Circular No. 38/2024/TT-BTC stipulates on the assessment of appraisal enterprises' activities; provision for professional risk reserves, reporting systems on appraisal activities of appraisal enterprises, and costs for appraisal services provided by appraisal boards.

CIRCULAR

Regulations on the assessment of appraisal enterprise activities; provision for professional risk reserves, reporting systems on appraisal enterprise activities, and costs for appraisal services provided by appraisal boards.

Pursuant to the Price Law dated June 19, 2023;

Pursuant to Decree No. 14/2023/NĐ-CP dated April 20, 2023, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Price Management Department;

The Minister of Finance issues this Circular to regulate the assessment of appraisal enterprise activities; provision for professional risk reserves, reporting systems on appraisal enterprise activities, and costs for appraisal services provided by appraisal boards.

Article 1. Scope of Regulation

This Circular provides detailed regulations on point e, Clause 10, Article 14 of the Price Law regarding the assessment of appraisal enterprise activities; points e and h, Clause 2, Article 53 of the Price Law concerning the provision for professional risk reserves and reporting systems on appraisal enterprise activities; Clause 1, Article 65 of the Price Law regarding costs for appraisal services provided by appraisal boards.

Article 2. Applicability

State management agencies on prices, competent state agencies establishing appraisal boards, appraisal enterprises, price appraisers, and other related organizations and individuals.

Article 3. Assessment of Appraisal Enterprise Activities

1. Content of Assessment

a) Maintaining conditions for appraisal activities;

b) Adhering to laws and regulations on appraisal and fulfilling obligations of appraisal enterprises;

c) Participating in coordinating activities to build and implement legal documents on prices and appraisals drafted and organized by the Ministry of Finance;

d) Participating in coordinating international cooperation activities;

đ) Participating in coordinating activities for state management of prices and appraisals by ministries, sectors, and localities;

e) Participating in coordinating scientific research activities in the field of appraisal.

2. The assessment period runs from January 1 to December 31 of the year immediately preceding the year in which the assessment is conducted.

From April 15 to May 31 each year, the Price Management Department organizes the assessment of appraisal enterprise activities for enterprises that meet the following conditions:

a) Having been issued a certificate of eligibility to operate appraisal services before the assessment period;

b) Meeting the operational conditions of an appraisal enterprise for at least six months during the assessment period;

c) Meeting the operational conditions of an appraisal enterprise during the implementation phase of the assessment.

Appraisal enterprises are responsible for submitting reports as stipulated in point a, Clause 1, Article 5 of this Circular to serve as the basis for assessing appraisal enterprise activities.

3. The assessment is conducted through scoring based on the assessment contents, compiled and statistically analyzed from the following sources of information:

a) Information and data in the report as stipulated in point a, Clause 1, Article 5 of this Circular;

b) Information and data obtained during state management of appraisal activities for appraisal enterprises and appraisers;

c) Information reflected by ministries, sectors, localities, and organizations and individuals (if any).

4. The assessment content is detailed according to the level of activity through specific scores for each component indicator (details in Appendix I attached to this Circular).

5. The assessment aims to improve the quality of appraisal enterprise activities. The assessment results will be publicly disclosed on the Ministry of Finance's website before June 30 each year. The assessment results do not reflect the quality of specific Appraisal Certificates and Appraisal Reports issued by individual appraisers and appraisal enterprises.

Article 4. Establishment of Professional Risk Provisions for Appraisal Enterprises

1. An appraisal enterprise that does not purchase professional liability insurance for appraisal services must establish a professional risk provision at an annual rate of 1% of the revenue from appraisal services (excluding value-added tax), which shall be set aside at the end of the fiscal year and accounted for as if it were a provision for liabilities.

2. In cases where the balance of the professional risk provision of an enterprise exceeds 10% of the average revenue from appraisal services (excluding value-added tax) over the three most recent years, the enterprise shall reverse the excess amount and account for it as other income of the enterprise.

3. The enterprise has the responsibility to develop and promulgate internal regulations governing the management and utilization of professional risk provisions.

4. If an enterprise ceases its appraisal activities, the remaining balance of the established professional risk provision that has not been fully utilized shall be accounted for as other income of the enterprise.

Article 5. Reporting System on Appraisal Activities of Appraisal Enterprises

1. Periodic Reports:

a) Annually, from January 1 to March 31, an appraisal enterprise shall submit reports according to the Model Report on Business Status and Certain Appraisal Activity Indicators as stipulated in Appendix II attached to this Circular. The data cut-off date for the report is from January 1 to December 31 of the preceding year. The deadline for submitting the report is March 31 of the reporting year;

b) After December 15 each year, an appraisal enterprise shall submit reports according to the Model Review List of Appraisers at the Enterprise as stipulated in Appendix III attached to this Circular. The data cut-off date for the report is December 15 of the reporting year. The deadline for submitting the report is December 20 of the reporting year.

