Circular No. 117 TC/TCT GUIDING THE IMPLEMENTATION OF Decree No. 186/CP dated December 7, 1994 OF THE GOVERNMENT ON THE COLLECTION OF TRAFFIC FEES THROUGH PETROL PRICES

CIRCULAR

Guidelines for Implementing Decree No. 186/CP

dated December 7, 1994 of the Government on the collection of traffic fees through gasoline prices

Implementing Decree No. 186/CP dated December 7, 1994 of the Government on the collection of traffic fees through gasoline prices; the Ministry of Finance provides guidance as follows:

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1. Subjects liable for traffic fees through gasoline prices:

I- SCOPE OF APPLICATION

According to Article 1 of Decree No. 186/CP dated December 7, 1994 of the Government, all types of gasoline and diesel oil imported, produced, and processed for sale to other organizations and individuals must bear traffic fees included in the selling price.

2. Types of gasoline and diesel oil not subject to traffic fees:

- Exported gasoline and diesel oil, including cases of temporary import for re-export and transit trade.

- Aviation gasoline, industrial gasoline, mazut, and fuel oil. In cases where aviation gasoline, industrial gasoline, mazut, and fuel oil are used in any form for road transport vehicles, they still must bear traffic fees as stipulated in Article 1 of Decree No. 186/CP and as detailed in this Circular.

3. Collection and payment subjects for traffic fees through gasoline prices:

Article 3 of Decree No. 186/CP dated December 7, 1994 of the Government stipulates that organizations permitted to import and process gasoline and diesel oil have the responsibility to collect and pay traffic fees into the State Budget when selling gasoline and diesel oil, including:

- Organizations directly importing and selling gasoline and diesel oil.

- Organizations receiving agency imports of gasoline and diesel oil to hand over to the entrusting organization.

- Organizations receiving agency imports and agency sales of gasoline and diesel oil.

- Organizations and individuals producing, processing, and selling gasoline and diesel oil to any entity or returning goods processed or manufactured.

- Organizations and individuals using and selling aviation gasoline, industrial gasoline, mazut, and fuel oil to run road transport vehicles.

II- AMOUNT OF COLLECTION AND METHOD FOR DETERMINING THE AMOUNT OF TRAFFIC FEES

1. The amount of traffic fees included in the selling price per liter of gasoline and diesel oil is 300 dong (three hundred dong per liter).

2. The amount of traffic fees collected through gasoline and diesel oil prices is determined as follows:

Amount of traffic fees collected

Organizations and individuals falling under the subjects of collection and payment of traffic fees through gasoline and diesel oil prices as specified in Point 3, Section I of this Circular shall be responsible for:

a. Registering and declaring with the local Tax Bureau regarding the collection and payment of traffic fees into the State Budget.

b. When selling gasoline and diesel oil to domestic organizations and individuals, immediately collect traffic fees together with the selling price of gasoline and diesel oil according to the guidelines set out in Section II of this Circular. Units must maintain separate accounting records for the collection and payment of traffic fees into the State Budget and the portion retained for use as prescribed.

c. The amount of traffic fees payable to the State Budget is determined as follows:

Amount of traffic fees payable to the State Budget (dong)

Amount of traffic fees collected

Deductible traffic fees (if applicable)

Where:

Traffic fees paid into the National Treasury are recorded in the corresponding chapter, type, item, and category, Item 31 of the State Budget's account and remitted entirely to the Central Budget.

Within the first 10 days of each month, units must settle accounts with the tax authority regarding the amount collected, the amount due, the amount paid, and the amount retained for use based on actual occurrences in the previous month.

e. The portion of traffic fees retained before being paid into the State Budget as stipulated above, units must maintain separate records to ensure proper use for the implementation of traffic fee collection and payment. Specifically, it can be used for purchasing accounting books, vouchers, declaration forms, stationery, and necessary equipment directly serving the collection and payment of traffic fees; providing bonuses to staff implementing traffic fee collection; rewarding those who perform well in traffic fee collection and payment tasks.

d. Monthly on a regular basis every ten days, the unit shall calculate and prepare the declaration to pay the traffic fee into the State Budget (according to the attached Circular model), the tax authority shall inspect and issue a notice specifying the amount due, the date for payment of the traffic fee. The unit receiving the notice must complete the procedures to pay the traffic fee into the National Treasury on the date specified on the notice.

The traffic fee paid into the National Treasury shall be recorded under the corresponding chapter, type, clause, category, item 31 of the State Budget Revenue and Expenditure Classification and shall be fully remitted to the Central Government Budget.

Within ten days at the beginning of the following month, the unit must settle accounts with the tax authority regarding the revenue collected, the amount due for payment, the amount already paid of the traffic fee, and the amount retained for use according to the actual occurrence of the previous month.

e. The portion of the traffic fee retained before being paid into the State Budget as stipulated above, the unit must establish separate books to monitor, ensuring its proper use for the implementation of collecting and paying the traffic fee. Specifically, it can be used for purchasing accounting books, vouchers, declarations, pens, necessary tools directly serving the collection and payment of the traffic fee; providing allowances to staff responsible for collecting the traffic fee; rewarding those who perform well in the task of collecting and paying the traffic fee.

2. The traffic fee collected through gasoline and diesel prices is a revenue of the State Budget, not considered as business income subject to taxation for organizations importing and processing gasoline and diesel when selling and is accounted for as follows:

- When the organization or individual referred to in point 3, Section I of this Circular sells gasoline or diesel, they shall record the amount of the traffic fee to be collected in the "Settlement with the State Budget" account (sub-item other payments, detailed traffic fee), corresponding to the debt side of the "Settlement with Purchasers" account or the "Bank Deposit" account or the "Cash" account (if collected directly by bank transfer or cash).

