Circular No. 13/1999/TT-BTC guides the financial regime to be piloted in the Ha Tien border gate area in Kien Giang province.

 CIRCULAR

OF THE MINISTRY OF FINANCE NUMBER 13/1999/TT-BTC DATED FEBRUARY 3, 1999 GUIDING THE FINANCIAL REGIME TO BE TRIED AT THE HA TIEN BORDER GATE AREA IN KIEN GIANG PROVINCE

- Based on Decree No. 178/CP dated October 28, 1994 of the Government stipulating the tasks, powers, and organizational structure of the Ministry of Finance;

- Based on Decision No. 158/1998/QD-TTg dated September 3, 1998 of the Prime Minister regarding the application of certain policies on a trial basis at the Ha Tien border gate area in Kien Giang Province, the Ministry of Finance guides the implementation of financial regimes to be applied on a trial basis at the Ha Tien border gate area in Kien Giang Province as follows:

I. SUBJECTS AND SCOPE OF APPLICATION

Article 1. Scope of Application:

According to Article 1 of Decision No. 158/1998/QD-TTg dated September 3, 1998 of the Prime Minister, the scope of applying certain financial policies on a trial basis as stipulated in this Circular includes: To Chu Ward, Dong Ho Ward, Binh San Ward, Phao Dai Ward, and My Duc Commune in Ha Tien City, Kien Giang Province.

The above area is referred to in this Circular as the Ha Tien Border Economic Zone.

2. Recipients of incentives:

The subjects eligible for preferential financial policies stipulated in this Circular include domestic and foreign investors investing in production and business activities, and infrastructure construction in the Ha Tien Border Economic Zone in accordance with the Law on Encouraging Domestic Investment and the Law on Foreign Investment in Vietnam, specifically as follows:

a. Domestic investors include enterprises under various economic sectors established in accordance with the Law on State Enterprises, the Law on Private Enterprises, the Law on Joint Stock Companies, the Law on Cooperatives...

b. Foreign investors include foreign-invested enterprises, foreign investors participating in joint venture contracts, and overseas Vietnamese returning to invest in Vietnam according to the forms prescribed in the Law on Foreign Investment in Vietnam, and foreign investors operating outside the scope of the Law on Foreign Investment in Vietnam.

Domestic and foreign investors investing in the Ha Tien Border Economic Zone who do not form economic entities must separately account for their business activities within the zone to determine the basis for preferential treatment.

Only production and business activities conducted within the Ha Tien Border Economic Zone are eligible for preferential treatment.

3. Domestic and foreign investors who have invested in the Ha Tien Border Economic Zone before the effective date of Decision No. 158/1998/QD-TTg dated September 3, 1998 of the Prime Minister shall, from the effective date of this Circular, be entitled to shift to enjoy investment incentives as prescribed in this Circular.

II. SPECIFIC GUIDELINES

A. REGULATIONS ON LAND RENTAL FEES, WATER SURFACE RENTAL FEES, SEAWATER SURFACE RENTAL FEES; TAX PREFERENCES

1. Preferences on land rental fees, water surface rental fees, seawater surface rental fees:

Foreign investors and domestic investors investing in production and business activities, and infrastructure construction in the Ha Tien Border Economic Zone when renting land, water surfaces, and seawater surfaces from the State, in addition to enjoying existing State preferences such as exemptions and reductions, will also receive an additional 50% reduction in land rental fees, water surface rental fees, and seawater surface rental fees compared to the current rental rates applicable in the Ha Tien Border Economic Zone, in compliance with current regulations on determining rental rates for land, water surfaces, and seawater surfaces.

2. Preferences on taxes for transferring income abroad and other types of taxes:

a- Taxes for transferring income abroad:

Income obtained by foreign investors from investment activities in the Ha Tien Border Economic Zone (including tax refunds and income from capital transfers) if transferred abroad or retained outside Vietnam must be subject to a tax for transferring income abroad at a minimum rate of 5%.

b- Other types of taxes:

Other types of taxes, fees, and charges shall be implemented in accordance with current laws on taxes, the Law on Encouraging Domestic Investment (amended), the Law on Foreign Investment in Vietnam, and other relevant legal documents.

3. Procedures for enjoying investment preferences:

The procedures for requesting to enjoy investment preferences as stipulated in this Circular shall be carried out strictly in accordance with current regulations on procedures for enjoying preferences on land rental fees, water surface rental fees, and tax preferences as prescribed in current legal documents on land rental, water surface rental, and tax regimes.

B. REGULATIONS ON RAISING CAPITAL FROM DOMESTIC AND FOREIGN SOURCES

- Domestic enterprises and foreign-invested enterprises investing in production, business activities, and infrastructure construction in the Ha Tien Border Economic Zone may raise all sources of capital both domestically and internationally through appropriate forms such as bank loans, borrowing from organizations and individuals, issuing corporate bonds... in accordance with current laws to create development funds.

