Circular No. 27/2006/TT-BTC guides the sources of funds for payment in cases subject to payment as prescribed in Decree No. 127/2005/NĐ-CP dated October 10, 2005 of the Government on guiding the implementation of Resolution No. 23/2003/QH11 dated November 26, 2003 of the National Assembly and Resolution No. 755/2005/NQ-UBTVQH11 dated April 2, 2005 of the Standing Committee of the National Assembly regarding the handling of specific cases concerning real estate during the process of implementing policies on real estate management and socialist transformation before July 1, 1991.

CIRCULAR

Guidelines for sources of funds to pay for cases within the scope of payment under the provisions of Decree No. 127/2005/NĐ-CP dated October 10, 2005 of the Government guiding the implementation of Resolution No. 23/2003/QH11 dated November 26, 2003 of the National Assembly and Resolution No. 755/2005/NQ-UBTVQH11 dated April 2, 2005 of the Standing Committee of the National Assembly regarding the handling of specific cases concerning real estate during the implementation of policies on real estate management and socialist transformation policies before July 1, 1991.

Pursuant to Decree No. 127/2005/NĐ-CP dated October 10, 2005 of the Government guiding the implementation of Resolution No. 23/2003/QH11 dated November 26, 2003 of the National Assembly and Resolution No. 755/2005/NQ-UBTVQH11 dated April 2, 2005 of the Standing Committee of the National Assembly regarding the handling of specific cases concerning real estate during the implementation of policies on real estate management and socialist transformation policies before July 1, 1991 (hereinafter referred to as Decree No. 127/2005/NĐ-CP dated October 10, 2005 of the Government);

10/10/2005 Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

After reaching consensus with the Ministry of Construction, the Ministry of Natural Resources and Environment, the Ministry of Finance hereby guides the use of funds for payment for cases within the scope of payment for specific cases concerning real estate during the implementation of policies on real estate management and socialist transformation policies before July 1, 1991, as follows:A/ APPLICABLE OBJECTS

The objects eligible for payment under Decree No. 127/2005/NĐ-CP dated October 10, 2005 of the Government include:1/ Objects that are owners or lawful heirs of real estate that the State has purchased but the State has not yet paid or has only partially paid.

2/ Objects that are owners or lawful heirs of residential property that the State has temporarily requisitioned from households or individuals eligible for reassignment, but cannot be reassigned due to the State's use of such property for national defense, security, national interest, public interest, economic development purposes; demolition and reconstruction; stable allocation to other users by the State; establishment of full public ownership; transfer of ownership rights to others; or the property is subject to relocation according to planning decisions made by competent state authorities for economic development or urban beautification.3/ Objects that are recognized as owners or lawful heirs according to Clause 4, Article 4; Clause 6, Article 5; Clause 3, Article 8 of Decree No. 127/2005/NĐ-CP dated October 10, 2005 of the Government, but the real estate is subject to relocation according to planning decisions made by competent state authorities for economic development or urban beautification.

B/ DETERMINATION OF NEED AND SOURCES OF FUNDS FOR PAYMENTVietnam and

I/ DETERMINATION OF THE NEED FOR FUNDS FOR PAYMENT

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1/ For real estate purchased by the State:

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; The valuation of houses shall be based on the principle of taking the new construction price of Class 2 housing, if it is a villa, then taking the new construction price of Class 2 villa as prescribed by the provincial People's Committee at the time of payment multiplied by the usable area of the house when the State purchased it to serve as the basis for payment. If the State has already paid part of the money, the remaining amount will be paid to the owner or lawful heir according to the principle: taking the new construction price of Class 2 housing, if it is a villa, then taking the new construction price of Class 2 villa as prescribed by the provincial People's Committee at the time of payment multiplied by the usable area when the State purchased it, then multiplying by the percentage of the unpaid amount previously paid by the State to the owner or lawful heir. The determination of the need for funds for payment for each specific case shall be carried out in accordance with Circular No. 19/2005/TT-BXD dated December 1, 2005 of the Ministry of Construction.

