Circular No. 45/2024/TT-BTC Issuing the General Pricing Method for Goods and Services State-Set Priced

CIRCULAR
Issuing general valuation methods

for goods and services priced by the State

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 on the general valuation methods for goods and services priced by the State.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular stipulates the general valuation methods for goods and services priced by the State as provided for in Clause 2, Article 23 of the Price Law.

2. The land valuation method and other goods and service valuation methods prescribed in Clause 3, Article 23 of the Price Law shall be within the purview of the Minister, the head of a ministry-level agency managing a sector or field, or shall be submitted to the competent authority for issuance.

Article 2. Applicability

Organizations and individuals engaged in trading goods and services; state agencies; organizations and individuals related to the pricing activities of goods and services priced by the State.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. The cost method is a valuation method that approaches the price of goods and services from reasonable and legitimate production and business costs, profit (if applicable) or accumulation as prescribed by law (if applicable), and financial obligations as prescribed by law.

2. The comparison method is a valuation method that approaches the price of goods and services from information about comparable prices collected.

Chapter II

GENERAL VALUATION METHODS FOR GOODS,

SERVICES PRICED BY THE STATE

Section 1

VALUATION METHODS, SELECTION

OF VALUATION METHODS

Article 4. Valuation methods, selection of valuation methods

1. The general valuation methods for goods and services priced by the State prescribed in this Circular include two (02) valuation methods: the cost method and the comparison method.

2. Based on the characteristics of goods and services and specific conditions regarding production and business, market, circulation of goods and services, organizations and individuals select appropriate valuation methods for the goods and services to be valued.

Section 2

COST METHOD

Article 5. Some general principles

1. During the production and business of goods and services, if additional income is generated, it must be deducted from the main product's costs; if by-products can be recovered for sale or further used as raw materials for producing other products, costs must be allocated to deduct from the main product's production costs; if by-products cannot be recovered for sale or use, no allocation of costs is required.

2. For costs and pricing factors related to multiple goods and services that cannot be separated, they need to be aggregated and allocated according to appropriate criteria such as revenue, costs, quantity, volume, time, and other relevant criteria suitable for the industry, field, and regulations of the goods and services. In cases where costs and pricing factors are used for production and business over multiple periods and years, gradual allocation into production and business costs should be implemented. In cases where costs and pricing factors arise over multiple periods and years, data from multiple periods and years must be compiled for allocation.

3. Among the pricing costs, those included in economic and technical norms, cost norms issued by authorized state agencies, state policies, state-set prices, legal provisions (regarding tax, accounting, statistics, and related laws), internal expenditure regulations of units as prescribed by law shall be calculated according to these provisions. Units have the responsibility to regularly review their internal expenditure regulations to ensure economy, efficiency, compliance with state policies, laws, and bear legal responsibility for their internal expenditure regulations. State agencies have the responsibility to regularly review the economic and technical norms, cost norms they issue to amend and supplement them in accordance with the law.

4. If there is information about material costs, outsourcing costs, labor costs, sales costs, management costs on the market, they may be determined based on price information and levels as prescribed in Articles 13, 14, and 15 of this Circular.

5. Necessary costs for producing and trading goods and services according to the characteristics of each industry and field as prescribed (if applicable) shall be included in the price, such as: manuscript organization, compilation, creation, staging, performance, testing, certification costs; copyright, author remuneration costs; editing, proofreading, design, printing costs; evaluation costs; experimental teaching costs; book usage training costs; publishing management costs; anti-counterfeiting stamp, electronic learning material costs; sample book printing costs; warehouse costs; temporary residence and construction management costs; machinery and equipment operation costs; warehouse maintenance, temporary residence and construction management costs; repair design costs; construction supervision costs; traffic safety assurance organization costs during construction; project management costs; consulting costs; construction insurance costs; management and operational costs to ensure traffic during the period when infrastructure assets cease operations according to the decision of the competent authority and other costs.

6. Depreciation of fixed assets shall be carried out in accordance with the Ministry of Finance's regulations on management, use, and depreciation of fixed assets.

7. In cases subject to value-added tax under the deduction method, the price of materials and input factors does not include value-added tax. In cases not subject to value-added tax or subject to value-added tax under the direct payment method, the price of materials and input factors includes value-added tax.

8. Expenses not considered reasonable and legitimate for determining the price of goods and services

a) Expenses not considered reasonable and legitimate for determining the price of goods and services shall be implemented in accordance with the law on expenses not deductible when determining taxable income for corporate income tax calculation and related legal documents.

b) Expenses that have been guaranteed by the state budget; amounts already included in the price of goods and services to be priced; costs already included in the prices of other goods and services of organizations and individuals.

