Circular No. 25/TC-TCT guiding the implementation of Decision No. 180-TTg dated December 22, 1992 of the Prime Minister on establishing a fund to combat illegal business practices.

CIRCULAR OF THE MINISTRY OF FINANCE

for use
implementing Decision No. 180/TTg dated December 22, 1992 of the Prime Minister on establishing funds to combat illegal business practices
Implementing Decision No. 180/TTg dated December 22, 1992 of the Prime Minister on establishing funds to combat illegal business practices, the Ministry of Finance provides detailed guidance for implementation as follows:

I. OBJECTS ELIGIBLE FOR FUND ESTABLISHMENT

According to Article 1 of Decision No. 180/TTg, the agencies permitted to establish funds to combat illegal business practices (hereinafter referred to as the fund) include market management, police, customs, tax, and border guard.

II. PRINCIPLES AND SOURCES FOR FUND ESTABLISHMENT

1. Principles for establishing the fund.

The establishment of the fund is only permitted after a decision has been made by a competent state agency to impose administrative penalties or a court judgment, and there is no appeal within the time period prescribed by law. In cases where an appeal exists, the fund can only be established after the appeal has been resolved.

The fund may only be established from the proceeds obtained from selling seized goods, fines, and hidden taxes discovered and actually paid into the temporary account opened by the tax or customs authority at the treasury, and not from overdue tax payments or late payment penalties.

2. Sources for establishing the fund.

Article 2 of Decision No. 180/TTg stipulates that the sources for establishing the fund are as follows:

a. Thirty percent of the total proceeds from selling seized goods and fines, after deducting costs for investigation, verification, loading, transportation, storage, inspection, and testing of seized goods and compensation for losses due to objective reasons (if any).

b. Two percent of the amount of hidden taxes discovered and recovered from state-owned enterprises.

c. Five percent of the amount of hidden taxes discovered and recovered from other businesses and individual traders.

Total proceeds from selling seized goods and assets, according to the decision of the trial council or the court.

Specifically as follows:

Fines are the entire amount of money actually collected and reflected on valid receipts for administrative penalties.

Costs for investigation, verification, loading, transportation, storage, inspection, and testing of seized goods are deducted from the total proceeds when supported by valid receipts and consistent with current regulations. The tax authority is responsible for examining the validity of these cost receipts.

Hidden taxes discovered and recovered are additional taxes found beyond the declared tax base or annual financial statements of enterprises or outside the monthly records of the tax authority; taxes collected from short-term trading activities are not included.

III. PROCEDURES FOR DEPOSITING FUNDS INTO TEMPORARY ACCOUNTS, ESTABLISHING THE FUND, AND DISTRIBUTING AND USING THE FUND

1. Opening a temporary account at the treasury.

Tax authorities at all levels are allowed to open a temporary account at the same-level treasury to deposit and settle the proceeds from direct inspections as specified in Section 1 of this Circular (market management, police, border guards, tax).

Customs authorities alone are allowed to open a temporary account at the treasury to deposit and settle the proceeds from their direct inspections and discoveries.

2. Procedures for depositing funds and establishing the fund.

State agencies authorized to impose administrative penalties for violations of business laws must follow the procedures and formalities for imposing administrative penalties as stipulated in Articles 21, 27, and 33 of the Administrative Sanctions Law dated November 30, 1989. For the handling of seized goods listed in Directive No. 01-TTg dated October 6, 1992 of the Prime Minister,

the provisions at Points 1, 2, and 3 of Part I of Circular No. 77 TC/TCT dated December 5, 1992 of the Ministry of Finance on guiding the handling of seized goods shall apply. a. For seized goods and assets:

The file for seized goods and assets includes: receipt for temporarily holding goods and assets, decision on handling by the competent authority, receipt for collecting money (Form CTT 11), export certificate for seized goods and assets, payment receipt to the budget, auction record, decision to establish the fund, other expense receipts (if any) such as investigation, verification, loading, transportation, storage, inspection, testing, organization of sale of seized goods and assets...

