Joint Circular No. 127-TT/LB on depositing into the State Treasury profits, basic depreciation funds, and other amounts that state-owned trading enterprises must pay to the state budget.

CIRCULAR

BASED ON THE GENERAL PROVISIONS OF THE "REGULATIONS ON THE SUBMISSION OF PROFITS AND BASIC DEPRECIATION FUNDS OF STATE ENTERPRISES" ISSUED BY THE PRIME MINISTER'S OFFICE UNDER DECREE NO. 132-TTg ON APRIL 4, 1957, THE DEPOSIT OF PROFITS, BASIC DEPRECIATION FUNDS, AND OTHER AMOUNTS THAT STATE TRADING ENTERPRISES MUST SUBMIT TO THE STATE BUDGET ARE TO BE SUBMITTED MONTHLY BY THE MINISTRY OF TRADE AND SPECIALIZED JOINT STOCK COMPANIES IN TWO INSTALLMENTS PER MONTH; QUARTERLY AND ANNUALLY, THEY ARE TO BE SETTLED BASED ON ACTUAL RESULTS.

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OVER THE PAST YEAR, IMPLEMENTING THE PLAN-BASED SUBMISSION METHOD, WE HAVE ENCOUNTERED MANY DIFFICULTIES DUE TO THE LARGE NUMBER AND SCATTERING OF STATE TRADING ENTERPRISES ACROSS THE COUNTRY, WITH EACH ENTERPRISE BEING RELATIVELY SMALL IN SCALE AND THE OPERATIONAL SITUATION OF THE STATE TRADING SECTOR CHANGING RAPIDLY, WHICH OFTEN LEADS TO INACCURATE AND UNTIMELY PLANNING AND AGGREGATION FROM PROVINCE JOINT STOCK COMPANIES UP TO SPECIALIZED JOINT STOCK COMPANIES AND THE MINISTRY OF TRADE.

THEREFORE, IMPLEMENTING THE PLAN-BASED SUBMISSION METHOD AT THE SPECIALIZED JOINT STOCK COMPANY LEVEL HAS RESULTED IN SOME ENTERPRISES SUBMITTING MORE THAN THE ACTUAL AMOUNT THEY SHOULD HAVE SUBMITTED, CAUSING A SHORTAGE OF WORKING CAPITAL AND INSUFFICIENT FUNDS FOR IMPLEMENTING THE COMMODITY CIRCULATION PLAN; OR CONVERSELY, SOME ENTERPRISES SUBMITTING LESS THAN THE ACTUAL AMOUNT THEY SHOULD HAVE SUBMITTED, WHICH ALSO LEADS TO THE BLOCKAGE OF STATE FUNDS AND OBSTACLES TO THE IMPLEMENTATION OF ECONOMIC ACCOUNTING SYSTEMS. IN SOME CASES, BECAUSE THE PLAN DID NOT ANTICIPATE THE SITUATION, IT WAS SET WITH A PROFIT TARGET, BUT THE ACTUAL RESULT WAS A LOSS: IN SUCH CASES, NOT ONLY IS THE LOSS NOT TIMELY COVERED, BUT PART OF THE WORKING CAPITAL IS ALSO SUBMITTED TO THE TREASURY, NEGATIVELY IMPACTING THE BUSINESS OPERATIONS OF STATE TRADING ENTERPRISES. CURRENTLY, STABILIZING PRICES AND REFORMING PRIVATE TRADE IS A HEAVY TASK FOR THE STATE TRADING SECTOR; IT IS NECESSARY TO HAVE RATIONAL MEASURES AND A TRUE COMMITMENT TO RESOLVE THE SITUATION OF PROFITS AND LOSSES OF TRADING ENTERPRISES AT ALL LEVELS. STATE TRADING ENTERPRISES AT ALL LEVELS ARE BEGINNING TO IMPLEMENT ECONOMIC ACCOUNTING, AND PROVINCE JOINT STOCK COMPANIES AND SOME UNITS UNDER SPECIALIZED JOINT STOCK COMPANIES HAVE CALCULATED THEIR PROFITS AND LOSSES. IN LIGHT OF THIS SITUATION, AFTER CONSULTATION WITH THE PRIME MINISTER'S OFFICE, THE JOINT MINISTRIES DECIDE TO REVISE THE SUBMISSION METHOD OF STATE TRADING ENTERPRISES' FUNDS TO THE TREASURY: CHANGING FROM THE PLAN-BASED SUBMISSION METHOD TO THE ACTUAL SUBMISSION METHOD. THIS REVISION AIMED TO PROVIDE STATE TRADING ENTERPRISES WITH ADDITIONAL CONDITIONS TO FACILITATE BUSINESS OPERATIONS, ENSURE THE COMPLETION OF THE HEAVY TASKS OF THE STATE TRADING SECTOR IN STABILIZING PRICES AND REFORMING PRIVATE TRADE, WHILE IMPLEMENTING ECONOMIC ACCOUNTING, STRIVING TO EXPAND COMMODITY CIRCULATION, ACCELERATE CAPITAL TURNAROUND, REDUCE COMMODITY CIRCULATION COSTS, AND INCREASE STATE CAPITAL ACCUMULATION.

