Circular No. 133/2015/TT-BTC guides the financial management mechanism for the Vietnam Chamber of Commerce and Industry (VCCI)

 CIRCULAR

Guidelines on the financial management mechanism for

Vietnam Chamber of Commerce and Industry

Pursuant to the State Budget Law number 01/2002/QH11 dated December 16, 2002;

Pursuant to the Law on Management and Use of State Property dated June 3, 2008;

Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

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

Pursuant to Decision No. 310-TTg dated June 29, 1993 of the Prime Minister regarding the working relationship between state agencies and the Vietnam Chamber of Commerce and Industry;

Pursuant to Decision No. 601/TTg dated August 1, 1997 of the Prime Minister promulgating the Regulation on the organization and operation of the Taiwan Relations Special Committee;

Pursuant to Decision No. 71/2011/QD-TTg dated December 20, 2011, of the Prime Minister on ensuring and supporting state budget funds for special-interest associations;

At the proposal of the Director of the Department of Corporate Finance;

Based on the consensus opinion of the Vietnam Chamber of Commerce and Industry in Document No. 1703/PTM-TC dated July 23, 2015;

The Minister of Finance hereby issues this Circular amending and supplementing certain Articles of Circular No. 133/2015/TT-BTC dated August 31, 2015, issued by the Minister of Finance guiding the financial management mechanism for the Vietnam Chamber of Commerce and Industry (hereinafter referred to as Circular No. 133/2015/TT-BTC).

The Minister of Finance issues this Circular guiding the financial management mechanism for the Vietnam Chamber of Commerce and Industry.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates the financial management mechanism applicable to the Vietnam Chamber of Commerce and Industry (hereinafter referred to as VCCI).

Article 2. Applicability

1. The VCCI headquarters in Hanoi, branches, representative offices, and affiliated non-profit units.

2. The Taiwan Relations Special Committee (hereinafter referred to as UBĐL).

Article 3. Principles of Financial Management for VCCI

1. VCCI operates under a self-financing regime and receives budgetary support from the state budget according to Decision No. 71/2011/QĐ-TTg dated December 20, 2011 of the Prime Minister on ensuring and supporting funds from the state budget for specialized associations.

2. Financial management for VCCI is clearly defined and accounted for in two types of activities:

a) Trade promotion and investment activities aimed at expanding and developing the national economy; activities pursuant to tasks assigned by the State; implementation of programs, projects, and topics approved by competent state authorities (collectively referred to as trade promotion activities).

The state budget supports funding for trade promotion activities according to plans assigned by competent state authorities.

b) Business and service activities: VCCI must ensure its own funding and comply with laws governing business and service activities.

Chapter II

MANAGEMENT AND USE OF CAPITAL AND ASSETS

Article 4. Capital of VCCI

1. VCCI's operating capital includes:

a) Capital provided by the state budget during operations; state capital received from other sources; value of assets attached to land and other amounts included in state capital according to law.

b) Additional capital from annual operational results as prescribed.

c) Other types of capital as prescribed by current laws.

2. VCCI receives annual operational funding from the state budget for the following purposes:

a) Ensuring expenditures for the Taiwan Relations Special Committee.

b) Supporting funding for trade promotion activities.

c) Supporting funding for operational activities and construction investment.

d) Other activities supported by the state budget or funded by the state budget.

Article 5. Management and use of capital and assets

1. Principles for managing and using assets:

a) For state-owned assets at VCCI, management and use shall be carried out in accordance with Articles 36 and 37 of the Law on Management and Use of State Assets and Clause 2 of Decree No. 52/2009/NĐ-CP dated June 3, 2009 of the Government detailing and guiding the implementation of certain provisions of the Law on Management and Use of State Assets.

b) For non-state-owned assets, VCCI shall manage and use them in accordance with civil laws, relevant laws, and the Charter of VCCI.

2. Contents regarding management and use of capital and assets must be specifically stipulated in the Financial Management Regulation of VCCI and in accordance with the principles set forth in Clause 1 of this Article. The Chairman of VCCI is responsible for preserving state capital and assets in accordance with the provisions of the law.

Chapter III

SOURCES OF REVENUE, EXPENSES, PROFITS AND DISTRIBUTION OF PROFITS

Section 1

SOURCES OF REVENUE AND MANAGEMENT OF REVENUE SOURCES

(Excluding UBĐL)

Article 6. Sources of Revenue

1. Revenue from promotional activities.

1.1. Sources of revenue:

a) Membership fees and association dues contributed by members.

b) Revenue from the promotional activities listed in Point 1.2, Clause 1 of this Article. Among these, the fee for issuing certificates of origin (C/O) shall be charged according to the rates prescribed by the Ministry of Finance, or according to the level of support provided by the State in cases where the policy of waiving fees is implemented.

c) Contributions, sponsorships, gifts, and donations in cash or kind from individuals and organizations for promotional activities; revenue from foreign sponsorship (under projects or individual grants).

d) Support from the State budget for implementing promotional activities.

e) Other lawful sources of revenue from promotional activities as prescribed by law.

