

The basis for calculating remuneration for members of the Lottery Supervisory Council is the approved remuneration rate and the actual number of working days or sessions participated by the members.

5. Expenses for supporting anti-counterfeiting and anti-illegal lottery activities:

Lottery business enterprises are allowed to incur expenses for supporting anti-counterfeiting and illegal lottery activities as follows:

a) Principles for expenditure:

- Direct support to public security agencies and relevant agencies at localities or areas where business operations are conducted to carry out investigative, discovery, and handling of illegal lottery cases;

- In line with the financial capacity of the lottery business enterprise;

- Must have valid and legal invoices and supporting documents as required by law;

- Public security agencies and relevant agencies are responsible for distributing the support funds to individuals and units with achievements in a transparent manner depending on the complexity of the case, the number of people and units involved, and the duration of the investigation;

- The basis for expenditure is copies of court judgments, decisions to initiate criminal investigations, or administrative penalty decisions and receipts for fines paid.

b) Expenditure levels and total expenditure levels:

- For cases that have been brought to trial: the maximum expenditure level is 20 million VND per case;

- For administrative violation cases: the maximum expenditure shall be fifty percent of the amount of the administrative fine imposed but not exceeding five million VND per case;

- The total maximum expenditure in a fiscal year shall not exceed:

+ One percent of the total revenue from ticket sales with tax of lottery businesses operating in the Northern, Central regions and selling lottery products including computerized lottery;

+ Zero point one percent of the total revenue from ticket sales with tax of lottery businesses operating in the Southern region.

c) Based on actual conditions and the support expenditure for each case as stipulated in point b, Clause 5 of this Article, the lottery business shall submit to the owner for approval the specific content and level of support expenditure ensuring that all expenditures comply with the prescribed standards.

6. Expenditure for establishing a risk reserve fund for prize payments:

a) Types of products and principles of establishment:

- Lottery businesses are only permitted to establish a risk reserve fund for prize payments for types of lottery products allowed to operate under a fixed prize payment method as prescribed by law;

- At the time of establishment, the lottery business must not be incurring losses.

b) Conditions for establishment: When during the period of establishment, the actual prize payout ratio of the lottery business is lower than the planned prize payout ratio or the plan for each type of lottery product allowed to operate as prescribed by the Ministry of Finance. The actual prize payout ratio for the period is determined as follows:

c) Time of establishment: Lottery businesses may temporarily establish according to quarters and settle accounts at the end of the fiscal year if they meet the establishment conditions as stipulated in point b, Clause 6 of this Article;

d) The level of establishment for each type of lottery is determined by the following formula:

DP_{tt = DT x TL - TT} : The level of establishment for the risk reserve fund for prize payments for each type of lottery._{DT: Total revenue with tax of each type of lottery during the establishment period.} TL: The planned prize payout ratio during the establishment period as prescribed for each type of lottery._tt

Where:

DP_ttTT: The total actual prize payout value already paid to winning customers of each type of lottery during the establishment period, which is the responsibility of the lottery business.

e) Maximum level of establishment for the risk reserve fund for prize payments and usage of the risk reserve fund for prize payments shall be implemented as follows:

TL_kh- For lottery companies operating in the Northern and Central regions and the Vietnam Lottery Corporation, the level of establishment must ensure that the total balance of the risk reserve fund for prize payments does not exceed ten percent of the total revenue with tax of all types of lottery products allowed to establish at the time of establishment;

No._tt- For lottery companies operating in the Southern region, the level of establishment must ensure that the total balance of the risk reserve fund for prize payments does not exceed three percent of the total revenue with tax of all types of lottery products allowed to establish at the time of establishment;

- In the event that the total balance of the risk reserve fund for prize payments exceeds the limit above during the period, the lottery business must stop establishing until the balance falls below the allowable limit. Any surplus balance of the risk reserve fund for prize payments that is not used can be carried over to the next year;

- The lottery business uses the risk reserve fund for prize payments when the actual prize payout ratio during the period is higher than the planned prize payout ratio. If the risk reserve fund for prize payments is insufficient to cover the actual prize payout, the remaining actual prize payout will be included in the business expenses.