2/ For residential property temporarily requisitioned by the State:

For residential property temporarily requisitioned by the State, which is eligible for reassignment to the owner or lawful heir, but cannot be reassigned because the State has used it for national defense, security, national interest, public interest, economic development purposes; demolition and reconstruction; stable allocation to other users by the State; establishment of full public ownership; transfer of ownership rights to others; or the property is subject to relocation according to planning decisions made by competent state authorities for economic development or urban beautification, then the person eligible for reassignment (owner or lawful heir) shall be paid according to the current mechanism for compensation and resettlement support when the State expropriates land.

3/ For real estate currently being used, where the user of the real estate is recognized as the owner or lawful heir according to Clause 4, Article 4; Clause 6, Article 5; Clause 3, Article 8 of Decree No. 127/2005/NĐ-CP dated October 10, 2005 of the Government, but now the real estate is subject to relocation according to planning decisions made by competent state authorities for economic development or urban beautification, then the person recognized as the owner or lawful heir shall be paid according to the current regulations on compensation and resettlement support when the State expropriates land.

II/ SOURCES OF FUNDS FOR PAYMENT:

1/ For houses purchased by the State:

1.1/ In cases where houses purchased by the State have been transferred to state agencies, political organizations, social-political organizations, or professional social-political organizations for management and use, or real estate is currently being used for national defense, security, national interest, public interest purposes, or the State has allocated it stably to others or transferred ownership rights to others in accordance with the law, the following measures shall be implemented:

B/ DETERMINATION OF NEEDS AND SOURCES OF FUNDS FOR PAYMENT

I/ DETERMINATION OF FUNDS NEEDS FOR PAYMENT.

1/ For state-acquired real estate:

The valuation of the house shall be carried out based on the principle of using the new construction price of a second-class residential building, and if it is a villa, the new construction price of a second-class villa as stipulated by the provincial People's Committee at the time of payment, multiplied by the usable area of the house when the State acquired it, to serve as the basis for payment. In cases where the State has already paid part of the money, the remaining amount will be paid to the owner or legitimate heir according to the principle: taking the new construction price of a second-class residential building, and if it is a villa, the new construction price of a second-class villa as stipulated by the provincial People's Committee at the time of payment, multiplied by the usable area when the State acquired it, then multiplied by the percentage of the amount that the State had not yet paid previously to the owner or legitimate heir. The determination of funds needs for payment in each specific case shall be implemented in accordance with Circular No. 19/2005/TT-BXD dated December 1, 2005, issued by the Ministry of Construction.

2/ For state-temporarily-used residential buildings:

For state-temporarily-used residential buildings that are eligible to be returned to the owner or legitimate heir but cannot be returned due to the State's use for national defense, security, national interests, public interest, economic development; have been demolished and rebuilt; have been arranged by the State for others to use stably, have been established as fully-owned property; have transferred ownership to others, or the real estate is subject to clearance according to planning for economic development or urban beautification as decided by competent state agencies, the person eligible to receive the return (owner or legitimate heir) shall be compensated according to the current mechanism for compensation and resettlement support when the State expropriates land.

3/ For real estate currently in use, where the user of such real estate is recognized by the State as the owner or legitimate heir in accordance with Clause 4, Article 4; Clause 6, Article 5; Clause 3, Article 8 of Decree No. 127/2005/NĐ-CP dated October 10, 2005, of the Government, but now the real estate is subject to clearance according to planning for economic development or urban beautification as decided by competent state agencies, the person recognized as the owner or legitimate heir shall be compensated according to the current regulations on compensation and resettlement support when the State expropriates land.

