Circular No. 39/2004/TT-BTC guiding the procedures, formalities, and financial handling for the activities of purchasing, selling, transferring, receiving, and processing debts and surplus assets of enterprises.

CIRCULAR

Guidelines on the sequence, procedures, and financial handling for the activities of purchasing, selling,

transferring, receiving, processing debts, and surplus assets of enterprises.

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Pursuant to Decree No. 69/2002/NĐ-CP dated July 12, 2002, of the Government on management and resolution of overdue debts of state-owned enterprises.

Pursuant to Decision No. 109/2003/QĐ-TTg dated June 5, 2003, of the Prime Minister on the establishment of the Company for Purchasing, Selling Debts, and Surplus Assets of Enterprises.

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

The Ministry of Finance hereby provides guidelines on the sequence, procedures, and financial handling for the activities of purchasing, selling, transferring, receiving, processing debts, and surplus assets of enterprises as follows:

Part One:

GENERAL PROVISIONS

Article 1. Scope of Application:

This Circular guides the sequence, procedures, and financial handling for the following activities: purchasing, selling, processing debts, and surplus assets of enterprises, economic organizations, and individuals with the Company for Purchasing, Selling Debts, and Surplus Assets of Enterprises based on mutual agreement; purchasing, selling, processing debts, and surplus assets according to the designation of the Prime Minister; transferring, receiving, processing debts, and assets excluded from the value of the enterprise when implementing ownership conversion of state-owned enterprises.

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

2.1. The Company for Purchasing, Selling Debts, and Surplus Assets of Enterprises established pursuant to Decision No. 109/2003/QĐ-TTg dated June 5, 2003, of the Prime Minister (hereinafter referred to as the Debt Purchase and Sale Company);

2.2. Enterprises and organizations with receivables, surplus assets sold to the Debt Purchase and Sale Company (creditors, asset owners);

2.3. Economic organizations purchasing debts and surplus assets of the Debt Purchase and Sale Company;

2.4. Enterprises, organizations, and individuals with payables (debtors);

2.5. Economic organizations currently holding debts and assets excluded from the value of the enterprise when converting ownership of state-owned enterprises.

3. The terms used in this Circular shall be understood as follows:

3.1. "Overdue debt" refers to receivables and payables that have exceeded the payment deadline but remain unpaid.

3.2. "Creditor" refers to enterprises and organizations with receivables.

3.3. "Debtor" refers to enterprises, organizations, and individuals with payables.

3.4. "Asset owner" refers to enterprises and organizations with ownership rights over assets.

3.5. "Surplus assets" refer to finished products, raw materials, goods, fixed assets under the ownership of the enterprise remaining in inventory or stagnant but not needed for use.

3.6. "Purchasing, selling debts, surplus assets" refers to creditors with receivables and asset owners with surplus assets selling to the Debt Purchase and Sale Company. The Debt Purchase and Sale Company becomes the new creditor of the debtor and the new owner of the asset.

3.7. "Purchasing, selling debts, surplus assets by designation" refers to the purchase and sale of debts and surplus assets designated by the Prime Minister.

4. The Debt Purchase and Sale Company has the right to purchase, sell, and process debts and surplus assets including the value of land use rights at agreed prices and by designation; it also has the right to sell collateral assets for debts purchased by the Debt Purchase and Sale Company, including the value of land use rights, in accordance with current regulations.

5. Enterprises and economic organizations of all forms of ownership have the right to purchase and sell debts and surplus assets at agreed prices to the Debt Purchase and Sale Company.

6. When the Contract for Purchasing, Selling Debts, and Surplus Assets becomes effective, the parties have the following rights and obligations:

- All rights and obligations of the creditor (seller of debt), asset owner (seller of asset) are transferred to the Debt Purchase and Sale Company.

- Creditors and asset owners are responsible for transferring all debts and assets along with related documents in accordance with the provisions of the contract and current laws. They must also inform the debtor about the change of creditor for the sold debt.

- The Debt Purchase and Sale Company inherits all rights and obligations of the creditor for the purchased debt and has the rights and obligations of the asset owner for the purchased asset.