When selling seized goods and assets, a receipt for collecting money (Form CTT 11) must be used. All proceeds must be deposited into the temporary account of the tax authority opened at the national treasury where the incident occurred.

b. For hidden taxes and fines (excluding late payment fines) collected:

For fines: Based on the penalty decision, the inspection unit issues a receipt for collecting money (Form CTT 11) to the penalized entity. The inspection unit is responsible for depositing the fines (or guiding the penalized entity to deposit the fines) into the temporary account of the tax authority opened at the treasury where the incident occurred.

For hidden taxes: Based on the inspection record, the competent authority issues a decision to recover hidden taxes and immediately sends it to the penalized entity, requiring them to pay the hidden taxes into the temporary account of the tax authority opened at the treasury where the incident occurred.

c. The tax authority establishes the fund according to the following procedure:

Based on the money deposited into the temporary account as reported by the national treasury and related files, the tax authority pays out any expenses (if any).

The tax authority issues a decision to establish the fund for the inspection unit according to the ratio specified in Article 2 of Decision No. 180/TTg dated December 22, 1992 of the Prime Minister.

The tax authority prepares documentation to send to the national treasury where the temporary account is opened to transfer the amount extracted from the temporary account to the fund account of the inspection unit.

Simultaneously, the tax authority promptly processes the remaining amount for full payment into the state budget according to Item 30, Chapter, type, section, category.

Đồng thời, cơ quan thuế thực hiện ngay thủ tục nộp toàn bộ số tiền còn lại vào Ngân sách Nhà nước theo Mục 30, Chương, loại, khoản, hạng tương ứng.

The entity establishing the fund shall be responsible for distributing the fund to combat unlawful business activities in accordance with Article 4 of Decision 180-TTg dated December 22, 1992, and Point 3 of Part III of this Circular.

In cases where the inspected object must pay both concealed taxes and fines at the same time, the inspecting entity must clearly record each type of payment due in the inspection report and decision on handling to avoid confusion when establishing the fund. If the inspecting entity deliberately violates regulations and policies, such as converting concealed tax amounts into fines to receive higher bonuses, they will, in addition to being required to return the improperly allocated funds, face disciplinary action, administrative penalties, or criminal prosecution.

d. For revenues from the sale of seized goods, fines, and concealed export taxes collected from violations detected by customs authorities and deposited into the temporary holding account at the state treasury, the customs authority is permitted to establish a fund but must comply with the provisions of Decision 180-TTg dated December 22, 1992, and the guidelines set forth in this Circular.

e. When entities specified in Section I of this Circular jointly conduct inspections, the entity primarily responsible for organizing the inspection shall be entitled to establish the fund.

3. Distribution and use of the fund.

a. Distribution of the fund:

After the state treasury transfers the amount established for the fund into the fund account of the entity, the head of that entity shall proceed to allocate the fund as follows:

Allocate 25% to establish a bonus fund for the entity;

Allocate 65% to establish a supplementary fund for operating expenses to combat unlawful business activities of the entity;

Allocate 10% to submit to the superior management agency to establish a fund to combat unlawful business activities and reward cooperative units.

b. Use of the fund:

Bonus Fund: The head of the entity establishing the fund is responsible for awarding bonuses to individuals directly and indirectly contributing to combating unlawful business activities based on the principle of rewarding more for greater contributions and less for lesser contributions. The maximum individual bonus per case does not exceed 200,000 VND per case and 600,000 VND per month.

In cases where an inspection extends over multiple months, the number of months eligible for bonuses is calculated based on the number of months recorded in the inspection report. It is strictly prohibited to divide a large case into smaller ones to benefit from the bonus system.

Bonuses must be awarded conclusively for each case, and it is strictly prohibited to offset between cases with fewer bonuses and those with more bonuses to achieve absolute bonus levels.

Personnel outside the department who participate directly in inspections also receive bonuses according to the department's bonus system. Personnel indirectly involved in combating unlawful business activities (such as those engaged in directing, summarizing, and supporting anti-unlawful business activities) may receive bonuses up to 100,000 VND per case and 300,000 VND per month if recommended for bonuses by inspection units.