II/ SOURCES OF FUNDS FOR PAYMENT:

1/ For state-acquired houses:

1.1/ In cases where the state-acquired house has been handed over to state agencies, political organizations, social-political organizations, or occupational social-political organizations for management and use, or the real estate is being used for national defense, security, national interests, public interest, or the State has arranged for others to use stably or has transferred ownership to others in accordance with the law, the following shall be implemented:

a/ The local budget shall pay to the owner or lawful heir in the case of requisitioned houses that the State is transferring to state agencies, political organizations, social-political organizations, or occupational social-political organizations at the local level for management and use, or land and houses being used for national defense, security, national interests, public interests managed and used by the locality, or land and houses that the State has allocated for others to use stably or transferred ownership rights to others in accordance with the law.

b/ The central budget shall pay to the owner or lawful heir in the case of requisitioned houses that the State is transferring to state agencies, political organizations, social-political organizations, or occupational social-political organizations at the central level for management and use, or land and houses being used for national defense, security, national interests, public interests managed and used by the central government.

1.2/ In the case of requisitioned houses that the State has transferred to social organizations, occupational social organizations, or economic organizations for management, the sources of funds for implementing payments shall be as follows:

a./ For economic organizations:

- In the case where the economic organization has been granted land use rights and house ownership rights by the State and the organization has paid land use fees and house purchase fees to the State budget according to the prescribed regulations, and these funds do not originate from the State budget, then the local budget shall implement payment of house money according to the regime to the owner or lawful heir.

- In the case where the economic organization has been granted land use rights and house ownership rights by the State and the organization has paid land use fees and house purchase fees to the State budget, and these funds originate from the State budget, then the economic organization currently holding land use rights and house ownership rights shall implement payment of house money according to the regime to the owner or lawful heir and record a reduction in the State-owned capital assigned to the enterprise.

- In the case where the economic organization is a joint-stock company with participation of State capital, and the value of the house and the value of land use fees have been included in the value of the enterprise for privatization, then the State budget shall implement payment of house money according to the regime to the owner or lawful heir. The local budget shall settle and pay in the case of joint-stock companies in which the locality participates in capital contribution; the central budget shall settle and pay in the case of joint-stock companies in which the central government participates in capital contribution.

- In the case where the economic organization has been granted house and land by the State but has not yet paid land use fees and house purchase fees to the State budget, then the economic organization shall implement settlement and payment of house money according to the regime to the owner or lawful heir as decided by the competent state agency; while simultaneously paying land use fees to the State budget to complete the procedures for land use rights and house ownership rights in accordance with the law.

b./ For social organizations, occupational social organizations.

Implement settlement and payment of house money to the owner or lawful heir according to the decision of the competent state agency, specifically:

- In the case where social organizations, occupational social organizations pay house money from non-State budget funds, then the State shall establish house ownership rights for the organization (without establishing land use rights with land use fees for social organizations, occupational social organizations).

- In the case where social organizations, occupational social organizations pay house money from State budget funds, then the State continues to monitor State assets transferred to social organizations, occupational social organizations in accordance with the law.

- In the case where social organizations, occupational social organizations do not have sufficient funds to implement payments to the owner or lawful heir according to the decision of the competent state agency; based on the proposal of the organization approved by the competent authority, the State budget will implement settlement and payment to the owner or lawful heir according to the decision of the competent state agency, wherein: if the social organization, occupational social organization is under central management, the central budget will implement settlement and payment; if the social organization, occupational social organization is under local management, the local budget will implement settlement and payment; while simultaneously monitoring and managing State assets transferred to social organizations, occupational social organizations in accordance with the law.

1.3/ In the case of requisitioned houses that must be cleared for economic development or urban beautification purposes, the source of funds for settling payments to the owner or lawful heir shall be arranged within the project budget, implemented by the project investor in the total compensation costs for land clearance to be submitted for approval by the competent authority in accordance with the law.

2/ For land and houses requisitioned temporarilybut unable to transfer back to the owner or lawful heir, the sources of funds for implementing payments shall be as follows:

2.1/ For house money:

The handling of sources for settlement and payment to the owner or lawful heir shall be carried out as stipulated in Point 1, Section II, Part B of this Circular for requisitioned houses.