- Debtors are responsible for fully fulfilling their obligations to repay the debt and other obligations to the Debt Purchase and Sale Company (such as providing relevant documents and information about the debt).

7. For debts and surplus assets already purchased or assigned by the State for processing, the Debt Purchase and Sale Company may handle them through the following methods: collecting debts, selling collateral assets; leasing surplus assets; using debts and surplus assets to contribute capital to joint stock companies, joint ventures, and business cooperation; selling debts and surplus assets; repairing and upgrading surplus assets for sale, lease, contribution to joint stock companies, joint ventures, and business cooperation; or other methods not prohibited by law. The sequence, procedures, and authority for handling debts and surplus assets of the Debt Purchase and Sale Company are specifically regulated by the Financial Management Regulation of the Debt Purchase and Sale Company issued by the Minister of Finance.

8. Activities of purchasing and selling debts and surplus assets must be documented in accordance with current regulations.

9. The buyer of debt is responsible for tracking and accounting for the cost of purchasing debt and surplus assets at the price (including the purchase price of debt, purchase price of surplus assets recorded on the document, transportation costs of assets, repair and upgrade costs of assets - if applicable) and tracking the original value of the debt on the off-balance sheet account.

10. When enterprises and economic organizations purchase debts and surplus assets from the Debt Purchase and Sale Company, they shall implement at market prices through negotiation, bidding, or auction in accordance with current regulations. The sequence, procedures, and financial handling are applied similarly to the activities of selling debts and surplus assets of the Debt Purchase and Sale Company.

11. Activities of purchasing, selling, recovering, and processing overdue debts, including selling collateral assets to recover debts as stipulated in this Circular, are not subject to value-added tax.

Part Two

SPECIFIC PROVISIONS

I. REGARDING THE ACTIVITY OF PURCHASING AND SELLING DEBTS AND INVENTORY AS PER AGREEMENT

1. Procedure and formalities for purchasing and selling debts and inventory

1.1. The debt purchasing and selling company, creditors with outstanding debts shall proactively approach to understand the demand for purchasing and selling debts. When there is a need to sell debts, the creditor provides relevant documents related to the debt to the debt purchasing and selling company.

1.2. The purchase and sale of debts shall be carried out on the basis of a contract signed between both parties.

1.3. The purchase and sale of debts and inventory shall be conducted at market prices through negotiated agreements, bidding, and auction as prescribed.

2. Financial handling for the activity of purchasing and selling, and settling debts

2.1. For the debt purchasing and selling company:

Purchased debts shall be considered a special type of goods. Revenue, expenses, and business results related to the activity of purchasing and selling debts shall be regulated in the Financial Management Charter of the Debt Purchasing and Selling Company.

2.2. For the debtor selling debts:

a. In the case where the sold debt is a receivable that has no recovery potential and the creditor has processed it according to state regulations and is being monitored outside the balance sheet, the amount recovered from selling this debt shall be included in other income of the seller.

b. In the case where the sold debt is being monitored within the balance sheet, the proceeds from selling the debt shall not be included in revenue or other income of the debtor but recorded as a reduction in the corresponding receivable. The difference between the amount received from selling the debt and its book value shall be offset by the following sources in order:

- Provision for doubtful receivables or risk provision (for credit organizations).

- If the provision for doubtful receivables or risk provision is insufficient to offset the difference, the remaining portion shall be recorded as operating expenses.

+ For state-owned enterprises: In the event that recording in operating expenses results in losses over two consecutive years and the enterprise is unable to cover these losses and is not subject to dissolution or bankruptcy, the enterprise shall prepare a report to submit to the competent state authority for examination and decision to reduce the state capital in the enterprise according to current regulations.

+ For state-owned enterprises undergoing ownership transformation: In the event that recording in operating expenses results in losses, the loss shall be deducted from the state capital in the enterprise before transformation corresponding to the amount of the loss.

2.3. For the debtor:

After completing the debt payment, if the actual amount paid accepted by the debt purchasing and selling company is lower than the book value of the debt, the difference shall be recorded as other income.

In the case where the actual value of the debt used for equity contribution, joint venture contribution, or business cooperation accepted by the debt purchasing and selling company is lower than the book value of the debt, the difference shall be recorded as other income.