Article 6. Price of goods and services of organizations and individuals engaged in commerce

1. Pricing formula

Where:

a) The purchase price of goods and services is determined by subtracting commercial discounts, purchase price reductions (if any), and other reduction items (if any) from the purchase price of goods and services recorded on invoices, contracts, and other documents as prescribed by law, and adding other reasonable and lawful expenses as prescribed by law (if any).

b) Selling expenses, management expenses, and financial expenses are determined according to the provisions of Article 10 of this Circular.

c) Profit is determined according to the provisions of Article 11 of this Circular.

d) Value-added tax and other taxes shall be implemented in accordance with the laws on taxation.

2. Cost calculation table for one unit of goods and services of organizations and individuals engaged in commerce

Article 7. Price of imported goods

1. Pricing formula

Where:

a) Import cost is determined according to the following formula:

Where:

- The purchase price of imported goods is the price of goods reaching the first Vietnamese customs port.

The purchase price of goods reaching the first Vietnamese customs port equals [(purchase price in the foreign market plus expenses incurred to bring the goods to Vietnam (if any) plus other amounts to be added when determining the value of imported goods as prescribed (if any) minus other amounts to be deducted when determining the value of imported goods as prescribed (if any)] multiplied by the exchange rate for converting foreign currency.

The exchange rate for converting foreign currency is calculated based on the actual exchange rate that the organization or individual has settled with the bank (where the organization or individual conducts transactions) when borrowing or purchasing foreign currency to buy goods. In cases where the organization or individual has not yet settled with the bank, it is calculated based on the exchange rate agreed upon in the foreign currency purchase and sale contract between the organization or individual and the commercial bank or the selling rate of the commercial bank where the organization or individual borrowed or purchased foreign currency at the time of determining the price.

- Import tax, special consumption tax, and other taxes and fees arising at the import stage (if any) shall be implemented in accordance with the laws on taxes and fees.

- Other monetary expenses as prescribed (if any).

b) Selling expenses, management expenses, and financial expenses are determined according to the provisions of Article 10 of this Circular.

c) Profit is determined according to the provisions of Article 11 of this Circular.

d) Value-added tax and other taxes shall be implemented in accordance with the laws on taxation.

2. Cost calculation table for one unit of imported goods

Article 8. Price of goods and services produced domestically

1. Pricing formula

Where:

a) The cost of goods and services produced domestically is determined according to the following formula:

Where:

- The production cost of goods and services produced domestically is determined in accordance with the provisions of Article 9 of this Circular;

- Selling expenses, management expenses, financial expenses are determined in accordance with the provisions of Article 10 of this Circular;

b) Profit is determined in accordance with the provisions of Article 11 of this Circular;

c) Special consumption tax, value-added tax, and other taxes shall be implemented in accordance with the laws on taxation.

2. Calculation table for the cost of one (01) unit of goods and services produced domestically

Article 9. Production cost of goods and services produced domestically

1. Direct material costs include raw material costs, material costs, tool costs, drug costs, chemical costs, equipment costs, fuel costs, energy costs, and other material costs (hereinafter referred to as materials) used directly for producing goods and services.

Material costs are determined as follows:

Material costs = Material consumption rate x Material price

a) The material consumption rate is determined based on economic and technical norms issued by state agencies;

b) Material price

The material price used to calculate the price of goods and services is determined in accordance with the standards, types, and quality of materials used, linked to the location where goods and services are produced. Specifically, as follows:

For materials priced by the State: calculate the price according to the State's regulations plus (+) reasonable and lawful costs (if any).

For materials not subject to State pricing: calculate according to the invoice and documents in accordance with the law, minus trade discounts, purchase price reductions (if any), and other reduction items (if any); if there are insufficient invoices and documents, determine the price according to Articles 13, 14, and 15 of this Circular plus (+) reasonable and lawful costs to bring the materials to the unit's warehouse (if any). In cases where materials are purchased from households or individuals without invoices as required by the law on taxation, a list of purchases of goods and services without invoices must be established in accordance with the law on taxation.

For directly imported materials used in production: calculate according to the import cost price specified in point a, clause 1, Article 7 of this Circular.

For self-manufactured materials: calculate according to the actual warehouse price plus (+) reasonable and lawful costs during the production process (if any).

For leased processing materials: calculate according to the actual warehouse price for processing plus (+) processing fees plus (+) other reasonable and lawful costs to send materials for processing (if any) and back to the unit's warehouse (if any).

Prices of various materials, processing leases, transportation, storage, procurement, and other costs (if any) must be recorded on invoices and documents in accordance with the law.