2.2/ For land use fees attached to temporarily requisitioned houses:

a/ In the case where the land attached to the house, which the State has requisitioned, has been transferred to state agencies, political organizations, social-political organizations, or occupational social-political organizations for management and use, or is being used for national defense, security, national interests, public interests, or has been allocated for others to use stably or transferred ownership rights to others in accordance with the law, it shall be handled as follows:

- The local budget shall pay from land use fees revenue to the owner or lawful heir in cases where the land is currently managed or used by state agencies, political organizations, social organizations, or occupational social organizations at the local level, or is being used for national defense, security, national interests, public benefits managed or used by the locality, or has been allocated by the State for stable use by others or transferred ownership rights to others in accordance with the provisions of the law.

- The central budget shall pay to the owner or lawful heir in cases where the land is currently managed or used by state agencies, political organizations, social organizations, or occupational social organizations at the central level, or is being used for national defense, security, national interests, public benefits managed or used by the central level.

b/ In cases where the land is attached to temporarily requisitioned houses and has been assigned by the State to social organizations, occupational social organizations, or economic organizations for management and use, it shall be implemented as follows:

b.1/ In cases where the land is attached to temporarily requisitioned houses and has been assigned by the State to economic organizations for management and use, it shall be implemented as follows:

- Where the economic organization has been granted land use rights by the State and that organization has paid land use fees into the state budget, but the funds are not derived from the state budget, then the local budget shall make payments (from land use fee revenues) to the owner or lawful heir.

- Where the economic organization has been granted land use rights by the State and that organization has paid land use fees into the state budget, but the funds are derived from the state budget, then the economic organization currently holding the land use rights shall make payments to the owner or lawful heir. The amount paid to the owner or lawful heir shall be recorded as a reduction in the state-owned capital assigned to the enterprise.

- Where the economic organization is a joint-stock company with state participation, and the value of the land use has been included in the company's valuation for privatization, then the state budget shall make payments for land use fees to the owner or lawful heir according to the regulations. The local budget shall make payments in cases where the joint-stock company is participated in by the locality; the central budget shall make payments in cases where the joint-stock company is participated in by the central government.

- Where the economic organization has been granted land by the State but has not yet paid land use fees into the state budget, then that organization shall make payments to the owner or lawful heir according to the decision of the competent state agency; simultaneously completing the procedures for land use rights in accordance with the law.

b.2/ In cases where the land is attached to temporarily requisitioned houses and has been assigned by the State to social organizations or occupational social organizations for management and use:

The state budget shall make payments to the owner or lawful heir. For social organizations or occupational social organizations under central management, the central budget shall make payments. For social organizations or occupational social organizations under local management, the local budget shall make payments; simultaneously, the state agency shall monitor and manage the state assets transferred to social organizations or occupational social organizations in accordance with the law.

c/ In cases where the land attached to temporarily requisitioned houses is within the area required to be cleared for economic development or urban renovation purposes, the funding for payment to the owner or lawful heir shall be arranged in the project budget, to be paid by the project investor within the total compensation costs for land clearance to be submitted for approval by the competent authority in accordance with the law.

3/ In cases where the house and land are currently in use, and the user of the house and land has been recognized by the State as the owner or lawful heir pursuant to Clause 4, Article 4; Clause 6, Article 5; Clause 3, Article 8 of Decree No. 127/2005/NĐ-CP dated October 10, 2005 of the Government, but now the house and land fall within the scope requiring clearance according to the decision of the competent state agency, then the person recognized as the owner or lawful heir shall be compensated according to the current mechanism for compensation and support for resettlement when the State recovers land, the funding for implementation shall be arranged in the project budget, to be paid by the project investor within the total compensation costs for land clearance to be submitted for approval by the competent authority in accordance with the law.