THE GENERAL PRINCIPLE OF THIS METHOD IS: SUBMIT ONLY IF THERE IS A PROFIT, DO NOT SUBMIT IF THERE IS NO PROFIT, SUBMIT THE ACTUAL PROFIT AMOUNT WITHOUT OVERSUBMITTING OR UNDERSUBMITTING; IF THERE IS A LOSS, IT WILL BE COVERED AFTER A SUITABLE REVIEW PROCESS.

BASED ON THESE PRINCIPLES, THE FOLLOWING SPECIFIC REGULATIONS ON THE SUBMISSION OF PROFITS, BASIC DEPRECIATION FUNDS, AND OTHER AMOUNTS THAT STATE TRADING ENTERPRISES MUST SUBMIT TO THE STATE BUDGET ARE ESTABLISHED.

GENERAL PRINCIPLES

I. SUBMITTING UNITS

1. FOR CENTRAL SPECIALIZED JOINT STOCK COMPANIES, THE PRIMARY WHOLESALE STATIONS AND DIRECTLY SUBORDINATE MANUFACTURING WORKSHOPS THAT HAVE IMPLEMENTED THE ECONOMIC ACCOUNTING SYSTEM SHALL BE THE SUBMITTING UNITS. AS FOR PRIMARY WHOLESALE STATIONS, DIRECTLY SUBORDINATE WORKSHOPS, AND OTHER BUSINESS DEPARTMENTS THAT HAVE NOT YET IMPLEMENTED THE ECONOMIC ACCOUNTING SYSTEM, THE SPECIALIZED JOINT STOCK COMPANY SHALL ASSUME THE RESPONSIBILITY FOR AGGREGATING AND SUBMITTING TO THE TREASURY.

2. FOR PROVINCE AND CITY JOINT STOCK COMPANIES AND AUTONOMOUS ZONE JOINT STOCK COMPANIES, THE SPECIALIZED JOINT STOCK COMPANIES, DIRECTLY SUBORDINATE STORES, AND DIRECTLY SUBORDINATE MANUFACTURING WORKSHOPS THAT HAVE IMPLEMENTED THE ECONOMIC ACCOUNTING SYSTEM SHALL BE THE SUBMITTING UNITS.

3. REGARDING STORES AND MANUFACTURING WORKSHOPS BELONGING TO PRIMARY WHOLESALE STATIONS OR PROVINCE AND CITY JOINT STOCK COMPANIES, WHETHER THEY HAVE IMPLEMENTED THE ECONOMIC ACCOUNTING SYSTEM OR NOT, THE PROFITS, BASIC DEPRECIATION FUNDS, AND OTHER AMOUNTS THAT THESE STORES AND WORKSHOPS MUST SUBMIT TO THE STATE BUDGET SHALL BE AGGREGATED AND SUBMITTED TO THE TREASURY BY THE PRIMARY WHOLESALE STATION OR THE PROVINCE AND CITY JOINT STOCK COMPANY AND AUTONOMOUS ZONE JOINT STOCK COMPANY. IF THERE ARE LARGE STORES OR MANUFACTURING WORKSHOPS THAT HAVE ALREADY IMPLEMENTED THE ECONOMIC ACCOUNTING SYSTEM, THE PRIMARY WHOLESALE STATION OR THE PROVINCE AND CITY JOINT STOCK COMPANY AND AUTONOMOUS ZONE JOINT STOCK COMPANY MAY REQUEST APPROVAL FROM THE PROVINCE AND CITY DEPARTMENT OF TRADE, AND IF AGREED BY THE DEPARTMENT OF TRADE AND FINANCE, THEN THESE STORES OR WORKSHOPS CAN BE CONSIDERED AS SUBMITTING UNITS.