2. Direct labor costs

a) Direct labor costs include payments made to direct production workers such as wage costs, labor costs, and allowances with the nature of wages, social insurance contributions, health insurance contributions, unemployment insurance contributions, and union dues for direct production workers in accordance with the Labor Code, state policies, and relevant laws;

b) Wage costs are determined as follows:

Wage costs = Labor quota x Wage rate

The labor quota is determined based on economic and technical norms issued by competent state agencies.

The wage rate is implemented in accordance with the laws on wages and relevant laws;

c) Labor costs are determined based on economic and technical norms, employment contracts, collective labor agreements, and other legally binding agreements in accordance with labor laws, relevant laws, and internal expenditure regulations that units must establish.

3. Direct depreciation costs of fixed assets

Depreciation costs of fixed assets are implemented in accordance with the Ministry of Finance's regulations on the management, use, and depreciation of fixed assets.

If direct depreciation costs of fixed assets serving production and business have already been included in common production costs, they shall not be calculated under this provision.

4. Common production costs

Common production costs include costs incurred for common production activities at workshops, departments, teams, clinics, construction sites, and other units (hereinafter referred to as workshops) in accordance with the law to serve the production and sale of goods and services, including:

a) Workshop staff costs: these are wage costs and allowances with the nature of wages paid to workshop managers, and social insurance contributions, health insurance contributions, unemployment insurance contributions, and union dues in accordance with the Labor Code, state policies, and relevant laws;

b) Material costs for workshops such as materials used to repair fixed assets for workshops, materials used for workshop management, temporary shed costs;

c) Depreciation costs of fixed assets used for workshop operations are implemented in accordance with the Ministry of Finance's regulations on the management, use, and depreciation of fixed assets. If already calculated under clause 3 of this Article, it shall not be calculated under this clause;

d) Service costs purchased externally to serve workshop operations such as electricity costs, water costs, telephone costs, fixed asset repair costs, rental costs for fixed assets, payments to contractors (if any), and other external purchase costs (if any);

đ) Other reasonable and lawful costs in cash (if any) prescribed by law to serve workshop operations outside the aforementioned costs.

5. Other reasonable and lawful costs (if any) prescribed by law to serve production not mentioned above.

Article 10. Selling expenses, management expenses, financial expenses

1. Selling expenses

Selling expenses include reasonable and lawful costs incurred during the process of selling goods and providing services:

a) Costs paid to sales staff, packaging, transportation, storage of goods and services including wages, salaries, and allowances with the nature of wages, social insurance contributions, health insurance contributions, unemployment insurance contributions, trade union fees for employees in accordance with the Labor Code, state policies, and relevant laws;

b) Material costs and packaging materials used for packaging, storage, transportation, handling, consumption of goods and products; materials used for repairing and maintaining fixed assets used by the sales department;

c) Costs related to tools and equipment serving the process of consuming goods and services such as measuring instruments, computing devices, working tools;

d) Depreciation costs of fixed assets in the storage and sales departments such as warehouses, stores, docks, loading and unloading equipment, transportation means, computing and measuring devices, quality testing equipment. Fixed asset depreciation is carried out in accordance with the regulations of the Ministry of Finance on the management, use, and depreciation of fixed assets;

đ) Introduction and warranty costs;

e) Outsourced service costs for sales activities such as external repair costs for fixed assets directly serving the sales process, warehouse rental fees, dock rental fees, product transportation fees, commission fees paid to sales agents;

g) Other reasonable and lawful monetary costs in the sales process other than those mentioned above in accordance with the provisions of the law;

h) For goods and services purchased and paid for from the state budget, advertising, marketing, promotional, and brokerage and agency commission costs shall not be included;

2. Management expenses

Management expenses include:

a) Employee management costs including payments made to the management department such as wages and allowances with the nature of wages, social insurance contributions, health insurance contributions, unemployment insurance contributions, trade union fees for management staff in accordance with the Labor Code, state policies, and relevant laws;

b) Material costs used for management work, materials used for repairing fixed assets, tools, and equipment;

c) Repair costs of fixed assets, transportation means, transmission facilities, machinery, equipment, tools, and equipment used for management work;

d) Depreciation costs of fixed assets used by the management department such as office buildings, warehouses, structures, transportation and transmission facilities, management machinery and equipment used in offices, and other assets. Fixed asset depreciation is carried out in accordance with the regulations of the Ministry of Finance on the management, use, and depreciation of fixed assets;