1.2. Promotional activities conducted by VCCI:

a) Activities with promotional characteristics within the functions and tasks stipulated in the Charter of VCCI, including issuing certificates of origin for exported goods (C/O) as assigned by competent authorities;

b) Organizing receptions for foreign businesspeople and organizations visiting Vietnam to seek investment opportunities and promote trade;

c) Taking the lead in establishing and operating Vietnam Business Forums and Vietnam Business Councils with businesses from other countries as assigned by the Government;

d) Organizing business delegations accompanying Party and State leaders on overseas trips to expand international relations in trade, investment, and tourism;

e) Implementing programs, projects, and topics according to plans approved by competent state authorities;

g) Other promotional activities consistent with the functions and tasks stipulated in the Charter of VCCI and tasks assigned by competent authorities.

2. Revenue from business and service activities:

a) Revenue from selling goods; publishing books, magazines; advertising activities.

b) Revenue from selling sample certificates of origin (form C/O), service fees for certifying necessary documents in business transactions, and confirming force majeure cases. The price of form C/O and the service fee levels are decided and the responsibility for covering all incurred costs is borne by the Chairman of VCCI. At the same time, the price of form C/O must not exceed the collection rate of the agency currently providing similar services.

c) Other revenues from business and service activities consistent with the functions and tasks stipulated in the Charter of VCCI.

3. Financial activity revenue includes:

a) Revenue generated from leasing offices and other assets in accordance with the law.

b) Bank deposit interest and exchange rate differential gains as prescribed.

c) Other financial activity revenues as prescribed by law.

4. Other income: Revenue from selling tools and equipment that have been fully depreciated, damaged, or no longer needed; revenue from liquidation and sale of fixed assets (excluding state assets specified in Subpoint a, Clause 1 of Article 5 of this Circular); insurance compensation payments, increases in income from debts owed by missing debtors; fines from customers for breach of contract, and other revenues as prescribed by law.

Article 7. Management of Revenue Sources

1. Principles for Managing Revenue Sources:

The revenue sources of VCCI must be classified and tracked separately according to two activities: promotional activities and business and service activities. Financial income and other income obtained from promotional activities or business and service activities must also be classified accordingly based on these two activities.

2. Principles for Using Revenue Sources:

a) Revenue from promotional activities shall be used to implement promotional activities.

b) Revenue from business and service activities shall be used to cover costs for business and service activities.

3. Certain promotional activities under management requirements must be tracked separately, such as economic project programs, projects, and topics approved by competent state agencies. VCCI needs to have a project management department (or a project coordination department) responsible for ensuring sufficient revenue to cover activities and using revenue in accordance with this Circular and relevant current laws.

4. The management and use of revenue from issuing C/O fees shall be carried out in accordance with the current regulations of the Ministry of Finance and related legal documents.

5. The management and use of foreign aid revenue included in the state budget revenue shall be implemented in accordance with the Ministry of Finance's guidelines on the financial management system for non-reimbursable foreign aid included in the state budget revenue.

Section 2

EXPENSES AND MANAGEMENT OF EXPENSES (Excluding UBĐL)

Article 8. Costs

VCCI's expenses include all expenditures incurred for promotional activities and business and service activities, including:

1. Raw material, fuel, and consumable goods purchase costs (based on actual consumption and original cost), tool and equipment depreciation costs, fixed asset repair costs, and pre-funded large-scale fixed asset repair costs.

2. Fixed asset depreciation costs in accordance with current regulations.

3. Wages, salaries, and wage-like costs payable to employees in accordance with VCCI's Wage Regulations. The Standing Board or the Chairman of VCCI (as stipulated in VCCI's Charter) is responsible for establishing and promulgating VCCI's Wage Regulations in compliance with current laws.

4. Social insurance, health insurance, unemployment insurance, and trade union fees for employees that VCCI is required to pay according to regulations.

5. Transaction, external affairs, hospitality, marketing, promotion, and advertising costs calculated based on actual expenses and the Corporate Income Tax Law.

6. Other monetary expenses as prescribed include: tax, fee, and charge payments; severance and unemployment benefits for employees; costs for female workers; costs for healthcare, environmental protection; labor protection and work attire; meal costs for employees; costs for Party and mass organization activities at VCCI (costs outside the organizational budget funded from specified sources) and other monetary expenses.