7. Expenditure on lottery tickets:

a) These expenditures include printing costs of lottery tickets based on the actual payment price with the printing entity, transportation, loading and unloading, storage costs, legitimate surcharges (if any), or contributions to joint printing costs of lottery tickets according to the regulations of the Regional Lottery Council based on economic contracts between the lottery business and the printing entity;

b) Printing costs of selection number sheets, purchasing printing paper and ink, and other related costs for computerized lottery tickets based on the actual payment price according to economic contracts between the lottery business and the supplier.

8. Expenditure on lottery ticket information and draw results broadcasting: these expenditures are for broadcasting draw results on radio, television, and other mass media, printing costs of leaflets about prize payout rules, draw results serving customers and agents. The basis for expenditure is economic contracts, valid invoices, and documents according to prescribed regulations.

9. Expenditure on activities of the Regional Lottery Council:

a) The contribution level for lottery businesses is a maximum of sixty million VND per year per company/council (five million VND per month). This contribution level does not include prize payment costs, draw costs, and ticket printing costs of the Regional Lottery Council issuing traditional lottery tickets under the linked issuance mechanism. The specific contribution level of each lottery business is determined by the Regional Lottery Council according to the agreement of each council;

c) In cases where the lottery business enterprise prints its own lottery tickets, the printing expenses for lottery tickets are reasonable and legitimate actual expenses incurred and recorded as general business expenses.

b) All expenditures must have reasonable and valid documentation. In cases where the Regional Lottery Council manages the expenditure, the council must agree on the expenditure standard. The Chairman of the Regional Lottery Council is responsible for the legality and validity of all expenditures. At the end of the fiscal year, settlement must be made public within the Regional Lottery Council. After settlement, any surplus can be carried over to the next year for continued use according to the specified purposes.

10. Expenditure on reception, ceremonial events, publicity and advertising, brokerage, marketing, permissible promotional expenditure, transaction costs, conference costs, and other related expenditures to the business operations of the enterprise. The expenditure ratio is implemented according to the provisions of tax laws and calculated as a percentage (%) of total costs minus prize payment costs.

a) The maximum contribution level for lottery businesses is sixty million Vietnamese dong per year per company/board (five million Vietnamese dong per month). This contribution level does not include prize payout expenses, number drawing expenses, and traditional lottery ticket printing costs under the joint issuance mechanism managed by the Regional Lottery Council. The specific contribution level for each lottery business shall be determined by the Regional Lottery Council according to the agreement of each Council;

b) All expenditures must have valid and reasonable supporting documents. In cases where the Regional Lottery Council manages the expenditure, the Council must agree on the expenditure limit. The Chairman of the Regional Lottery Council is responsible for the legality and validity of all expenditures. At the end of the fiscal year, a settlement must be made to publicly disclose within the Regional Lottery Council. After settlement, if there is a surplus, it can be carried over to the next year for continued use according to the specified purposes.

10. Reception expenses, ceremonial expenses, promotional advertising expenses, brokerage fees, marketing expenses, promotional expenses, transaction costs, conference costs, and other related expenses associated with the business operations of enterprises are permitted. The expenditure ratio is implemented in accordance with tax laws and calculated as a percentage (%) of total costs minus prize payout costs.

Article 11. Principles for Recording Costs and Managing Costs

1. Principles for Recording Costs:

a) Lottery businesses may only record in their costs expenses incurred related to business operations within the fiscal year.

b) The determination of costs for lottery businesses shall be carried out in accordance with accounting standards and current tax laws.

2. Principles for managing expenses:

a) Lottery businesses must strictly manage expenses to reduce costs and product costs in order to enhance business efficiency.

b) The management of costs for lottery businesses shall be implemented in accordance with the financial management regulations prescribed by law for state-owned enterprises with 100% state capital.

Chapter IV
PERFORMANCE OF OBLIGATIONS TO THE STATE BUDGET

OF LOTTERY BUSINESSES

Article 12. Principles for Fulfilling Obligations to the State Budget

1. The State Lottery Corporation has the responsibility to fully fulfill its obligations to the state budget in accordance with tax laws.

