Circular No. 09/2004/TT-BTC guides the resolution of outstanding debts of non-agricultural cooperatives that have been dissolved or are operating at a loss without the ability to repay. It specifies details on debt determination, authority and organization for handling, accounting for debt write-offs, and compiling reports on the results of debt resolution.
Scope of application
Non-agricultural cooperatives that have been dissolved or are operating at a loss without the ability to repay.
Key points
- Dissolved cooperatives (including those that have dissolved themselves) will be processed for debt write-off based on dissolution decisions, notifications, and documentation proving that all debts to creditors have not been fully settled.
- Cooperatives currently operating and experiencing continuous losses for three years or more may be eligible for debt write-off if confirmed by tax authorities or district/municipal people's committees.
- The handling of debts owed to state commercial banks shall be carried out according to the guidance of the State Bank of Vietnam.
- Tax authorities and local state-owned enterprises have the authority to determine and propose debt write-offs for cooperatives, then compile reports to submit to higher levels for review and decision.
- Cooperatives currently operating must account for the written-off debt as income in the period when the debt is written off.
🌐 Social impact of this document
- Positive impact: Helps resolve the issue of outstanding debts, reducing financial burdens for cooperatives and creditors.
- Negative impact: May lead to abuse of debt write-off rights if not strictly controlled.
❓ Frequently asked questions
Which cooperatives are eligible for debt write-off?
Cooperatives that have been dissolved or are experiencing continuous losses for three years or more due to objective reasons and lack the ability to repay.
When is the deadline for completing the report on the results of debt resolution?
By September 30, 2004 at the latest.
Which agencies have the authority to determine and propose debt write-offs?
District, municipal, and township tax authorities; local state-owned enterprises.
How should the written-off debt be accounted for?
Cooperatives currently operating, upon being granted a debt write-off, must account for the written-off debt as income in the period to offset losses.
When does this circular take effect?
This circular takes effect fifteen days after its publication in the Official Gazette.
Full text
CIRCULAR
Guidelines for Implementing the Handling of Outstanding Debts
of Non-Agricultural Cooperatives
Pursuant to Decision No. 1197/QD-TTg dated November 5, 2003 of the Prime Minister on the handling of outstanding debts of non-agricultural cooperatives, the Ministry of Finance provides specific guidance as follows:
This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.
1. The subjects eligible for debt handling under Decision No. 1197/QD-TTg dated November 5, 2003 of the Prime Minister are non-agricultural cooperatives, including trading cooperatives, small-scale industrial cooperatives, comprehensive business cooperatives, aquaculture cooperatives, transportation cooperatives, construction cooperatives, and other cooperatives not covered by Decision No. 146/2001/QD-TTg dated October 2, 2001 of the Prime Minister (hereinafter referred to as cooperatives).
2. The scope of debt handling includes debts owed by cooperatives to state commercial banks, the state budget, and state enterprises arising from December 31, 1999 or earlier, which the cooperative has yet to repay.
3. Debt write-off shall only be applied to debts owed by dissolved cooperatives (including self-dissolved cooperatives); cooperatives that have converted and registered their operations according to Decree No. 16/CP dated February 21, 1997 of the Government on the conversion and registration of cooperatives and the organization of activities of the Cooperative Federation but have incurred losses and are unable to repay due to objective reasons (referred to as operating cooperatives).
Operating cooperatives that are profitable or break even (having the ability to pay) but deliberately delay repayment of debts shall have compulsory measures for debt recovery enforced in accordance with the law.
In cases where cooperatives misuse borrowed funds for improper expenditures leading to waste and loss, individual and collective responsibilities must be clearly identified and material compensation provided to creditors. If responsibility cannot be attributed, the debt shall be written off.
4. Each debt must be resolved conclusively, with the latest deadline being September 30, 2004.
II. SPECIFIC PROVISIONS
1. Basis for determining debts owed by cooperatives that are unable to repay:
1.1-For dissolved cooperatives (including self-dissolved cooperatives):
The decision or notice of dissolution issued by the authority that established the cooperative. In cases of self-dissolution, there must be a notification from the cooperative or confirmation from the authority that issued the establishment decision.
Documentation proving that at the time of dissolution, the cooperative had not fully repaid its debts to creditors: reconciliation statements confirming the debt or contracts for sale and loan settlement between the cooperative and creditors at the time of dissolution. For tax debts and other amounts payable to the state budget, the documentation is the record of tax arrears maintained by the tax authority.
Financial reports of the cooperative at the time of dissolution (if available).
Documentation proving that current creditors are still recording these unpaid debts as receivables on their accounting books.
Based on the collected documents, creditors shall verify and reconcile to implement the write-off of debts for the cooperative.
1.2-For cooperatives that have converted and registered their operations according to Decree No. 16/CP dated February 21, 1997 of the Government on the conversion and registration of cooperatives and the organization of activities of the Cooperative Federation; those that have continuously incurred losses for three years or more, with cumulative losses up to December 31, 2002, and are unable to repay due to objective reasons, the basis for determining the outstanding debts to be handled is:
Financial reports of the cooperative as of December 31, 2002, approved by the member assembly showing a loss.
Minutes of damage reports caused by fire, natural disasters, etc., confirmed by the district (county) People's Committee.
- Requests for debt write-off from the cooperative sent to creditors along with detailed lists (supported by evidence) of debts arising from December 31, 1999 to the present, which have not been settled to each creditor: state-owned enterprises, state budget.