7. The value of provisions established and losses processed in accordance with regulations.

8. Costs for implementing promotional activities as stipulated in Point 1.2 Clause 1 Article 6 of this Circular. Specific expenditure items include:

a) Costs for conducting surveys and research; collecting, disseminating information, and promoting policies and laws.

b) Costs for organizing domestic and international economic conferences, seminars, forums; meetings between state agencies and business community representatives.

c) Costs for organizing training courses for businesses.

d) Costs for organizing business delegations to study and survey foreign markets; welcoming foreign businessmen and trade delegations to Vietnam to seek investment opportunities and promote trade.

e) Costs for scientific research, publishing magazines, and other economic informational publications within promotional activities.

f) Costs for membership fees and participation in activities of international organizations.

g) For fundraising to carry out promotional activities: if necessary, hiring advisory services for fundraising, the Standing Board or the Chairman of VCCI bases on current laws to decide on advisory service costs and assumes responsibility for ensuring effectiveness when implementing.

9. Financial activity costs include: costs for leasing fixed assets; exchange rate differences losses arising from actual transactions during the period and revaluation of long-term receivables and payables denominated in foreign currency at the end of the period; losses from selling foreign currency; interest payment costs (including interest on construction loans for completed basic construction projects put into use); discounts given to buyers for early payment and other financial activity costs as prescribed by current laws.

10. Other activity costs: costs for liquidation and sale of fixed assets (remaining value and liquidation costs); penalty costs due to breach of contract; costs to collect penalties; costs for recovering difficult-to-collect debts written off from accounting records and other activity costs as prescribed by current laws.

Article 9. Management of expenses

1. Principles of expense management:

a) Expenses must be classified and tracked separately according to two activities: promotional activities and business and service activities. Financial activity costs and other activity costs arising from promotional activities or business and service activities must also be classified accordingly for these two activities.

b) For common expenses for both promotional activities and business and service activities, VCCI shall allocate them appropriately based on the characteristics of VCCI's operations. The criteria and methods of allocation must be implemented consistently and stably, as specified in detail in the Financial Management Regulations of VCCI, and the Chairman of VCCI is responsible for this content.

2. Management measures:

VCCI must strictly manage expenses through establishing, issuing, and organizing the implementation of economic and technical norms that are suitable with the economic and technical characteristics, organizational management models, and equipment levels of VCCI. These norms must be disseminated to those who implement them and publicly announced to all staff members within the agency to ensure their implementation and supervision.

Section 3

PROFIT AND DISTRIBUTION OF PROFIT

Article 10. Profit

The profit realized in a year by VCCI is formed from:

1. Profit from business and service activities.

2. Revenue and expenditure difference of promotional activities, determined based on the total revenue realized in the year and the total expenditure realized in the year of promotional activities but excluding:

a) Revenue and expenditure from state budget funds and funds with a state budget origin.

b) Unspent sponsored revenue that must be returned or transferred to the next year for spending according to an agreement with the sponsor.

Article 11. Distribution of profit

After covering previous years' losses according to the Enterprise Income Tax Law, setting aside the Science and Technology Development Fund as required by law, and paying enterprise income tax, the remaining profit of VCCI in a year shall be distributed as follows:

1. Covering previous years' losses that have exceeded the allowable deduction period before tax.

2. The remaining profit shall be distributed as follows:

a) Allocating a minimum of 30% into VCCI's Development Investment Fund;

b) Allocating into VCCI's Reward and Welfare Fund: the amount allocated to each fund is decided by the VCCI Standing Board, with the total amount allocated to both funds not exceeding three months of average salary, wages, and other income for the year, provided there is no overdue debt and the ability to pay maturing debts is at least 0.5;

c) The remaining profit after allocating according to the provisions of points a and b of this Clause shall continue to be added to VCCI's Development Investment Fund.

Article 12. Use of funds

1. Science and Technology Development Fund: The establishment, management, and settlement of its use shall comply with current State regulations.

2. The Development Investment Fund shall be used for investment in fixed assets of VCCI, and its management and use shall comply with current regulations.

3. The Reward Fund is used for:

a) Year-end or regular bonuses based on labor productivity and work performance for VCCI's staff; Special bonuses for individuals and groups of VCCI with innovative improvements in technology, procedures, and business plans that yield high economic benefits. The bonus level is decided by the VCCI Chairman after consulting with the VCCI Trade Union.

b) Bonuses for individuals and groups outside VCCI who have made significant contributions to business activities and management, bringing benefits and results to VCCI's operations. The bonus level is decided by the VCCI Chairman after consulting with the VCCI Trade Union.