2. The Vietnam National Administration of Lotteries has the responsibility to comply with the provisions of Clause 1 of this Article and the following provisions:

a) Declare and settle value-added tax, special consumption tax, and corporate income tax at the headquarters. Based on the amount of tax payable under each tax category, the Vietnam National Administration of Lotteries will allocate the taxes payable to the local budget according to the actual revenue generated in each locality and issue payment receipts for the local budget in accordance with the law;

b) Deduct, declare, and settle personal income tax payable at the headquarters. The Vietnam National Administration of Lotteries will allocate personal income tax payable to the local budget and issue payment receipts for the local budget in accordance with the law based on the following criteria:

- Personal income tax on commissions paid to lottery agents for voluntary number selection: Allocate according to the actual revenue generated by lottery agents for voluntary number selection in each provincial and central city;

- Personal income tax on winners: Allocate according to the province or centrally-administered city where the individual registered to participate in the draw via telephone or internet, and the place where the lottery ticket for voluntary number selection was issued via terminal equipment;

c) In cases where the remaining profit after corporate income tax is paid into the local budget as stipulated in Point b, Clause 3, Article 14 of this Circular, the Vietnam National Administration of Lotteries will declare at the headquarters, allocate to the local budget according to the actual revenue generated in each provincial and central city, and issue payment receipts for the local budget in accordance with the law;

d) The method for determining actual revenue generated in each provincial and centrally-administered city by the Vietnam National Administration of Lotteries shall be carried out in accordance with Article 13 of this Circular;

đ) Specific guidance on declaring and paying value-added tax, special consumption tax, corporate income tax, personal income tax, and post-corporate income tax profits of the Vietnam National Administration of Lotteries as stipulated in Points a, b, c, and d of this clause shall be implemented in accordance with tax laws, tax administration laws, and directives from the Ministry of Finance.

Article 13. Determination of Actual Revenue Arising from Each Business Area of Vietnam National Lottery Corporation

1. Vietnam National Lottery Corporation shall be responsible for fully and accurately monitoring actual revenue arising in each province and centrally-administered city to serve as the basis for allocating budget revenues from lottery business operations according to this Circular and related regulations.

2. The determination of actual revenue from the business operation of lottery products offered by Vietnam National Lottery Corporation in each province and centrally-administered city shall be carried out as follows:

a) For the distribution method through terminal devices: revenue from the business operation of lottery products arises from lottery tickets sold via registered terminal machines within the administrative boundaries of each province and centrally-administered city under agency contracts signed with Vietnam National Lottery Corporation or lottery ticket sales points established by Vietnam National Lottery Corporation on the local territory.

b) For the distribution method through telephone and internet: revenue is determined based on the location where customers register their participation area when opening a lottery account in accordance with the law on lottery business operations.

Chapter V
DISTRIBUTION OF PROFITS, ALLOCATION AND USE OF FUNDS

Article 14. Distribution of Profits

After covering losses from previous years as stipulated by the Law on Corporate Income Tax, setting aside funds for scientific and technological development as required by law, and paying corporate income tax as prescribed by law, the profits of lottery businesses shall be distributed as follows:

1. Covering the losses of previous years that have exceeded the period allowed for deduction from pre-tax profit.

2. The remaining profit after deducting the provisions set forth in Clause 1 of this Article shall be distributed as follows:

a) Allocate 30% into the development investment fund.

For lottery businesses that have been adequately capitalized, no allocation into the development investment fund shall be made.

b) Allocate funds for awards, welfare, and bonuses for managerial staff.

The conditions and levels of allocation for the aforementioned funds shall be implemented in accordance with the financial management regulations for enterprises wholly owned by the State.

3. After allocating funds as provided for in Clause 2 of this Article, the remaining profit shall be decided upon by the owner, specifically as follows:

a) For lottery businesses that have not yet been adequately capitalized and whose supplementary capitalization plans have been approved by competent authorities, the remaining profit shall continue to be added to the enterprise's development investment fund to ensure adequate capitalization according to the plan approved by the owner.

Specifically, for lottery companies operated by provincial People's Committees (hereinafter referred to as Provincial People's Committee), after supplementing the development investment fund of the enterprise, the Provincial People's Committee shall be responsible for reporting to the People's Council at the same level at the nearest session about the implementation of this matter.

b) For lottery businesses that have already been adequately capitalized:

- For lottery companies operated by Provincial People's Committees: the remaining profit shall be deposited into the local budget to support the construction of important educational, healthcare, and social welfare facilities in the locality;

- For Vietnam National Lottery Corporation: the remaining profit shall be allocated to the local budget to support the construction of important educational, healthcare, and social welfare facilities in the locality as stipulated in Point c, Clause 2, Article 12 of this Circular.