2. The periodic reports specified in Clause 1 of this Article shall be sent to the Ministry of Finance (Price Management Department) through one of the following methods:

a) Directly delivered to the Ministry of Finance's document section;

b) Send through postal service;

c) Sent via fax or email to [email protected] (scanned copy);

d) Sent through the specialized information reporting software system of the Ministry of Finance (if available).

3. Ad hoc Reports: An appraisal enterprise shall submit ad hoc reports regarding matters related to compliance with laws on appraisal by the appraisal enterprise and appraisers within the enterprise under the following circumstances:

a) Upon request in writing by the Ministry of Finance (Price Management Department);

b) Upon request in writing by inspection agencies, state audit agencies, or competent authorities conducting criminal proceedings to serve the handling of cases involving suspected violations related to appraisal certificates and appraisal reports issued by the appraisal enterprise, as provided for in laws on state inspections, audits, and criminal procedures.

4. An appraisal enterprise is responsible for the accuracy and truthfulness of the information and data in the reports.

Article 6. Costs for the appraisal committee's valuation review activities

1. The contents and levels of expenditure serving the valuation review activities of the appraisal committee as specified in Clause 1, Article 65 of the Price Law include:

a) Travel expenses incurred in accordance with Circular No. 40/2017/TT-BTC dated April 28, 2017 of the Ministry of Finance on travel expenses, conference expense regulations, and any subsequent amendments, supplements, or replacements thereof (if applicable);

b) Survey costs for price collection and information gathering related to assets to be appraised, carried out in accordance with Point c, Clause 5, Article 3 of Circular No. 109/2016/TT-BTC dated June 30, 2016 of the Ministry of Finance on budget preparation, management, utilization, and settlement of funds for statistical surveys and national comprehensive censuses, and any subsequent amendments, supplements, or replacements thereof (if applicable);

c) Report preparation and explanation costs for professional services supporting the asset appraisal work of the appraisal committee, implemented in accordance with Clause 3, Article 1 of Circular No. 42/2022/TT-BTC dated July 6, 2022 of the Minister of Finance amending and supplementing certain provisions of Circular No. 338/2016/TT-BTC dated December 28, 2016 of the Minister of Finance on budget preparation, management, utilization, and settlement of state budget funds to ensure legislative work and improve the legal system (hereinafter referred to as Circular No. 42/2022/TT-BTC), with an expenditure level of VND 1,200,000 per report, and any subsequent amendments, supplements, or replacements thereof (if applicable);

d) Meeting costs for the appraisal committee conducted in accordance with Clause 3, Article 1 of Circular No. 42/2022/TT-BTC and any subsequent amendments, supplements, or replacements thereof (if applicable);

đ) Office supply and document printing costs for the appraisal work, based on valid invoices and receipts within the allocated budget;

e) Hiring fees for professionals certified to serve as members of the appraisal committee, hiring organizations for technical-economic condition assessment, quality ratio assessment of assets, and asset valuation (if applicable) in accordance with laws on public procurement;

g) For expenditures related to the appraisal activities not specified in Points a, b, c, d, and đ of Clause 1 of this Article, the head of the competent authority establishing the appraisal committee shall consider and decide according to their authority or propose to the higher authority for consideration and decision in accordance with the law;

2. Expenditures outside salaries for civil servants and public officials sourced from the state budget as stipulated in this Circular and referenced documents for application in this Circular shall be implemented until salary reform is carried out pursuant to Resolution No. 27/NQ-TW dated May 21, 2018 of the Seventh Plenary Session of the Central Committee of the Communist Party of Vietnam on salary policy reform for civil servants, public officials, armed forces personnel, and workers in enterprises;

3. Each year, the competent state agency establishing the appraisal committee shall prepare a budget estimate for the appraisal committee's activities and submit it to the competent authority for approval. In cases where urgent tasks arise during the year, supplementary budget estimates may be prepared in accordance with the law on state budget management;

4. Management, utilization, and settlement of funds for the appraisal committee's valuation activities as stipulated in Clause 1 of this Article shall be carried out in accordance with current laws on state budget management, ensuring principles of thrift, efficiency, and prevention of waste;

Article 7. Effective Date

1. This Circular takes effect from July 1, 2024.

2. The following provisions cease to be effective from July 1, 2024:

a) Circular No. 38/2014/TT-BTC dated March 28, 2014 of the Minister of Finance guiding certain provisions of Decree No. 89/2013/NĐ-CP dated August 6, 2013 of the Government detailing implementation of certain provisions of the Price Law on valuation;

b) Article 2 of Circular No. 76/2020/TT-BTC dated August 14, 2020 of the Minister of Finance amending and supplementing certain provisions of Joint Circular No. 39/2014/TTLT-BCT-BTC dated October 29, 2014 of the Ministry of Industry and Trade and the Ministry of Finance on pricing methods; mechanisms for forming, managing, and using the price stabilization fund and managing oil prices under Decree No. 83/2014/NĐ-CP dated September 3, 2014 of the Government on oil trading; Circular No. 38/2014/TT-BTC dated March 28, 2014 of the Ministry of Finance guiding certain provisions of Decree No. 89/2013/NĐ-CP dated August 6, 2013 of the Government detailing implementation of certain provisions of the Price Law on valuation; Circular No. 138/2007/TT-BTC dated November 29, 2007 of the Ministry of Finance guiding management, payment, and settlement of compensation, support, and resettlement capital for the Son La hydropower project, ceasing to be effective from the date this Circular takes effect;