3. Financial handling for the activity of purchasing and selling inventory

3.1. For the debt purchasing and selling company:

Purchased assets shall be considered goods. Revenue, expenses, and business results related to the activity of purchasing and selling assets shall be implemented according to the provisions of the Financial Management Charter of the Debt Purchasing and Selling Company.

3.2. For the asset-selling enterprise:

- The enterprise may sell unused or obsolete assets to recover funds for more effective business purposes. Specifically, for state-owned enterprises, the authority to decide on selling assets and the process of transferring assets shall be carried out according to current state regulations.

- The proceeds from selling assets, after deducting the costs of transferring assets (remaining value on the books), shall be returned to the capital. If the proceeds from selling assets (after deducting transfer costs) exceed the remaining value of the asset on the books, the difference shall be recorded as income of the enterprise. Conversely, if the proceeds are less, the difference shall be recorded as an expense of the enterprise.

II. REGARDING THE ACTIVITY OF PURCHASING AND SELLING DEBTS AND INVENTORY AS PER DIRECTIVE

1. Objectives eligible to sell debts and inventory under directive

1.1. State-owned enterprises implementing shareholding, in cases where the value of state capital in the enterprise is insufficient to settle accumulated losses and unrecoverable debts, or after reducing the value of state capital in the enterprise, the remaining value is insufficient to ensure the required state capital participation in the joint-stock company according to the approved plan.

1.2. State-owned enterprises that need to retain 100% state capital according to the restructuring, modernization, and development project approved by the Prime Minister, which are suffering losses, unable to pay debts, and have debts and inventory arising from the following reasons:

- Implementation of decisions by competent state authorities.

- Changes in state mechanisms and policies directly affecting the enterprise.

- Other objective and unforeseeable reasons such as natural disasters, epidemics.

1.3. Other entities as decided by the Prime Minister.

2. Procedure and formalities for purchasing and selling debts and inventory under directive

2.1. Enterprises with debts and inventory falling under the provisions of point 1, section II, part two of this Circular shall be responsible for preparing relevant files on debts and inventory, including:

- Proposal for debt settlement and inventory disposal: clearly stating the reasons for requesting to sell debts and inventory under directive.

- An approved business plan (for case 1.2, section II).

- Valuation report of the enterprise before transformation by the Enterprise Valuation Committee (for case 1.1, section II).

- Relevant documents related to debts and inventory such as decisions by competent authorities regarding debts and inventory, economic contracts, reconciliation statements, land use certificates...

- Financial reports of the last three years.

2.2. The file shall be submitted to the representative of the enterprise's owner (Minister, Head of equivalent ministry, Chairman of the People's Committee of provinces and centrally-administered cities, Board of Directors of State-owned Corporations), Ministry of Finance.

2.3. Within forty-five days from the date of receiving the file, the Representative of the enterprise owner shall take the lead in jointly with relevant competent agencies to appraise the sale price of the debt and remaining assets and submit to the Ministry of Finance for the Prime Minister's decision.

2.4. Based on the decision to purchase debts and assets according to the designation, the Debt Purchasing and Selling Company and enterprises with debts and remaining assets shall conclude a debt purchasing and selling contract in accordance with the regulations.

2.5. The Debt Purchasing and Selling Company shall be responsible for organizing the handling of designated purchased debts and remaining assets through negotiation, bidding, and auction in accordance with current regulations and the Financial Regulation of the Company.

Necessary repairs and upgrades of assets purchased according to the designation, aimed at increasing their value and facilitating the disposal of remaining assets to recover capital, shall be carried out by the Debt Purchasing and Selling Company using its own funds. For assets with anticipated repair and upgrade costs of one billion dong or more, the Debt Purchasing and Selling Company must develop a repair and upgrade plan to be submitted to the Ministry of Finance for review and approval before implementation.

In case after two years from the purchase date, the Debt Purchasing and Selling Company has utilized measures and forms to recover debts and sell remaining assets but still fails to recover the debts or sell the assets, the Company shall prepare a report to the Minister of Finance regarding the handling plan.