4. Strictly prohibit lottery businesses from using remaining post-tax profits to pay agent commissions exceeding the maximum limit as specified in Clause 2, Article 10 of this Circular.

5. The allocation and use of the aforementioned funds must be approved by the owner and conducted transparently in accordance with financial disclosure regulations, grassroots democracy regulations, and state regulations.

Article 15. Purpose of using funds

The management, use, and settlement of funds of lottery business enterprises shall be carried out in accordance with the provisions of the laws on financial management for state-owned enterprises with 100% state capital. Specifically, regarding the reward fund, lottery business enterprises shall not use it to pay commissions to lottery agents who have already received agent commission fees as stipulated in this Circular.

Chapter VI
FINANCIAL PLAN, ACCOUNTING SYSTEM, AUDITING,

REPORTING, PUBLIC FINANCIAL INFORMATION AND INSPECTION, SUPERVISION

Article 16. Financial Plan

1. Based on the strategic orientation and development planning of the lottery business enterprise approved by the owner, the lottery business enterprise shall build a long-term business plan and financial plan consistent with the enterprise's strategic direction decided by the owner.

2. Annually, based on the long-term production and business plan, the lottery business enterprise shall build a business plan to submit to the Chairman of the company for decision-making, and for enterprises that have not yet converted according to Clause 9, Article 1 of Decree No. 78/2012/NĐ-CP, to the Board of Members for decision-making.

3. Based on the production and business plan decided by the Board of Members (for enterprises that have not yet converted according to Clause 9, Article 1 of Decree No. 78/2012/NĐ-CP) or by the Chairman of the company, the lottery business enterprise shall assess the business situation of the year reported and prepare the next year's financial plan to be submitted to the owner and the financial authority before July 31 each year.

4. The owner shall take the lead in coordinating with the same-level financial authority to review the financial plan prepared by the lottery business enterprise and provide formal comments in writing so that the lottery business enterprise can complete its financial plan. After completion, the financial plan becomes the official plan serving as the basis for the owner and the same-level financial authority to supervise, evaluate, and manage the business operations of the lottery business enterprise.

Article 17. Accounting and Statistics

1. The lottery business enterprise shall implement the accounting and statistical system in accordance with current laws, fully, timely, truthfully, accurately, and objectively reflecting all financial activities.

2. The fiscal year begins on January 1 and ends on December 31 of the Gregorian calendar.

Article 18. Financial Reports and Other Reports

1. At the end of the accounting period (quarterly, annually), the lottery business enterprise must prepare, present, and submit financial reports and statistical reports as prescribed by law. The Chairman of the Board of Members (for enterprises that have not yet converted according to Clause 9, Article 1 of Decree No. 78/2012/NĐ-CP), the Chairman of the company, and bear responsibility for the accuracy and truthfulness of these reports.

2. In addition to the financial reports prepared in accordance with the provisions of this Article, quarterly and annually, the lottery business enterprise must prepare and submit the following reports:

a) Business operation report (Form No. 01/BCXS);

b) Ticket sales report (Form No. 02/BCXS);

c) Report on the implementation of payment terms and debt guarantees of lottery agents (Form No. 03/BCXS);

d) Report on the payment of agent commissions and authorized prize payments by lottery agents (Form No. 04/BCXS);

đ) Report on the management and use of state capital and assets (Form No. 05/BCXS);

e) Report on actual revenue generated by province and city areas issuing lottery tickets and the distribution and submission of provincial budgets from the operation of lottery ticket sales by Vietnam Lottery Corporation (Form No. 06/BCXSĐT).

3. Time limit and place of submission of reports:

a) The reports specified in Clause 1 of this Article shall be sent to the owner and other agencies as stipulated in Decree No. 129/2004/NĐ-CP dated May 31, 2004, of the Government detailing the Accounting Law, no later than twenty (20) days from the end of the quarter and no later than thirty (30) days from the end of the annual accounting period;

b) The reports specified in Clause 2 of this Article shall be sent to the owner and the Ministry of Finance (Department of Banking and Financial Organization Finance) at the same time as the submission of the reports specified in point a, Clause 3 of this Article.

