Circular No. 147/2016/TT-BTC Amending and Supplementing Certain Articles of Circular No. 45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance guiding the management, use, and depreciation of fixed assets.

CIRCULAR

AMENDING AND SUPPLEMENTING CERTAIN PROVISIONS OF THE CIRCULAR NO. 45/2013/TT-BTC DATED APRIL 25, 2013 OF THE MINISTRY OF FINANCE GUIDING THE REGIME FOR MANAGEMENT, USE, AND DEPRECIATION OF FIXED ASSETS

Based on the Enterprise Law dated November 26, 2014;

Pursuant to the Law on Management and Use of State Capital for Investment in Business Operations dated November 26, 2014;

Pursuant to Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on investment of state capital in enterprises and management and use of capital and assets in enterprises;

Pursuant to Decree No. 12/2015/NĐ-CP dated February 12, 2015 of the Government detailing the implementation of the Law Amending and Supplementing Certain Provisions of Laws on Taxation and Amending and Supplementing Certain Provisions of Decrees on Taxation;

Pursuant to Decree No. 91/2014/NĐ-CP dated October 1, 2014 of the Government amending and supplementing certain articles of decrees on tax;

Pursuant to Decree No. 218/2013/NĐ-CP dated December 26, 2013 of the Government detailing and guiding the implementation of certain provisions of the Law on Corporate Income Tax;

Pursuant to Decree No. 130/2013/NĐ-CP dated December 26, 2013 of the Government on production and supply of public goods and services;

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;

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 amending and supplementing certain provisions of Circular No. 45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance guiding the regime for management, use, and depreciation of fixed assets.

Article 1. Amending and supplementing certain provisions of Circular number

1. Supplement at the end of Point d Clause 2 Article 4 is amended as follows:

"For mixed-use properties that are both used for business activities and sold or rented out according to the law, enterprises must determine and separate the portion of the property (area) intended for sale or rent, which shall not be recorded as fixed assets and shall not be depreciated. In cases where it is impossible to determine and separate the portion intended for sale or rent, the enterprise shall not record the entire property as fixed assets and shall not be allowed to depreciate it."

2. Point a Clause 1 Article 6 is amended and supplemented as follows:

"a) For tangible fixed assets, enterprises classify them as follows:"

Type 1: Buildings and structures: These are fixed assets of the enterprise formed through construction processes such as office buildings, warehouses, fences, water towers, sports fields, landscaping works, roads, bridges, railways, airport runways, wharfs, and embankments.

Type 2: Machinery and equipment: This includes all types of machinery and equipment used in business operations such as specialized machines, work equipment, oil drilling platforms, cranes, production lines, individual machines.

Type 3: Transportation vehicles and transmission equipment: This includes various transportation means such as rail, waterway, road, air, and pipeline transport, as well as transmission equipment like communication systems, electrical systems, water pipelines, conveyor belts, and gas pipelines.

Type 4: Management equipment and tools: This includes equipment and tools used in business management activities such as computers for management purposes, electronic devices, measuring and quality control equipment, dehumidifiers, vacuum cleaners, and pest control equipment.

Type 5: Long-term plantations and working animals for products: This includes long-term plantations such as coffee, tea, rubber, fruit orchards, grasslands, and working animals for products such as elephants, horses, buffalo, and cattle.

Type 6: Fixed assets that are infrastructure constructions with significant value invested by the State from the state budget and transferred to economic organizations for management, exploitation, and use:

- Fixed assets are machinery and equipment, production lines, concrete and earth structures directly serving irrigation and drainage (such as reservoirs, dams, canals, ditches); pumps with a capacity of 8,000 cubic meters/hour or more together with buildings for operation of the irrigation facilities, handed over to limited liability companies wholly owned by the State to manage and operate water conservancy projects for organizing production and supplying public services;³- Fixed assets are infrastructure constructions within industrial zones invested by the State for common use, such as internal roads, lawns, trees, lighting systems, drainage and wastewater treatment systems;

- Fixed assets are railway infrastructure, urban rail (tunnels, elevated structures, tracks).

Type 7: Other fixed assets: All other fixed assets not listed in the above six types.

3. Supplement Clause 3

"3. Fixed assets of type 6 as stipulated in Clause 2 Article 1 of this Circular, when sold or liquidated, must have the written consent of the State asset representative agency and be recorded as a reduction in the enterprise's operating capital. The net proceeds from the sale, after deducting selling and liquidation costs, shall be fully remitted to the state budget or used to increase the registered capital after obtaining written opinions from the finance agency and the State asset representative agency." Article 8 as follows:

4. Supplement at the end Clause 1 Article 9 as follows:

" - Fixed assets of type 6 as stipulated in Clause 2 Article 1 of this Circular shall not be depreciated but detailed records shall be kept of the wear and tear value of each asset and they shall not be recorded as reductions in the source of capital formation." Clause 1 Article 12 is amended and supplemented as follows:

"1. For Build-Operate-Transfer (BOT) projects and Business Cooperation Contract (BCC) projects, the period for depreciation of fixed assets is determined as the time required for the investor to recover investment costs at the project. Depreciation of fixed assets formed from the project should correspond to annual revenue in accordance with the project's fee collection period for recovery of investment costs (similar to the method of depreciation based on quantity or volume of products). The determination of the value of fixed assets formed from the project shall be carried out in accordance with the laws on basic construction investment." 1. This Circular takes effect from November 28, 2016 and applies from the fiscal year 2016. annually - Supreme People's Court;

5. - Provincial Departments of Finance, Agriculture and Rural Development, State Treasury Branches;

- File: Office, Department of State Capital. 250

Article 2. Effective Date

This Circular takes effect from November 28, 2016, and applies to the fiscal year 2016.

2. During the implementation process, if there are difficulties or obstacles, please promptly reflect them to the Ministry of Finance for research and appropriate amendments and supplements.