c) Circular No. 323/2016/TT-BTC dated December 16, 2016 of the Minister of Finance on inspection, supervision, and evaluation of valuation service activities;

d) Circular No. 60/2021/TT-BTC dated July 21, 2021 of the Minister of Finance amending and supplementing certain provisions of Circular No. 38/2014/TT-BTC dated March 28, 2014 guiding certain provisions of Decree No. 89/2013/NĐ-CP dated August 6, 2013 of the Government detailing implementation of certain provisions of the Price Law on valuation;

đ) Circular No. 25/2019/TT-BTC dated April 22, 2019 of the Minister of Finance amending and supplementing certain provisions of Circular No. 323/2016/TT-BTC dated December 16, 2016 of the Ministry of Finance on inspection, supervision, and evaluation of valuation service activities;

Article 8. Implementation organization

1. Relevant organizations and individuals are responsible for implementing the provisions of this Circular;

2. In the course of implementation, if there are any difficulties, organizations and individuals are requested to promptly report them to the Ministry of Finance for study and resolution.

ANNEX I.

TABLE OF DETAILS FOR ASSESSING THE VALUATION SERVICE BUSINESS ACTIVITIES
(Attached to Circular No. 38/2024/TT-BTC dated May 16, 2024 of the Minister of Finance)

ANNEX II.

REPORT ON THE SITUATION OF THE ENTERPRISE AND SOME VALUATION ACTIVITY INDICATORS
(Attached to Circular No. 38/2024/TT-BTC dated May 16, 2024 of the Minister of Finance)

REPORT

Situation of the enterprise and some valuation activity indicators

Respectfully submitted to: Ministry of Finance (Price Management Department)

Company …reports the situation of the enterprise and some valuation activity indicators for the year …as follows:

1. General situation of the enterprise

- Name of the valuation enterprise;

- Type of enterprise: …

- Main office address, transaction address:

- Email and contact phone number (if available):

- Enterprise valuation service business license code issued by the Ministry of Finance: …/TĐG, first issuance date …, reissuance date …;

- Information about the legal representative of the valuation enterprise, including: full name, year of birth, gender, valuation reviewer identification number;

- Name, head, and address of branches of the valuation enterprise;

- Details of capital contributions from organizational members (if any) for joint-stock companies with two or more shareholders and corporations during the reporting period, including representatives of organizational capital contributions; including all relevant times related to capital contributions within the reporting period;

- Details of valuation reviewer capital contributions at the time of reporting for the company; including all relevant times related to capital contributions within the reporting period.

- Professional liability insurance purchased: yes/no

+ Insurance provider information, insurance contract number (if any): ...

- Establishment of professional risk reserves: yes/no

+ Reserve amount established for the reporting year: …; Total reserve balance: …

2. Valuation activities during the reporting period

2.1. Valuation activity indicators by service type:

2.2. Valuation activity results

Unit of measurement: Million dong

2.3. Consulting to support state management activities on prices and valuations

Number of consultations (if any) accompanied by supporting documentation,

2.4. Research activities

Number of articles and scientific research published in journals with valuation sections approved by authorized state agencies, and journals included in the list of scientific journals for scoring by the Economics Professor Council as stipulated by law (if any), accompanied by supporting documentation including: photocopies of journal table of contents with article and research titles, and photocopies of published articles and research.

3. Limitations and causes of limitations (if any)

4. Directions and tasks; proposals and recommendations (if any)

The enterprise commits to bear legal responsibility for the accuracy and legality of the above report contents.

ANNEX III

REPORT ON THE LIST OF VALUATION REVIEWERS AT THE ENTERPRISE
(For annual notification of the list of valuation reviewers)
(Attached to Circular No. 38/2024/TT-BTC dated May 16, 2024 of the Minister of Finance)

Respectfully submitted to: Ministry of Finance (Price Management Department)

LIST OF VALUATION REVIEWERS AT THE ENTERPRISE
(For annual notification of the list of valuation reviewers)

Type of enterprise: …ⁱ……………

* Supporting documents include:

- Copy of confirmation of knowledge update on valuation according to the field of expertise still valid at the time of registration for practice or proof of having updated knowledge on valuation as prescribed, except when the valuation reviewer card was issued less than one year prior to January 1 of the year immediately preceding the reporting year;

- Copy of business registration certificate;

- Declaration of shareholding ratio for valuation reviewers who are shareholders of joint-stock valuation enterprises;

* The enterprise commits

...............^iv…commits:

1. To bear legal responsibility for the accuracy and legality of the contents declared herein and the documents and materials attached to this List.

2. .............^iv…commits to strictly comply with the laws on valuation.