4. In case the Ministry of Finance requests an extraordinary report, the lottery business enterprise must prepare and submit the report as required.

Article 19. Audit, Inspection, and Public Disclosure of Financial Reports

1. The annual financial report of lottery business enterprises must be audited by an independent auditing organization legally permitted to operate in Vietnam.

2. Lottery business enterprises are subject to management, inspection, and supervision by relevant competent authorities as prescribed by law. Within fifteen (15) working days from the date of receiving the audit results of the financial report, the tax settlement report, and the inspection conclusion, the lottery business enterprise must submit the audited financial report, tax settlement report, and inspection conclusion to the owner and the Ministry of Finance (Department of Banking and Financial Organization Finance).

3. Within sixty (60) days from the end of the fiscal year, lottery business enterprises must publicly disclose their financial reports as prescribed by law.

Article 20. Responsibilities of Authorities and Lottery Business Enterprises

1. Ministry of Finance:

a) Implement the rights and obligations of the owner towards the Vietnam National Lottery Corporation as stipulated in this Circular and related laws;

b) Approve the remuneration standards for members of the Lottery Supervisory Board of the Vietnam National Lottery Corporation as prescribed in point b, Clause 4, Article 10 of this Circular;

c) Approve the levels of fund establishment and the use of remaining profits after establishing funds of the Vietnam National Lottery Corporation as prescribed in Clause 2 and Clause 3, Article 14 of this Circular;

d) Establish a financial management mechanism for lottery business enterprises.

2. Provincial People's Committees and centrally governed city People's Committees:

a) Implement the rights and obligations of the owner towards provincial lottery companies established according to this Circular and related laws;

b) Approve the remuneration standards for members of the Lottery Supervisory Board as prescribed in point b, Clause 4, Article 10 of this Circular;

c) Approve the content and expenditure level for supporting anti-counterfeit activities and lottery ticket forgery as prescribed in Clause 5, Article 10 of this Circular;

d) Approve the levels of fund establishment and the use of remaining profits after establishing funds as prescribed in Clause 2 and Clause 3, Article 14 of this Circular;

đ) Approve the handling of unused financial reserve fund balances as prescribed in Article 21 of this Circular;

e) Direct local competent authorities to conduct comprehensive inspections, audits, and supervision of lottery business enterprises in compliance with the financial management regulations stipulated in this Circular.

3. Lottery business enterprises:

a) Comply with financial management regulations as prescribed in this Circular and other related legal documents;

b) Conduct annual evaluation and classification of enterprises as prescribed by law;

c) Disclose financial information as prescribed by law;

d) Be subject to management, inspection, and supervision by the owner and relevant competent authorities as prescribed by law.

Chapter VII
IMPLEMENTATION

Article 21. Handling of Unused Financial Reserve Fund Balances

1. Unused financial reserve fund balances at the time this Circular takes effect shall be handled as follows:

a) For lottery business enterprises that have not been fully capitalized according to the decision of the competent authority: supplement the development investment fund to increase the registered capital;

b) For lottery business enterprises that have been fully capitalized: transfer to the local budget for use in constructing important educational, health, and social welfare facilities in the locality as prescribed in point b, Clause 3, Article 14 of this Circular.

2. The owner of the lottery business enterprise decides on the handling of unused financial reserve fund balances as prescribed in Clause 1 of this Article.

Article 22. Implementation organization

1. This Circular takes effect from March 1, 2014.

2. This Circular replaces Circular No. 112/2007/TT-BTC dated September 19, 2007, issued by the Ministry of Finance guiding the financial management system for lottery companies; Article 2 of Circular No. 131/2009/TT-BTC dated June 29, 2009, issued by the Ministry of Finance amending and supplementing certain provisions of Circulars No. 65/2007/TT-BTC dated June 18, 2007, and No. 112/2007/TT-BTC.

3. During the implementation process, if there are difficulties or obstacles, lottery business enterprises and related units must promptly report to the Ministry of Finance for consideration and specific guidance.