4. ALL SUBMITTING UNITS LISTED ABOVE, REGARDLESS OF THE LOCAL TREASURY WHERE THEY SUBMIT, MUST BE RECORDED AS SUBMITTING TO THE CENTRAL BUDGET.

3. For retail stations and processing workshops under Level I wholesale stations or under provincial or municipal companies, regardless of whether they implement economic accounting systems or not, the profits, basic depreciation funds, and other amounts that such retail stations and workshops must remit to the State Budget shall be consolidated and submitted to the state treasury by the Level I wholesale station or the provincial or municipal company. If there are relatively large retail stations or processing workshops that have already implemented economic accounting systems, the Level I wholesale station or the provincial or municipal company may propose to the Provincial or Municipal Commerce Department for consideration; if the Provincial or Municipal Commerce Department agrees, after obtaining the consent of the Provincial or Municipal Finance Department, such retail stations or workshops shall also be considered as units making payments.

4. All payment-making units mentioned above, regardless of which local treasury they make payments to, shall record their payments as being made to the Central Budget.

5. State-owned Trading Corporations and Departments, regardless of whether their subordinate units implement economic accounting systems or are recognized as budget contributors, must still base themselves on state regulations to be responsible for preparing and consolidating various types of planning tables (including national economic plans and financial revenue and expenditure plans) and accounting reports, then submit them within the prescribed deadlines to the Ministry of Trade and relevant agencies (Corporations submit to the State Planning Commission, Ministry of Finance, and the Central Bank of Vietnam; Departments and Offices of Trade submit to administrative committees, provincial and municipal State Planning Commissions, Financial Departments, and local branches of the Central Bank). In terms of basic construction, Corporations and Provincial and Departmental Offices of Trade must also submit additional plans and reports to the Construction Bank. The Ministry of Finance may, after consultation with the Ministry of Trade, stipulate that certain Departments and Offices of Trade and key enterprises submit plans and reports directly to the Ministry of Finance. From now on, first-level wholesale stations and Hanoi, Haiphong, and Nam Dinh Provincial Offices of Trade will also submit to the Ministry of Finance.

II. BASIS FOR SUBMISSION AND TIME OF SUBMISSION

1. Profits, basic depreciation, and other amounts payable shall be based on actual figures recorded in the final accounts report of the contributing entity (after deducting enterprise bonus funds as prescribed by the state), without overpayment or underpayment.

2. Contributing entities must submit profits monthly and basic depreciation quarterly. For entities that prepare monthly final accounts reports, submission shall be based on the figures in such reports; if, due to special reasons, the monthly final accounts report cannot be completed on time, the entity must submit according to the actual figures from the previous month at the time of submission; once the final accounts report is completed, adjustments will be made, with additional payments required if insufficient, and refunds provided if overpaid. For entities that have not yet achieved monthly final accounts reporting, during the first two months, each month they must submit one-third of the actual figures from the previous quarter; by the third month, after completing the quarterly final accounts report, adjustments will be made based on actual figures for the quarter, with additional payments required if insufficient, and refunds provided if overpaid. In exceptional cases where submitting based on the previous quarter's actual figures would result in significant discrepancies compared to the current quarter, the contributing entity may request the Provincial or Municipal Trade Departments and Financial Departments to estimate a more accurate amount to be submitted for the month; after receiving the quarterly final accounts report, adjustments will be made, with additional payments required if insufficient, and refunds provided if overpaid. If, due to special reasons, the quarterly final accounts report is delayed and the submission deadline has been reached, the third month's submission must be based on the second month's required payment amount, and adjustments will be made once the quarterly final accounts report is completed.