- The People's Committee of Kien Giang Province, within its functions, tasks, and powers, is permitted to apply appropriate forms of raising capital to build infrastructure for the Ha Tien Border Economic Zone, such as issuing special lottery tickets, reporting to the Government for permission to issue project bonds, mobilizing public labor contributions... in strict compliance with current legal regulations.

C. REGULATIONS ON MANAGEMENT OF CAPITAL INVESTED FROM THE STATE BUDGET FOR INFRASTRUCTURE CONSTRUCTION AND DEVELOPMENT IN THE HA TIEN BORDER ECONOMIC ZONE

1. Budgeting investment capital for the Ha Tien Border Economic Zone:

Annually (during the period 1999-2002), based on the approved budget revenue forecast of the Ha Tien Border Economic Zone by the People's Council of Kien Giang Province and approved by the Ministry of Finance in the annual provincial budget, the People's Committee of Kien Giang Province proposes the amount of state investment capital allocated annually through the provincial budget for the Ha Tien Border Economic Zone (details for each investment project, classified by group and prioritized) to be submitted to the Ministry of Planning and Investment and the Ministry of Finance for review.

On the basis of the state budget estimate for the Ha Tien border economic zone and the proposal of the People's Committee of Kien Giang Province, and taking into account the overall balance of the state budget annually, the Ministry of Finance determines the total amount of state budget capital to be invested annually in the Ha Tien border economic zone, but not less than 50% of the total annual revenue from the state budget on the territory of the Ha Tien border economic zone. This investment capital will be provided by the Ministry of Finance to the People's Committee of Kien Giang Province through the Department of Finance and Price of Kien Giang Province for investment in the Ha Tien border economic zone.

The Ministry of Planning and Investment will coordinate with the Ministry of Finance regarding the capital investment for each Group A project, the total investment capital, and related issues before issuing a decision to approve the investment budget for the period 1999-2002 and the annual investment budget based on the special state budget capital allocated to Kien Giang Province.

Based on the notification from the Ministry of Planning and Investment regarding the level of annual investment capital from the central budget for the Ha Tien border economic zone, the People's Committee of Kien Giang Province shall be responsible for preparing the annual investment budget usage plan by quarter and submitting it to the Ministry of Finance (no later than the 20th day of the last month of each quarter).

Based on the annual investment budget, the quarterly investment budget usage plan prepared by the locality, and the capacity of the central budget at each point in time, the Ministry of Finance will determine and notify the quarterly investment budget allocation to the People's Committee of Kien Giang Province.

The state capital investment in the Ha Tien border economic zone through the provincial budget is determined based on the annual revenue budget estimate on the territory of the Ha Tien border economic zone (excluding revenues not included in the budget balance such as school fees, medical fees, aid, and contributions from the people...), and will be reviewed the following year based on the actual revenue of the previous year to adjust the investment capital budget for the next year. Any difference between the actual revenue and the initial revenue forecast will be adjusted into the investment capital budget for the next year. This investment capital is a targeted subsidy from the central budget for the province and does not count towards the local budget expenditure responsibilities.

2. Methods of disbursement, reporting, settlement, and management of investment capital for the Ha Tien border economic zone:

According to the approved annual and quarterly investment budget usage plans, the Ministry of Finance (central budget) will allocate capital for approved investment projects through the Kien Giang provincial budget.

All central budget capital allocated to the Ha Tien border economic zone through the provincial budget must be used exclusively for constructing infrastructure facilities in the Ha Tien border economic zone according to the overall planning of the Ha Tien border economic zone approved by the competent authority and must be managed in accordance with current regulations on investment and construction management. During implementation, the locality may proactively adjust the investment capital levels among Group B and Group C projects within the approved total investment amount and report to the Ministry of Planning and Investment and the Ministry of Finance. If there is a change in the list of Group B and Group C projects, formal written agreement from the Ministry of Planning and Investment is required.

The investment capital for the Ha Tien border economic zone through the provincial budget will be reflected collectively in the monthly financial reports and annual settlement reports of the locality, but separately noted for investment projects in the Ha Tien border economic zone (including both specially allocated budget funds and funds raised by the province).

Quarterly, the province is responsible for reporting to the Ministry of Finance and the Ministry of Planning and Investment on the implementation of investment and construction, capital disbursement for each project, and at the end of the year, report to the Prime Minister (with copies sent to the Ministry of Finance and the Ministry of Planning and Investment) on the results of the entire year.

3. Management, disbursement, and settlement of investment capital for each investment project in the Ha Tien border economic zone must comply strictly with current national regulations on basic construction investment.

V. IMPLEMENTATION

This Circular takes effect from January 1, 1999. All previous financial regulations applied in the Ha Tien border economic zone that conflict with this Circular are hereby abolished.

In the course of implementation, if any difficulties arise, they should be reported to the Ministry of Finance for study and resolution.

* Note: According to Decision No. 41/2004/QĐ-BTC dated April 21, 2004 of the Minister of Finance, Point 1, Section C, Part II of this Circular has been abolished and is no longer effective 15 days after the date of publication in the Official Gazette./.