4. The Welfare Fund is used for:

a) Investing in building or repairing welfare facilities of VCCI. Contributing part of the capital to invest in joint welfare facilities with other units according to contracts.

b) Spending on welfare activities for VCCI's workforce.

c) Using part of the Welfare Fund to provide emergency assistance to workers, including retirees, those who are incapacitated, or those in difficult circumstances without support or engaged in charitable work.

The use of the Welfare Fund is decided by the VCCI Chairman after consulting with the VCCI Trade Union.

5. The establishment and use of the above funds must be transparent according to financial disclosure regulations, grassroots democracy regulations, and State regulations.

6. The entire balance of the financial reserve fund shall be transferred to VCCI's Development Investment Fund for use as stipulated in this Circular.

Section 4

THE COUNCIL FOR TAIWAN AFFAIRS

Article 13. Sources of Revenue for the Taiwan Relations Board (UBDL)

1. Annual state budget allocation in accordance with Article 7 of Decision No. 601/TTg dated August 1, 1997, issued by the Prime Minister on the organizational operation regulations of the specialized board responsible for relations with Taiwan.

2. Financial contributions from domestic and international individuals and organizations to the UBDL; any year-end surplus shall be carried over to the following year for use.

3. Other lawful sources of funding as prescribed by law.

Article 14. Expenditure for the Activities of the UBDL

1. Content of expenditure:

a) Payment of salaries, social insurance, health insurance, and union dues for UBDL office staff according to the stipulated regulations.

b) Allowance for responsibility for part-time members of the UBDL.

c) Payment for renting premises, purchasing working equipment, and other expenses serving the activities of the UBDL office.

d) Expenses for outbound and inbound delegations serving the activities of the UBDL as assigned by the Prime Minister.

e) Other expenditures for activities within the functions and responsibilities of the UBDL and in compliance with legal provisions.

2. Budgetary Regulations:

a) Expenditures for activities must be based on plans approved by the competent authority and implemented in accordance with current financial expenditure regime regulations applicable to administrative and public service units.

b) For activities funded by domestic and international individuals and organizations, the content and expenditure standards according to the plan must be approved by the Chairman of the UBDL and must ensure compliance with the specific funding objectives (if any).

Chapter IV

ACCOUNTING REGIME, AUDIT, REPORTING, AND FINANCIAL TRANSPARENCY

REPORT AND FINANCIAL DISCLOSURE

Article 15. Accounting System

1. The accounting system applied to the Vietnam Chamber of Commerce and Industry (VCCI) is the enterprise accounting system.

2. The accounting system applied to the UBDL is the administrative and public service accounting system.

Article 16. Reporting, Inspection, Audit of Financial Reports

1. VCCI is subject to inspection, audit, supervision by state agencies with jurisdiction in accordance with current regulations.

2. The fiscal year and accounting period run from January 1 to December 31 each year. VCCI is responsible for organizing quarterly and annual accounting inspections and financial reports for subordinate units. At the end of each quarter and year, VCCI must prepare, present, and submit financial statements and statistical reports as required by law. The Chairman of VCCI is legally responsible for the accuracy and truthfulness of these reports.

3. Financial reports (Balance Sheet; Income Statement; Cash Flow Statement; Notes to the Financial Statements) and Final Accounts Report on State Budget (excluding construction investment funds from the state budget and aid funds from state budget revenue) after being audited in accordance with Clause 4 of this Article must be submitted to the Ministry of Finance (Enterprise Financial Department, State Budget Department) no later than September 30 of the year following the reporting year.

4. Audit:

a) The financial reports and final accounts report on state budget funds of VCCI must be audited by an independent auditing organization operating legally in Vietnam. The signing of the audit contract, cooperation in implementation, and utilization of audit results shall comply with Vietnamese auditing standards and current state regulations.

b) In cases where VCCI's reporting year is included in the National Audit Office's audit plan, it is not mandatory to follow the provisions set out in point a above.

Article 17. Regulations on the application of construction investment funds and grants from state budget sources

For construction investment funds from the state budget and non-reimbursable foreign aid included in state budget revenue, VCCI shall implement accounting, statistical, inspection, auditing, and financial reporting regimes in accordance with current laws governing basic construction investment management and state financial management for non-reimbursable foreign aid included in state budget revenue.

Article 18. Public Financial Reporting

VCCI shall publicly announce financial reports in accordance with the regulations stipulated in Circular No. 171/2013/TT-BTC dated November 20, 2013, issued by the Ministry of Finance, guiding the public disclosure of financial information as prescribed in Decree No. 61/2013/NĐ-CP dated June 25, 2013, of the Government.