3. Regarding monthly profits, the submission deadlines are as follows: First-level wholesale stations, processing workshops under State-owned Trading Corporations, and city companies must submit before the 5th day of the following month. Professional companies under provincial departments must submit before the 10th day of the following month. For mountainous province companies (as specified by the Ministry of Trade) due to remote locations, the submission deadline can be extended to before the 15th day of the following month. Workshops and processing units under first-level wholesale stations and provincial companies, if considered contributing entities, must submit before the 5th day of the following month. For State-owned Trading Corporations solely responsible for submitting direct business profits, monthly profits must be submitted before the 5th day of the following month. For State-owned Trading Corporations responsible for aggregating and submitting profits for first-level wholesale stations and processing workshops, monthly profits must be submitted before the 15th day of the following month. As for basic depreciation, contributing entities must submit from the 5th to before the 15th day of the following month, along with profit submissions.

4. If an entity fails to submit beyond the deadline, the Provincial or Municipal Financial Departments will notify the local branch of the Central Bank or the Basic Construction Fund Issuing Bank to convert the deposited amount in the entity’s account into the amount payable to the Treasury; if there is still a shortfall after conversion, the contributing entity must make up the difference. In cases where an entity deliberately fails to comply with this regulation, the Provincial or Municipal Financial Departments should report to the Administrative Committee and notify the Provincial or Municipal Trade Departments, or report to the Ministry of Finance and the Ministry of Trade to pursue responsibility.

5. Contributing entities must base themselves on the above submission deadlines and actual circumstances to set submission deadlines for their subordinate units to ensure that they do not exceed the submission deadline for the contributing entity to the Treasury.

6. If a contributing entity incurs losses due to business operations, the period for offsetting losses will follow the profit submission deadlines outlined above. Entities that fail to complete monthly final accounts reports in a timely manner will not be allowed to estimate loss figures for offsetting purposes, and Provincial or Municipal Trade Departments and Financial Departments will not base any offsets on estimated figures. Only after completing the final accounts report and having it reviewed can the offset for the business loss be granted.

7. The method of submitting based on actual performance aims to accommodate the difficulties faced by contributing entities when implementing economic accounting systems. Implementing this method still requires consideration in the preparation of enterprise financial revenue and expenditure plans, so contributing entities must prepare and submit accurate and timely financial revenue and expenditure plans, thereby gradually improving the level of plan management and providing a basis for evaluating business achievements at year-end.

III. OFFSETTING LOSSES

1. If a contributing entity has subordinate enterprises that incur losses, the contributing entity shall review and allocate a portion of the profits from other profitable enterprises and basic depreciation to offset these losses. After balancing profits and losses, the contributing entity must submit the remaining profits and basic depreciation to the Treasury.

If after profit adjustment the submitting unit still incurs a loss, it may request to be compensated for the loss.

2. If there are first-level wholesale stations and provincial companies within a province, city, or autonomous region that incur losses, the Department of Commerce shall review them, and after obtaining the consent of the Department of Finance and the Branch Bank of the province, city, or autonomous region, the Department of Commerce has the authority to allocate part of the profits and basic depreciation funds from profitable units to compensate for those units incurring losses.

After profit adjustment, any surplus shall be paid into the State Treasury by the submitting units.

If the entire amount of profits and basic depreciation funds from other units in the month is not sufficient to cover the losses of the loss-making units, then the Department of Finance of the province, city, or autonomous region may, on behalf of the Ministry of Finance, allocate a portion of the central budget revenues to make up the difference.

3. When adjusting losses and profits between submitting units, the accounting at the submitting unit shall be as follows:

The profits of the profitable unit being reallocated to cover losses shall still be recorded as paid to the State Treasury.

The losses compensated for the loss-making units shall be recorded as state compensation for losses.