Cooperatives submit the request for debt write-off to each creditor. Based on the cooperative's request for debt write-off, creditors shall verify and reconcile to implement the write-off of debts for the cooperative.
1.3-Handling of debts owed by cooperatives to state commercial banks: Follow the guidelines of the State Bank of Vietnam.
2. Authority and Organization for Handling Debts:
2.1-For debts owed to state commercial banks: Follow the guidelines of the State Bank of Vietnam.
2.2-For tax debts and other amounts payable to the state budget:
Based on documentation regarding the debts of dissolved cooperatives; files and documents requesting debt write-off from operating cooperatives that have incurred losses and are unable to repay due to objective reasons, the district, county, or city tax office shall review, determine, compile a list, and file a request for debt write-off to the provincial or centrally-administered municipal Tax Bureau. The Tax Bureau is responsible for reviewing, compiling, and reporting to the provincial or centrally-administered municipal People's Committee for a decision on debt write-off, the results of which will be reported to the Department of Finance for compilation and reporting to the Ministry of Finance (using Form No. 1 attached to this Circular).
2.3-For debts owed to local state-owned enterprises::
Based on documentation regarding the debts of dissolved cooperatives; files and documents requesting debt write-off from operating cooperatives that have incurred losses and are unable to repay due to objective reasons, the enterprise must conduct its own review and consider debt write-off, and report the results of the handling to the Department of Finance (using Form No. 2 attached to this Circular).
The enterprise shall account for the debt write-off of cooperative receivables in accordance with Circular No. 85/2002/TT-BTC dated September 26, 2002 of the Ministry of Finance guiding the implementation of Decree No. 69/2002/NĐ-CP dated July 11, 2002 of the Government on the management and handling of outstanding debts for state-owned enterprises.
- In cases where there is no source to reduce state capital, based on Clause 2 Section I Part B of Circular No. 85/2002/TT-BTC dated September 26, 2002 of the Ministry of Finance, the enterprise shall submit a report with supporting documents to the Department of Finance. The Department of Finance shall take the lead, coordinate with the Provincial or Centrally-Administered Municipal Cooperative Federation and relevant departments to organize reviews and compile (using Form No. 3 attached to this Circular) and report to the Provincial or Centrally-Administered Municipal People's Committee for a decision.
- In cases where a business incurs losses due to the handling of cooperative debts according to the above regulations and requires financial support to ensure operating capital, it shall be handled in accordance with the provisions of Clause d, Article 5 of Decree No. 69/2002/NĐ-CP dated July 12, 2002 of the Government and Point 2.1.4, Clause 2, Section I of Circular No. 85/2002/TT-BTC dated September 26, 2002 of the Ministry of Finance guiding the management and resolution of outstanding debts for state-owned enterprises. The enterprise must submit a report along with relevant documents to the Ministry of Finance (Enterprise Financial Department) for review and resolution.
2.4- For central state-owned enterprise debts:
Based on collected documentation regarding the debts of dissolved cooperatives; and the application documents for debt cancellation of operational cooperatives that are loss-making and unable to repay debts due to objective reasons, the enterprise must self-inspect, consider debt cancellation, and report the results (in the form number 2 attached to this Circular) to the Ministry of Finance (Enterprise Financial Department) and the direct management agency of the enterprise.
The enterprise shall account for the cancellation of cooperative receivables according to the provisions of Clause 2, Article 5 of Decree No. 69/2002/NĐ-CP dated July 12, 2002 of the Government and Circular No. 85/2002/TT-BTC dated September 26, 2002 of the Ministry of Finance guiding the management and resolution of outstanding debts for state-owned enterprises.
In cases where there is no source to reduce state capital or financial support is required to ensure operating capital, it shall be handled in accordance with the provisions of Clause d, Article 5 of Decree No. 69/2002/NĐ-CP dated July 12, 2002 of the Government and Point 2.1.4, Clause 2, Section I of Circular No. 85/2002/TT-BTC dated September 26, 2002 of the Ministry of Finance guiding the management and resolution of outstanding debts for state-owned enterprises. The enterprise must submit a report along with relevant documents to the Ministry of Finance (Enterprise Financial Department) for review and resolution.
3. Accounting for the cancellation of cooperative payable debts:
When an operational cooperative has its payable debts cancelled, the amount of the cancelled debt shall be recorded as income for the period to offset losses at the time of debt cancellation.
4Consolidated report:
Each debt must be resolved definitively, and the cancellation of the debt must be notified to the cooperative and creditors after the decision to cancel the debt is made.
The People's Committee of provinces and centrally-administered cities shall instruct the Department of Finance to consolidate reports on the resolution of cooperative debts within their jurisdiction according to Form 4 attached to this Circular; The State Bank of Vietnam shall be responsible for consolidating the results of the resolution of non-agricultural cooperative debts to state commercial banks according to Form 5 attached to this Circular; Ministries, sectors, and state-owned corporations shall consolidate the results of the resolution of cooperative debts to affiliated enterprises according to Form 6 attached to this Circular and send them to the Ministry of Finance (Enterprise Financial Department) for consolidation and submission to the Government.
The deadline for submitting consolidated reports on the resolution of cooperative debts to the Ministry of Finance is no later than September 30, 2004.
III. IMPLEMENTATION
This Circular takes effect fifteen days after its publication in the Official Gazette.
Ministries, sectors, state-owned corporations; People's Committees of provinces and centrally-administered cities shall instruct subordinate units to promptly implement the contents guided in this Circular. Any difficulties encountered during implementation should be reported promptly to the Ministry of Finance for research and resolution./.
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