Chapter V

ESTABLISHING BUDGETS, ALLOCATING, ISSUING AND SETTLING

STATE BUDGET FUNDS

Article 19. Establishing Plans and Allocating State Budget Funds for Support

1. Annually, VCCI shall establish a budget plan for financial revenues and expenditures for activities supported by the state budget based on the provisions set out in Clause 2, Article 4 of this Circular, and submit it to the Ministry of Finance (for regular expenses), the Ministry of Planning and Investment (for construction investment expenses), and relevant ministries and specialized agencies (for program and project expenses) for consideration and allocation based on annual budget balance and the provisions of the State Budget Law, guiding documents for the State Budget Law, and related documents.

a) Administrative management expenses: The state budget ensures funding for the operations of the Management Board and partially supports the operational costs of VCCI's promotional activities as prescribed by law.

b) Economic public service expenses: The state budget provides maximum support not exceeding 50% of the total cost of implementing each economic public service project. The specific contents and levels of expenditure for each activity within the project must be established according to standards and norms set forth in current financial expenditure regulations.

c) Expenses for implementing programs, topics, and projects assigned by authorized agencies within regular expense budgets: The state budget guarantees or partially supports the implementation costs as stipulated in legal documents guiding the execution of programs, topics, and projects.

d) Expenses for organizing business delegations accompanying Party and State leaders on overseas trips: The objects, contents of expenses, and state budget support norms are regulated in Decision No. 123/2009/QĐ-TTg dated October 15, 2009, of the Prime Minister on the issuance of regulations for organizing overseas trips by the Prime Minister and Deputy Prime Ministers, and Circular No. 120/CP-KTTH dated January 20, 2004, of the Government regarding support for trade promotion for business delegations accompanying Party and State leaders on overseas trips.

4. In cases where it is necessary to expand promotional activities, strengthen material and technical foundations, or seek additional support due to difficulties arising during the implementation of assigned tasks, VCCI shall report to the Ministry of Finance (for regular expenses) and the Ministry of Planning and Investment (for construction investment expenses) for consideration and resolution within their authority, or consolidate and report to the Prime Minister for consideration and decision on supplementary support funds and other conditions from the state budget.

1. For financial resources supporting regular expenditures and other support expenditures: allocate through payment orders.

a) Based on the budget for regular expenditures assigned and the progress of activities, every two months, VCCI prepares an estimate of state budget funds to be used during the period and submits it to the Ministry of Finance for review and advance allocation of funds.

b) For extraordinary and non-recurring financial support resources and those with independent event characteristics: allocation shall be carried out at the time of occurrence.

c) For financial support resources with separate guidance documents: allocation shall be carried out according to such separate guidance documents.

2. For investment construction financial resources: withdraw the budget estimate from the State Treasury in accordance with regulations.

Article 21. Audit of Final Accounts of State Budget Resources

1. On the basis of the Financial Report and the Final Account Report of the State Budget of VCCI submitted in accordance with Clause 3, Article 16 of this Circular, the Ministry of Finance (Enterprise Financial Department, State Budget Department) will coordinate with VCCI to conduct the audit of final accounts of the State Budget and issue an Audit Notification in accordance with the State Budget Law and current guiding documents.

2. Based on the Audit Notification of the Final Accounts of the State Budget:

a) The Ministry of Finance will coordinate with VCCI to organize the recovery of unused or unaccounted-for state budget resources that have been allocated; record revenue and expenditure of the state budget for sources of funds subject to recording revenue and expenditure.

b) For state budget resources transferred to the next year under the system, VCCI has the responsibility to monitor, manage, and use them in compliance with the provisions of the State Budget Law and related guiding documents.

3. The final account of investment construction financial resources of VCCI shall be implemented in accordance with current laws governing the management of basic construction investment.

Article 22. Financial Resources from Aid within State Budget Revenue

Planning financial activities, confirming aid, managing and using, and recording revenue and expenditure of financial resources from aid within state budget revenue of VCCI shall be carried out in accordance with current laws governing the management of state financial resources for non-refundable foreign aid within state budget revenue.

Chapter VI

IMPLEMENTING PROVISIONS

Article 23. Effective Date

1. This Circular takes effect from October 20, 2015, replacing Circular No. 14/1999/TT-BTC dated February 3, 1999, of the Ministry of Finance on the financial management system for the Vietnam Chamber of Commerce and Industry.

2. During implementation, if there are any difficulties, please promptly report to the Ministry of Finance for study and resolution./.