The Departments of Commerce, Finance, and Branch Banks of the provinces, cities, and autonomous regions must base their reports on the situation of profit and loss adjustment, the situation of payments to the State Treasury, and the repayment of interest to cover losses, compiling the "Profit and Loss Adjustment Report" monthly for state-owned commercial enterprises in the province, city, or autonomous region to report to the Ministry of Commerce, Ministry of Finance, and the Central Bank for monitoring.

(attached sample form)

IV. OTHER AMOUNTS TO BE SUBMITTED TO THE BUDGET

1. Amounts of goods aid money and agricultural tax rice sales proceeds, if assigned by the Ministry of Commerce to be submitted by the General Companies, first-level wholesale stations, and provincial companies in the province, city, or autonomous region, these units must submit the full amount and on time according to the amounts and deadlines specified in the agreements between the Ministry of Commerce and the Ministry of Finance, without delay or retention for use.

2. Other amounts to be submitted to the budget shall either be handled as stipulated for goods aid money and agricultural tax rice sales proceeds mentioned above, or in accordance with the temporary regulations on the submission of profits and basic depreciation funds of state-owned enterprises issued by the Prime Minister under Decision No. 132 dated April 4, 1957.

V. AUTHORITY OVER THE SUBMISSION TO THE STATE TREASURY AND ITS RESPONSIBILITIES

1. The Ministry of Finance authorizes the Administrative Committees (Departments of Finance) of the provinces, cities, and autonomous regions to act as "authorities over the submission." These authorities have the responsibility:

a) To oversee the submission of profits, basic depreciation funds, and other amounts that state-owned commercial enterprises in the province, city, or autonomous region must pay to the state budget.

b) To monitor and inspect their financial situations.

c) To regularly report to the Ministry of Finance.

2. Authorities over the submission must frequently understand the financial situations of the submitting units in the province, city, or autonomous region and urge them to fully and timely submit to the State Treasury all amounts due to the state budget.

3. Submitting units must submit their final accounting reports on time to the authority over the submission. This authority is responsible for reviewing these reports, and when necessary, may question or request additional documentation for review, but should not overly scrutinize. Both the authority over the submission and the submitting units should cooperate and assist each other in resolving any difficulties.

4. The authority over the submission may offer suggestions to improve the financial operations of the submitting units, may request assistance from the Departments of Commerce to help the units improve, and may present opinions to the Ministry of Commerce and the Ministry of Finance regarding the financial operations of state-owned commercial enterprises.

VI. RESPONSIBILITIES OF THE BRANCHES OF THE NATIONAL BANK OF VIETNAM

The branches of the National Bank have the responsibility to assist the Departments of Finance in overseeing and urging state-owned commercial enterprises to submit profits, basic depreciation funds, and other amounts to the state budget in accordance with reality and in a timely manner.

The branches of the National Bank must strive to simplify procedures to facilitate the transfer, payment, and refund of amounts related to the transactions between state-owned commercial enterprises and the state budget. In case of any difficulties, they must discuss with the Departments of Commerce and Finance of the province, city, or autonomous region to help the units resolve them promptly.

VII. RESPONSIBILITIES OF THE GENERAL COMPANIES AND DEPARTMENTS OF COMMERCE

The General Companies and Departments of Commerce of the provinces, cities, and autonomous regions have the responsibility to specifically define the submitting units under their management, report to the Ministry of Commerce, Ministry of Finance, and the Central Bank, while also informing the Departments of Finance and Branches of the National Bank of the province, city, or autonomous region. The Departments of Commerce need to closely coordinate with the Departments of Finance and Branches of the National Bank to implement this circular, striving to avoid situations where changes in measures lead to funds remaining in enterprises without collection agencies, failing to ensure timely and on-time collection for public funds.

During implementation, if there are disagreements between the Departments of Commerce and the Departments of Finance of the province, city, or autonomous region, they should seek the opinion of the Administrative Committee of the province, city, or autonomous region for resolution. If necessary, they should report to the Ministry of Commerce and the Ministry of Finance for resolution.

VIII. THIS CIRCULAR SHALL TAKE EFFECT FROM JANUARY 1, 1959