đ) Outsourced service costs for management work; costs for purchasing and using technical documents, patents that do not meet the criteria for recording as fixed assets are allocated gradually into management expenses; rental fees for fixed assets, contractor payment fees (if any);

e) Taxes, fees, and levies (if any) as prescribed by law;

g) Other common management costs outside those mentioned above such as conference fees, reception fees, travel expenses, transportation fees, female employee benefits, research and training fees, association membership fees, and other reasonable and lawful costs (if any) as prescribed by law;

3. Financial expenses

a) Financial expenses include interest costs on loans directly related to the production and business of goods and services requiring pricing and exchange rate differences (if any) during the purchase of materials and goods and allocated to individual units of products and services;

b) For goods and services purchased and paid for from the state budget: in cases where advance funding is provided, interest costs on loans corresponding to the amount of advance funding shall not be included.

Article 11. Profit

1. Based on the provisions of Article 22 of the Price Law, the determination of the profit margin (if applicable) or profit level (if applicable) or accumulation level (if applicable) ensures that the selling price of goods and services does not exceed the market selling price (for goods and services with a market price).

The profit margin is the percentage (%) of profit over revenue or net revenue or owner's equity or state investment capital assigned by the owner's representative or over total cost of goods sold, selling expenses, management expenses, and financial expenses (allocated to goods and services).

2. Method for determining the profit level

a) For goods and services circulating in the market or similar goods and services being produced and circulated in the market: the maximum profit level or maximum profit margin is determined based on the most recent audited financial report or the most recent settlement report closest to the pricing determination time of the entity producing and trading similar goods and services, or based on industry data or actual data from the preceding years of the entity;

b) For goods and services ordered by the State or assigned tasks that have not yet been circulating in the market or have no similar goods and services being produced and circulated in the market: the post-income tax profit level must ensure it does not exceed the amount allocated to two (02) welfare funds and reward funds as prescribed by law; or the maximum profit level or maximum profit margin is determined based on the most recent audited financial report or the most recent settlement report closest to the pricing determination time for other goods and services that the entity has been and is currently producing and trading;

c) The accumulation level for public service units providing goods and services is calculated into the price according to the provisions of the law: the post-income tax accumulation level must ensure it does not exceed the amount allocated to two (02) welfare and reward funds as prescribed by law; or the accumulation level does not exceed the actual surplus (allocated to goods and services) according to the most recent audited financial report or the most recent settlement report closest to the pricing determination time.

3. In cases where the competent authority stipulates the profit level or profit margin, the profit shall be calculated according to such stipulations.

Article 12. Determining Prices

1. The maximum price, minimum price, price range, and specific prices of goods and services are determined based on the costs defined according to Articles 5, 6, 7, 8, 9, and 10 of this Circular and the profit level or accumulation level determined according to Article 11 of this Circular, ensuring that the determined price is consistent with the principles and bases for pricing as prescribed in Article 22 of the Price Law.

2. In cases where specific prices of goods and services subject to State-determined maximum prices, minimum prices, or price ranges are set: the specific price is determined according to the provisions of paragraph 1 of this Article and must fall within the price range, not exceeding the maximum price and not being lower than the minimum price issued by the competent authority.

Section 3

COMPARISON METHOD

Article 13. Collection of Price Information

1. The agency, unit, organization, or individual establishing the pricing plan shall be fully responsible for the truthfulness of the price information collection process for goods and services; the agency or organization reviewing the pricing plan shall be responsible for checking the appropriateness of the use of collected information in the pricing plan.

2. Comparable Goods and Services

a) Comparable goods and services are those identical in characteristics to the goods and services being priced;

b) In cases where information on identical goods and services as stipulated in point a of this clause cannot be obtained, comparable goods and services are those with the most similar characteristics to the goods and services being priced, such as: specifications, quality, features, effects, usage purposes, production time, economic and technical features, shape, size, construction principle, main technical parameters, origin, production technology, legal characteristics, transportation, circulation, distribution, and other factors;

c) Goods and services in the defense and security sectors are not subject to the provisions of point b of this clause.