III/ PROCEDURES FOR PAYMENTS, DISBURSEMENTS AND REPORTING ON IMPLEMENTATION RESULTS:

1/ Receiving and processing files:

Based on the file sent by the owner or lawful heir, the Department of Construction shall check and determine the legality and completeness of the file, determine the financial needs and sources of funds to be paid out; compile and submit the payment file for each owner or lawful heir to the Department of Finance for review and submission to the Chairman of the Provincial People's Committee for consideration and handling within their authority:

- Decision on the amount and source of funds to be paid out to each specific recipient: from the local budget (including the portion of support provided according to the system for social organizations and occupational social organizations managed by the locality), from economic organizations (excluding joint-stock companies with central government participation), from social organizations and occupational social organizations (excluding those managed by the central government and supported for payment from the central budget), from project investment funds for land clearance serving economic development and urban renovation according to the decision of the competent state agency; the payment decision of the Chairman of the Provincial People's Committee shall be sent to the owner or lawful heir and relevant state agencies to organize the payment process.

- For cases where the funding sources for payment and disbursement are determined from the central government budget, the provincial People's Committee shall prepare a report to send to the Ministry of Construction and the Ministry of Finance. Based on the documents sent by the provincial People's Committee, the Ministry of Construction shall examine the legality and completeness of the documents, review the need for funds and the source of funds for payment and disbursement from the central government budget for each owner or lawful heir (including the portion of support funds under the regime for social organizations and social-professional organizations managed by the central government). The Ministry of Construction shall compile a budget estimate for payment, disbursement, and support for payment and disbursement, submit it to the Ministry of Finance for examination and approval, and then submit it to the Prime Minister for consideration and decision to use the central government budget for payment, disbursement, or support for payment and disbursement according to the regime for each recipient. The Prime Minister's decision on payment and disbursement shall be sent to the owner or lawful heir and relevant state agencies to organize the implementation of payment and disbursement.

2/ Payment and disbursement:

2.1/ In the case where the payment and disbursement funds belong to the expenditure tasks of a project for land clearance for economic development purposes or urban renovation:

Based on the Decision of the Chairman of the provincial People's Committee regarding payment and disbursement, the project proponent shall be responsible for making payment and disbursement to the owner or lawful heir; at the same time, aggregate the payment and disbursement costs in the project investment budget (the compensation cost for land clearance).

In the case where the project does not yet have payment and disbursement funds. Based on the proposal of the project proponent, the Department of Finance shall report to the Chairman of the provincial People's Committee where the project is located to decide to advance the funds from the local budget for the project proponent to make payment and disbursement to the owner or lawful heir. This amount of funds will be reimbursed when there are land clearance funds for the project.

2.2/ In the case where the payment and disbursement task is the responsibility of an economic organization:

Based on the Decision of the Chairman of the provincial People's Committee regarding payment and disbursement, the head of the economic organization shall be responsible for making payment and disbursement to the owner or lawful heir.

In the case where the economic organization is a joint-stock company with participation of state capital: The payment and disbursement shall be carried out in accordance with the provisions at point 2.4, Section III, Part B (for joint-stock companies with local participation) and point 2.5, Section III, Part B (for joint-stock companies with central participation) of this Circular.

2.3/ For the payment and disbursement task that is the responsibility of social organizations and social-professional organizations:

Based on the Decision of the Chairman of the provincial People's Committee regarding payment and disbursement, social organizations and social-professional organizations shall be responsible for making payment and disbursement to the owner or lawful heir.

2.4/ For the portion of payment and disbursement funds belonging to the local government budget expenditure tasks:

- Based on the Decision of the Chairman of the provincial People's Committee regarding payment and disbursement to the owner or lawful heir belonging to the local government budget expenditure tasks (including the portion of support funds for social organizations and social-professional organizations), the Department of Finance shall transfer funds through the payment order form and send it to the State Treasury for payment to the owner or lawful heir. When making payment, record the expenditure as follows:

+ Chapter 160, type 10, Clause 10, Section 131 (expenditure for handling assets established as state property), sub-section 99 for direct payments from the state budget.