3. Financial treatment for the activities of purchasing and selling designated debts and remaining assets

3.1. Regarding the Debt Purchasing and Selling Company

- When conducting the purchase of designated debts and remaining assets, the Debt Purchasing and Selling Company shall be provided with funds from the State-owned enterprise reform cost by the Ministry of Finance to:

+ Pay the seller according to the designated valuation price after both parties sign the purchase and sale contract.

+ Compensate for operational costs, acceptance, and management of debts and remaining assets at 1% of the value of the debts and remaining assets according to the designated valuation price.

- The recovered value of the debts (from collecting from customers, selling collateral or selling debts), and the proceeds from selling remaining assets shall be handled as follows:

+ Covering repair and upgrade costs of the assets (if applicable)

+ Allocating 10% of the recovered debt and asset amounts to the Debt Purchasing and Selling Company to cover appraisal and auction costs (if applicable) and to encourage prompt and effective handling of designated purchased debts and remaining assets to recover capital for the State.

+ The remainder shall be deposited into the State budget (from the State-owned enterprise reform cost).

- In case the Debt Purchasing and Selling Company uses the purchased debts and remaining assets to convert into share capital, joint venture capital, or business cooperation capital, the increased capital value after deducting repair and upgrade costs and appraisal costs (if applicable) shall be recorded as an increase in the State budget capital allocated for the operations of the Debt Purchasing and Selling Company.

- Quarterly, the Debt Purchasing and Selling Company shall report to the Ministry of Finance on the results of purchasing, selling, and handling designated debts and remaining assets.

3.2. Regarding enterprises selling debts and remaining assets

For enterprises selling debts and remaining assets, financial treatment shall be implemented in accordance with the provisions of Section 2.2, Point 2, Part II, Chapter I and Point 3, Section I, Part II of this Circular.

3.3. Regarding debtors

For debtors, financial treatment shall be implemented in accordance with the provisions of Section 2.3, Point 2, Part II, Chapter I of this Circular.

III. FOR ACTIVITIES OF HANDOVER, ACCEPTANCE, AND HANDLING OF DEBTS AND ASSETS NOT INCLUDED IN THE ENTERPRISE VALUE WHEN TRANSFERRING STATE-OWNED ENTERPRISE OWNERSHIP

1. Handover and Acceptance

1.1. The party handing over:

1.1.1. Representatives of owners of debts and assets excluded from the enterprise value when transferring state-owned enterprise ownership: Ministries, ministerial-level agencies for enterprises under their respective ministries, Chairmen of People's Committees of provinces and centrally-administered cities for enterprises established by decisions of provincial and centrally-administered city People's Committees, and Boards of Directors of State-owned Corporations for member enterprises of those corporations. The representative may delegate the enterprise currently holding the debts and assets to perform the handover.

1.1.2. The enterprise transferring ownership currently holding the debts and assets excluded from the enterprise value.

1.2. The party accepting is the Debt Purchasing and Selling Company.

1.3. Content of handover and acceptance of debts and assets

- Debts receivable:

+ The handing-over party classifies according to criteria: complete documentation, incomplete documentation; debtor still exists, debtor no longer exists.

+ Handover and acceptance of debts with complete documentation and where the debtor still exists.

+ For debts and debtors no longer existing, and debts without complete documentation, the handing-over party shall handle them independently and they do not fall within the scope of handover to the Debt Purchasing and Selling Company.

- Assets:

+ The handing-over party classifies assets according to criteria: assets that can be sold, assets to be scrapped.

+ Handover and acceptance of assets that can be sold to recover capital for the State.

+ For assets that must be scrapped such as chemicals, pesticides past their expiration date, deteriorated leather materials, etc., the handing-over party shall handle them independently and they do not fall within the scope of handover to the Debt Purchasing and Selling Company.

2. Procedures for handover and acceptance

2.1. The representative of the owner (or the delegated person) together with the enterprise currently holding the debts and assets excluded from the enterprise value or the enterprise transferring ownership which has decided on the enterprise value (collectively referred to as the enterprise) shall hand over the debts and assets to the Debt Purchasing and Selling Company.