3. Information on the prices of comparable goods and services must be collected at the time of determining the price or the nearest time within 24 months prior to the determination time according to the principle of prioritizing information from the nearest time and location (domestic or foreign) to the goods and services being priced based on at least one of the following documents:

a) Prices determined, reviewed, announced, or provided by competent state agencies;

b) Actual transaction prices recorded on sales invoices by organizations and individuals in accordance with regulations, or prices recorded in purchase and sale contracts;

c) Winning bid prices, auction prices; import prices declared on customs declarations or provided by customs authorities;

d) Prices listed in quotations or offers from units producing and trading goods and services that include full information about the name, address, tax code (if applicable), and the stamp of the unit, the date of providing the information, and the validity period of the quotation or offer (if applicable);

đ) Prices collected through the Internet or mass media reports or reports from associations or through Vietnam's representative offices abroad or via email;

e) Prices surveyed and collected in the market by individuals or organizations in the form of survey information sheets including information on the name, brand, location, collected price, basic technical parameters, and related information (if any) and must be signed by the individual or members of the information collection organization;

Individuals and organizations conducting surveys and collecting information shall be fully responsible for the truthfulness of the information collection process and the results of the information collection;

g) Prices in price databases; prices of goods and services collected from other information as prescribed by law.

4. In cases where the collected price has a currency unit, it shall be converted into Vietnamese Dong based on the selling exchange rate of the Vietnam Joint Stock Commercial Bank for Foreign Trade published at the time of determining the price.

Article 14. Information Analysis

1. Identify the comparative factors of goods and services to be priced such as: specifications, quality, features, effects, usage purposes, production time, economic and technical characteristics, shape, size, construction principle, main technical parameters, origin, production technology, legal characteristics, transportation, circulation, distribution, and other relevant factors (if any); engage an organization with appraisal functions regarding the economic and technical conditions and quality of goods and services if deemed necessary.

2. Analyze to select at least three (03) comparative information on goods and services from three (03) different suppliers. In cases where there are not enough three (03) comparative information on goods and services, conduct comparisons based on the actual number of collected information.

3. Analyze related information of comparative goods and services, analyze the main comparative factors affecting the price of goods and services to be priced and adjust the price according to the following principles:

a) Take the goods and services to be priced as the standard to adjust the prices of comparative goods and services according to the comparative factors of the goods and services to be priced.

When adjusting the price based on the difference of one comparative factor, fix the remaining comparative factors (consider them identical).

Factors in the goods and services to be priced that are inferior compared to comparative goods and services shall reduce (-) the price level of comparative goods and services. Factors in the goods and services to be priced that are superior compared to comparative goods and services shall increase (+) the price level of comparative goods and services. Factors in the goods and services to be priced that are identical to comparative goods and services shall maintain the price level of comparative goods and services unchanged.

The price adjustment due to differences in comparative factors may be implemented either in absolute monetary terms or as a percentage (%) increase or decrease relative to the price of comparative goods and services.

When adjusting the price of comparative goods and services according to each comparative factor, first adjust the comparative factors in absolute monetary terms, then adjust according to percentage (%) changes. The price after adjustment in absolute monetary terms will be used for subsequent percentage (%) adjustments.

The total value of price adjustment for comparative goods and services is the sum of the adjustment levels according to comparative factors with negative signs (price reduction) and positive signs (price increase).

The price level of goods and services after adjustment equals the price level of comparative goods and services plus (+) or minus (-) the total value of price adjustment for those comparative goods and services.

Determine the price level for goods and services to be priced by taking the representative adjusted price level of comparative goods and services or the average price level of the adjusted prices of comparative goods and services.

The representative adjusted price level of comparative goods and services is the adjusted price level of each selected comparative goods and services based on the following criteria:

- Comparative goods and services with the fewest price adjustments.

- Comparative goods and services with the smallest adjustment ratio for each comparative factor.

- Comparative goods and services with the smallest net adjustment value;

b) In cases where it is not possible to determine the adjustment ratio and specific adjustment levels of comparative factors: explain the basis for calculation to determine the price level of goods and services to be priced.

Article 15. Determining Price

1. The maximum price, minimum price, price range, and specific price of goods and services to be priced shall be determined based on the information collected and analyzed as prescribed in Articles 13 and 14 of this Circular, ensuring that the determined price is consistent with the principles and bases for pricing set forth in Article 22 of the Law on Prices.

2. In cases where specific prices of goods and services subject to State-determined maximum prices, minimum prices, or price ranges are set: the specific price is determined according to the provisions of paragraph 1 of this Article and must fall within the price range, not exceeding the maximum price and not being lower than the minimum price issued by the competent authority.

Chapter III

IMPLEMENTING PROVISIONS

Article 16. Transitional Provisions

In cases where goods and services priced by the State have already established pricing plans according to the pricing methods issued by competent state agencies and submitted the relevant documents in accordance with the law to the competent authority for review of the pricing plan before the effective date of this Circular, they shall continue to be implemented according to those pricing methods.

Article 17. Effective Date

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

2. Circular No. 25/2014/TT-BTC dated February 17, 2014, of the Minister of Finance, which stipulates the general pricing method for goods and services, shall cease to be effective from the date this Circular takes effect./.