Any remaining funds after awarding bonuses are retained in the bonus fund for use in rewarding cases without revenue deposits, such as inspections of counterfeit goods and seized items requiring destruction.

The supplementary fund for operating expenses to combat unlawful business activities is used for the following purposes:

Supplementing operating expenses based on the financial budget plan;

Purchasing work equipment;

Conducting year-end reviews and commendations;

Funding press conferences and publicity efforts;

Providing allowances for personnel injured while performing duties;

Assisting regions facing difficulties in funding anti-unlawful business activities.

The industry fund is used for the following purposes:

Funding press conferences and publicity efforts;

Purchasing additional work equipment;

Awarding commendation bonuses for the entire industry's anti-unlawful business activities and rewarding cooperating industries.

IV. RESPONSIBILITIES OF THE ORGANIZATIONS PARTICIPATING IN COMBATING UNLAWFUL BUSINESS ACTIVITIES

1. Responsibilities of the direct inspection and penalty enforcement agencies.

Direct inspection and penalty enforcement agencies must retain all files related to inspected cases, seizures, and penalties, including inspection reports, seizure reports, penalty reports, sales invoices, and individual and collective bonus award decisions.

Quarterly and annually, they must settle accounts with the same-level financial agency regarding the establishment and use of the fund to combat unlawful business activities. For expenditures on purchasing equipment, ledgers should be maintained and managed according to the state budget capital management system.

The head of the direct inspection agency is responsible for summarizing and evaluating experiences from inspection rounds, awarding bonuses to individuals, and disciplining staff who commit errors during inspections according to their level of management.

For cases discovered by the direct inspection agency that require criminal prosecution, the agency must manage and monitor the situation of seized goods and follow procedures for depositing and allocating them to the temporary holding account as instructed in this Circular.

2. Responsibilities of the tax and customs agencies.

Tax and customs agencies, which are authorized to open temporary holding accounts at the same-level state treasury to monitor the collection and allocation of funds by direct inspection agencies combating unlawful business activities, must immediately process deposits into and allocations from the temporary holding account upon receipt of the necessary documentation as stipulated in Section 3, Point 2 of this Circular.

Quarterly and annually, tax bureaus report the income and expenditure status of the temporary holding account to the provincial tax bureau, and customs bureaus report the same to the General Customs Department. Provincial tax bureaus and the General Customs Department are responsible for compiling these reports and submitting them to the Ministry of Finance (as attached).

V. IMPLEMENTATION PROVISIONS

1. This Circular takes effect from January 1, 1993. The Circular No. 04-TC/TCT dated January 4, 1991 of the Ministry of Finance guiding the extraction of rewards for persons who discover and arrest smuggled goods, and the Circular No. 29-TC/TCT dated May 25, 1991 of the Ministry of Finance guiding rewards for teams combating tax losses and other provisions contrary to this Circular are hereby abolished.

2. For cases that have been inspected and processed but have not yet received a decision on the extraction from the fund to combat illegal business activities, they shall also enjoy the extraction regime as guided by this Circular.

In the course of implementation, any difficulties encountered by sectors and units shall be promptly reported to the Ministry of Finance for research and supplementary guidance.

NAME OF THE ORGANIZING AUTHORITY

AGENCY

DETAILED REPORT OF EACH UNIT ON THE COLLECTION AND EXPENDITURE OF TEMPORARY ACCOUNTS

(Sent to the Ministry of Finance - General Department of Taxation)

Unit: million dong

Note: Report only cases that have received a handling decision

TAX DEPARTMENT

PROVINCE CUSTOMS

REPORT ON THE SITUATION OF COLLECTION AND EXPENDITURE FROM TEMPORARY ACCOUNT

(Sent to the Ministry of Finance - General Department of Taxation)

Unit: million dong

Note: Report cases that have completed collection and expenditure procedures for the temporary account