Circular No. 33/2008/TT-BTC amending and supplementing Circular No. 119/2005/TT-BTC of the Ministry of Finance guiding financial regulations applicable at the Dung Quat Economic Zone.

CIRCULAR

Amending and supplementing Circular No. 119/2005/TT-BTC dated December 22, 2005 of the Ministry of Finance guiding financial regulations applicable to the Dung Quat Economic Zone

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Pursuant to Decision No. 50/2005/QĐ-TTg dated March 11, 2005 of the Prime Minister on the establishment and issuance of the operational regulations for the Dung Quat Economic Zone, Quang Ngai Province;

Pursuant to Decision No. 72/2005/QĐ-TTg dated April 5, 2005 of the Prime Minister on the establishment and definition of functions, tasks, powers, and organizational structure of the Management Board of the Dung Quat Economic Zone;

Pursuant to Decision No. 396/QĐ-TTg dated April 5, 2007 of the Prime Minister on the transfer of the Management Board of the Dung Quat Economic Zone from the Prime Minister to the People's Committee of Quang Ngai Province for management;

The Ministry of Finance guides the amendment and supplementation of certain contents of Circular No. 119/2005/TT-BTC dated December 22, 2005 of the Ministry of Finance as follows:

1. Point 1.2.3 (b), Part II guiding income tax for foreign individuals with high income shall be amended as follows:

"b. For foreign individuals:

- If they are non-residents, the amount of tax payable shall be determined as follows:

Individual income tax payable = Total taxable income multiplied by (×) 25% multiplied by (×) 50%.

- If they are residents, the paying entity shall temporarily withhold 50% of the individual income tax payable monthly. At year-end, the final tax settlement will calculate the total tax payable for the year and the tax reduction. The annual tax reduction shall be calculated according to the formula stated in point 1.2.3 (a) of Part II of this Circular."

2. Clause 4, Part II guiding preferential policies for infrastructure development shall be amended and supplemented as follows:

2.1 Point 4.1 (b) of Clause 4 shall be amended as follows:

"b) During the first 15 years from the date of effectiveness of Decision No. 50/2005/QĐ-TTg, the annual investment capital from the State budget for building infrastructure in the Dung Quat Economic Zone shall not be lower than the total revenue collected from the Dung Quat Economic Zone and deposited into the National Treasury, including import-export duties, special consumption taxes on imported goods, corporate income tax, and high-income individual income tax (excluding VAT on imported goods). For export duties, import duties, and special consumption taxes on imported goods, only actual exported and imported goods declared at the customs office within the bonded zone and paid taxes to the National Treasury in Quang Ngai Province shall be counted."

2.2 Supplement Point 4.1 (d) of Clause 4 as follows:

"d) Annually, based on economic and social infrastructure investment projects approved by competent authorities, progress of implementation of the projects, the central government budget shall provide targeted supplementary funding to the Quang Ngai provincial budget for investing in economic and social infrastructure construction projects in the Dung Quat Economic Zone in accordance with the State Budget Law.

Central government targeted support funds for the Quang Ngai provincial budget to invest in economic and social infrastructure construction projects, service facilities, and public utilities in the Dung Quat Economic Zone shall be clearly recorded in the annual state budget estimate allocated to Quang Ngai Province. Along with the central government support, Quang Ngai Province shall allocate its local budget annually to invest in economic and social infrastructure, service facilities, and public utilities in the Dung Quat Economic Zone in accordance with the provisions of Point 4.1 of this Clause."

2.3 Point 4.2 of Clause 4 shall be amended as follows:

"4.2. Management and use of capital invested by the central government for building infrastructure in the Dung Quat Economic Zone shall be carried out in accordance with regulations on basic construction investment management, the State Budget Law, and current guiding documents: Annually, when preparing the state budget estimate, the Management Board of the Dung Quat Economic Zone shall coordinate with relevant agencies to determine the revenue from import-export duties, special consumption taxes on imported goods, corporate income tax, high-income individual income tax, VAT, and other lawful revenues in the Dung Quat Economic Zone to prepare the annual basic construction investment budget consistent with the list of approved investment projects, which shall be submitted to the Quang Ngai Provincial People's Committee for submission to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and reporting to the Government for decision by the National Assembly."

2.4 Point 4.3 of Clause 4 shall be amended as follows:

“4.3. Land fund utilization policy for infrastructure development

The Management Board of the Dung Quat Economic Zone is responsible for receiving annual targets and directly managing investment projects funded by the land fund in the Dung Quat Economic Zone; organizing bidding to select units with sufficient financial capacity, experience, and reputation to implement infrastructure construction projects funded by the land fund in the Dung Quat Economic Zone.