- Record the actual amount of traffic fee deducted (if any) when purchasing gasoline or diesel fuel from other domestic organizations or individuals on the debit side of the "Settlement with State Budget" account (other settlement sub-account, detailed traffic fees), corresponding to the credit side of the "Bank Deposit" or "Cash" account (if payment is made by bank transfer or cash).

- Record the amount of traffic fees paid to the State Treasury and the amount of traffic fees retained according to regulations on the debit side of the "Settlement with State Budget" account (other settlement sub-account, detailed traffic fees), corresponding to:

+ The credit side of the "Bank Deposit" or "Cash" account for the actual amount of traffic fees paid to the State Treasury.

+ The credit side of the "Operating Fund Source Account" (other operating fund source sub-account, detailed traffic fees) for the amount of traffic fees retained according to regulations.

- Actual expenses incurred for collecting and paying traffic fees shall be transferred and recorded on the debit side of the "Operating Fund Source Account" (other operating fund source sub-account, detailed traffic fees), corresponding to the credit side of the accounts recording costs related to the collection and payment of traffic fees.

3. Tax authorities managing units subject to traffic fee collection and payment through gasoline prices shall be responsible for:

a. Inspecting, urging, and guiding organizations and individuals subject to traffic fee collection and payment as stipulated in Article 3 of Decree No. 186/CP to register and declare traffic fee collection and payment at tax offices, ensuring that no subjects are overlooked. At the same time, they shall maintain books to track units that have registered declarations to monitor and manage traffic fee collection and payment into the State Treasury in accordance with regulations.

b. Regularly coordinating with customs authorities and local management agencies of gasoline and diesel production units to promptly compile statistics on imported diesel fuel quantities and the production quantities of each unit's gasoline and diesel fuel for monitoring and managing traffic fee collection and payment for each unit.

c. Regularly urging units to pay traffic fees into the State Treasury within the prescribed deadlines. At the beginning of the following month, they must review declaration forms and conduct on-site inspections at each unit to urge timely payment of traffic fees generated in the previous month into the State Treasury. At year-end, they shall conduct final reviews of annual traffic fee collection and payment for each unit, checking the retention and management of the portion of traffic fees retained by each unit, ensuring compliance with regulations.

d. Imposing penalties as prescribed for violations of traffic fee collection and payment regulations in accordance with this Circular.

4. Organizations and individuals purchasing gasoline and diesel fuel that have already paid traffic fees through usage prices for business operations may record these fees in cost of goods sold and circulation expenses to determine reasonable and legitimate costs for income tax purposes, or they may be recognized as reasonable and legitimate costs when settling accounts with the State Treasury (if it involves administrative or public service activities funded by the State Treasury).

IV- VIOLATION HANDLING AND REWARD.

1. Organizations and individuals subject to traffic fee collection and payment through gasoline and diesel prices who fail to register and declare traffic fee collection and payment as required or engage in false declaration or fraud regarding traffic fees shall, in addition to paying the full amount of traffic fees due as a result of such false declarations or fraud as stipulated in this Circular, also be subject to administrative penalties under tax laws as prescribed in Government Decree No. 01/CP dated October 18, 1992.

Late payment of traffic fees into the State Treasury beyond the time specified in the tax authority's notice will incur a daily penalty of 0.2% (two ten-thousandths) of the overdue amount.

In cases where organizations or individuals abuse their positions or powers to misappropriate, embezzle, or cause loss of traffic fees, they must compensate the State for the entire amount of misappropriated, embezzled, or lost traffic fees and, depending on the severity of the violation, may face disciplinary action, administrative penalties, or criminal prosecution as prescribed by law.

2. Agencies and tax officials violating traffic fee collection and payment management regulations or shielding illegal acts concerning traffic fee collection and payment shall, depending on the severity of the violation, face disciplinary action, administrative penalties, or criminal prosecution as prescribed by law.

Tax officials who negligently or intentionally mishandle matters causing losses to the payer unit or intentionally neglect matters causing losses to the State must compensate for the losses incurred and, depending on the severity of the violation, may face disciplinary action or criminal prosecution as prescribed by law.

3. Organizations and individuals who contribute to detecting cases of evading traffic fees shall be rewarded according to the reward system established by the State for the tax sector.

V - IMPLEMENTATION:

1. Organizations and individuals subject to traffic fee collection and payment through gasoline and diesel prices as stipulated in Point 3, Section I of this Circular shall be responsible for inventorying and clearly determining the quantity of gasoline and diesel fuel in stock as of December 31, 1994, to declare to the tax office and implement traffic fee collection and payment on the sale of gasoline and diesel fuel to other domestic organizations and individuals from January 1, 1995 onwards.

2. Other organizations not subject to traffic fee collection and payment through gasoline and diesel prices as stipulated in Point 3, Section I of this Circular shall, based on the actual quantity of diesel fuel in stock as of December 31, 1994, adjust the value of inventory for each liter of gasoline and each liter of diesel fuel by increasing it by 300 dong (three hundred dong per liter) to record an increase in working capital (capital belonging to the State Treasury). When purchasing gasoline and diesel fuel from import and processing organizations, they must immediately pay the traffic fees included in the gasoline and diesel fuel prices to the import and processing organizations.

3. This Circular takes effect from January 1, 1995, replacing all guiding documents for implementing traffic fee collection according to Decision No. 211/HĐBT dated November 9, 1987 of the Council of Ministers (now the Government), and other traffic fees not permitted by the Government or the Prime Minister. All previous regulations contrary to Decree No. 186/CP dated December 7, 1994 are hereby abolished.

During implementation, if there are any difficulties, they are requested to be promptly reported to the Ministry of Finance by relevant ministries, government agencies, provincial and municipal people's committees, and related sectors and units for further study and supplementary guidance.