2.2. A handover record must be established during the handover process. The record must have signatures of all three parties (the handing-over party, the enterprise, and the Debt Purchasing and Selling Company). The main contents of the record include:

- Quantity and value according to accounting records of the debts and assets excluded from the enterprise value at the time of determining the enterprise value and at the time of handover.

- Quantity and value according to accounting records of the debts and assets processed from the time of determining the enterprise value until the handover to the Debt Purchasing and Selling Company; Amounts received from processing debts and assets; amounts already paid according to regulations, amounts yet to be paid.

- Quantity and value according to accounting records of missing assets. Clearly state the reasons.

- Quantity and value of assets to be scrapped immediately.

- The quantity and value of debts that no longer exist or lack sufficient documentation shall be handled by the transferring party.

- The quantity and value of debts, assets to be transferred to the Debts Purchase and Sale Company.

3. Responsibilities of the transferring and receiving parties

3.1. Transferring Party:

3.1.1. Representative Body of the Owner:

- Direct the enterprise to prepare relevant documents and materials related to debts and assets to be transferred. Collaborate with the Debts Purchase and Sale Company and the enterprise to develop and implement a plan for the full transfer of debts and assets not included in the enterprise's value during ownership conversion.

- Direct the enterprise to handle assets that must be scrapped, debts owed by customers that no longer exist or lack sufficient documentation.

3.1.2. Enterprise:

Prepare complete documents and materials to participate in the full transfer of debts and assets not included in the enterprise's value during the state-owned enterprise ownership conversion to the Debts Purchase and Sale Company. Continue to store assets as required by the Debts Purchase and Sale Company and cooperate with the Debts Purchase and Sale Company in handling stored assets. Organize the disposal of assets that must be scrapped and debts owed by customers that no longer exist or lack sufficient documentation according to current regulations.

3.2. Receiving Party:

- Agree with the transferring party on the reception plan.

- Organize the receipt of accounts receivable, assets, and accompanying documents and records, open accounting books to track received debts and assets.

- Implement debt recovery and asset disposal according to Clause 2.5, Section II, Part II of this Circular.

- Quarterly, the Debts Purchase and Sale Company reports to the Ministry of Finance on the results of debt recovery and asset sales.

4. Financial Handling of Debts and Assets at Transfer and Reception

4.1. For the Debts Purchase and Sale Company

- The funds recovered from debt collection, asset sales, and utilization of remaining assets shall be used as follows:

+ To cover repair and upgrade costs of assets (if applicable).

+ Dedicate 20% of the recovered debt and asset amounts to the Debts Purchase and Sale Company to cover reception, management, and disposal costs; cover valuation and auction costs (if applicable) and encourage prompt and effective handling of assigned debts and assets to recover capital for the State.

+ Dedicate 10% of the recovered debt and asset amounts to the enterprise holding assets to cover management, storage, and disposal costs or organize the destruction of assets not transferred to the Debts Purchase and Sale Company (assets that the enterprise must destroy).

+ The remainder shall be remitted to the State budget (costs for state-owned enterprise reform).

- In cases where the Debts Purchase and Sale Company uses transferred debts and remaining assets to convert into share capital contributions, joint venture contributions, or business cooperation contributions, the value converted into these forms after deducting repair and upgrade costs of assets (if applicable) shall be recorded as increased State budget capital for the Debts Purchase and Sale Company's operations.

4.2. For the enterprise: Based on the transfer record of debts and assets, the enterprise shall process the reduction in the value of transferred assets and debts accordingly. The enterprise shall benefit from the proceeds from holding and participating in the sale of assets as stipulated in Point 4.1, Section III - Part II of this Circular.

4.3. For State Corporations: When transferring debts and assets excluded from the enterprise's value to the Debts Purchase and Sale Company, the owner shall account for a corresponding reduction in capital.

4.4. For Debtors: For debtors, financial handling shall be carried out according to Subparagraph 2.3, Point 2, Section I - Part II of this Circular.

Part Three

IMPLEMENTATION

This Circular shall take effect fifteen days from the date of publication in the Official Gazette. All conflicting provisions are hereby abolished. Any difficulties encountered during implementation should be reported to the Ministry of Finance by relevant ministries, sectors, localities, and enterprises for study and resolution./.