The Management Board of the Dung Quat Economic Zone shall compile a list of infrastructure construction projects utilizing the land fund for capital generation and the area of land used for capital generation to implement projects, which shall be sent to the Department of Finance and the Department of Planning and Investment for consolidation in accordance with the State Budget Law for submission to the Quang Ngai Provincial People's Committee for decision by the Quang Ngai Provincial People's Council within its authority.

Based on the local land use plan, the ability to collect land use fees and land rental fees from auctions, land use fees and rental fees from non-auctioned land, and the needs for compensation and support for people whose land has been expropriated and the needs for investment in infrastructure construction projects funded by the state budget as stipulated by law, the Quang Ngai Provincial People's Committee shall instruct the finance department to consolidate these revenue and expenditure items into the annual budget estimate for submission to the same-level People's Council for decision.

Based on the annual budget estimate decided by the People's Council, the People's Committee shall assign the finance department to cooperate with related units to organize the collection and expenditure from land use fees and rental fees and settle accounts into the state budget according to prescribed regulations.

In the case where organizations or individuals advance funds to implement compensation and support for people whose land is expropriated to invest in infrastructure projects under the state budget's investment targets, and then subsequently conduct auctions to collect land use fees or lease fees, the land use fees and lease fees collected must be fully accounted for in the state budget to repay the organizations and individuals who advanced the funds according to current laws.

The use of land funds to build infrastructure in the Dung Quat Economic Zone shall be carried out in accordance with Decree No. 181/2004/ND-CP dated October 29, 2004 of the Government on the implementation of the Land Law, Decree No. 17/2006/ND-CP dated January 27, 2006 of the Government amending and supplementing certain articles of decrees guiding the implementation of the Land Law, Decision No. 216/2005/QD-TTg dated August 31, 2005 of the Prime Minister on the issuance of regulations on auctioning land use rights for allocating land with land use fees or leasing land, and other relevant provisions of current laws.

2.5 Point 4.4 Clause 4 shall be amended as follows:

“4.4. Mobilizing capital through the issuance of government bonds, project bonds, and official development assistance (ODA) funds to invest in developing infrastructure in the Dung Quat Economic Zone.

The issuance of government bonds and project bonds to invest in developing infrastructure in the Dung Quat Economic Zone shall be implemented in accordance with the provisions of Decree No. 141/2003/ND-CP dated November 20, 2003 of the Government on the Regulations on Issuing Government Bonds, Government-Guaranteed Bonds, Local Government Bonds, and other forms of capital mobilization as stipulated by law.

Priority should be given to using ODA funds and preferential credit funds for investing in technical-social infrastructure construction projects, necessary public utility service facilities in the Dung Quat Economic Zone, and other technical assistance. Annually and every five years, the Management Board of the Dung Quat Economic Zone shall prepare the annual capital plan and list of investment projects using ODA funds and preferential credit funds to submit to the People's Committee of Quang Ngai Province for submission to the Ministry of Planning and Investment and the Ministry of Finance for consolidation and reporting to the Prime Minister for consideration and approval.

3. Article 5, Part II, guiding the financial regime applicable to the Management Board of the Dung Quat Economic Zone shall be amended as follows:

“5. Financial regime applicable to the Management Board of the Dung Quat Economic Zone:

5.1. The Management Board of the Dung Quat Economic Zone is a local state budget unit, serving as the focal point for investment capital planning and development, funded annually by the Quang Ngai provincial budget. During the period of stabilization of the local state budget until the end of 2010, the operating and administrative expenses of the Management Board of the Dung Quat Economic Zone will be balanced from the State Budget. The Management Board of the Dung Quat Economic Zone has the authority to decide on revenue and expenditure within the fields of development investment, administration, public services, target programs, and other areas as prescribed by law. All revenues collected in accordance with the regulations must be remitted to the state budget.

5.2. The Management Board of the Dung Quat Economic Zone is permitted to collect various types of fees and charges corresponding to the tasks delegated by state management agencies in accordance with current regulations. When authorized by competent state authorities to perform collection tasks, the Management Board of the Dung Quat Economic Zone shall have the responsibility to notify and register with the tax authority at its location to handle procedures for remitting collected fees and charges from performing delegated tasks.

4. This Circular takes effect fifteen days after its publication in the Official Gazette. The Management Board of the Dung Quat Economic Zone and related agencies within the Dung Quat Economic Zone need to strengthen coordination in implementing the provisions of Circular No. 119/2005/TT-BTC and this Circular. Any difficulties encountered during implementation should be reported to the Ministry of Finance for study and resolution.