+ Section 145, sub-section 09 (for house payment), sub-section 99 (for land value payment) for cases where the local government provides support for social organizations and social-professional organizations to carry out payment and disbursement.

+ In the case where the project proponent makes payment and disbursement within the compensation cost for land clearance of the investment project guaranteed by the local government budget, when making payment, record the chapter, type, clause, section, and sub-section corresponding to the accounting treatment of other basic construction investment projects.

2.5/ For the portion of payment and disbursement from the central government budget:

a/ Expenditure tasks for payment and disbursement directly funded by the central government budget:

- Based on the Prime Minister's Decision on using the central government budget for payment and disbursement to the owner or lawful heir (including support funds for social organizations and social-professional organizations under the regime), the Ministry of Finance shall transfer funds to the Department of Finance through the authorization form. On the basis of the transferred central government funds, the Department of Finance shall transfer funds through the authorized payment form to the State Treasury for payment and disbursement to the owner or lawful heir. When making payment and disbursement, record the expenditure as follows:

+ Chapter 160, type 10, Clause 10, Section 131 (expenditure for handling assets established as state property), sub-section 99 for direct payments from the state budget.

+ Section 145, sub-section 09 (for house payment), sub-section 99 (for land value payment) for cases where the local government provides support for social organizations and social-professional organizations to carry out payment and disbursement.

+ In the case where the project proponent makes payment and disbursement within the compensation cost for land clearance of the investment project guaranteed by the central government budget, when making payment, record the chapter, type, clause, section, and sub-section corresponding to the accounting treatment of other basic construction investment projects.

b/ Support for local governments to implement payment and disbursement:

Part on payment and disbursement falls under the expenditure responsibility of the local budget and is carried out from land use fees and proceeds from the sale of state-owned housing. In cases where revenues from land use fees and sales of state-owned housing are insufficient to cover payments to rightful owners or legitimate heirs, the Ministry of Construction and the Ministry of Finance, based on the proposals of provincial People's Committees and the Central City People's Committees, will coordinate to compile and submit to the Prime Minister for consideration and decision on targeted support from the central government budget to each local budget to ensure sources for payment and disbursement.

3/ Reporting on Implementation Results:

Every six months, based on the implementation results at the local level, the provincial People's Committee shall prepare a report on the implementation of payments and disbursements to rightful owners or legitimate heirs and a report on the use of state budget funds (including local budget funds, central government budget support for local implementation of payments within the responsibility of the local budget, and central government budget authority delegated to localities for payments for tasks under the central government budget) for the implementation of payments and disbursements to rightful owners or legitimate heirs, to be submitted to the Ministry of Finance and the Ministry of Construction for compilation and reporting to the Prime Minister.

C/ IMPLEMENTATION ORGANIZATION

1/ To proactively allocate financial resources for the task of making payments and disbursements to rightful owners or legitimate heirs from the state budget as stipulated in this Circular, the annual budget preparation process shall be conducted as follows:

- The Department of Construction shall prepare the budget estimate for the required financial resources for payments and disbursements (for tasks under the local budget) and submit it to the Department of Finance for review and consolidation into the local budget expenditure plan to be submitted to the competent authority for approval in accordance with the State Budget Law and guiding documents implementing the State Budget Law.

- Based on reports from the provincial People's Committee, the Ministry of Construction shall prepare the budget estimate for the required financial resources (for tasks under the central government budget and support for the local budget), including:

+ The budget estimate for direct expenditures from the central government budget,

+ The budget estimate for support to each locality,

On the basis of the budget estimates prepared by the Ministry of Construction, the Ministry of Finance shall review and consolidate them into the central government budget expenditure plan to be submitted to the competent authority for approval to allocate the budget for this task in accordance with the State Budget Law and guiding documents implementing the State Budget Law.

2/ This Circular takes effect fifteen days from the date of publication in the Official Gazette. Any issues arising during the implementation process should be promptly reported to the Ministry of Finance for coordination and resolution.