Circular No. 49/2018/TT-BTC guiding the financial management mechanism for the Vietnam Vehicle Inspection Agency

Pursuant to the Law on Prices No. 11/2012/QH13 dated June 20, 2012;

Pursuant to the Enterprise Law No. 68/2014/QH13 dated November 26, 2014;

Pursuant to the Law on Management and Use of State Capital for Production and Business at Enterprises No. 69/2014/QH13 dated November 26, 2014;

Pursuant to the Law on Fees and Charges No. 97/2015/QH13 dated November 25, 2015;

Pursuant to the Government Decree No. 177/2013/NĐ-CP dated November 14, 2013 detailing and guiding the implementation of certain provisions of the Law on Prices and the Government Decree No. 149/2016/NĐ-CP dated November 11, 2016 amending and supplementing certain provisions of the Government Decree No. 177/2013/NĐ-CP; the Government Decree No. 120/2016/NĐ-CP dated August 23, 2016 detailing and guiding the implementation of certain provisions of the Law on Fees and Charges;

Pursuant to Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on investment of state capital in enterprises and management and use of capital and assets in enterprises; The Government Decree No. 32/2018/NĐ-CP dated March 8, 2018 Amending and supplementing certain provisions of the Government Decree No. 91/2015/NĐ-CP;

Pursuant to the Government Decree No. 206/2013/NĐ-CP dated December 9, 2013 of the Government on  Managing debts of enterprises wholly owned by the State;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to the Prime Minister's Decision No. 67/2013/QĐ-TTg dated November 12, 2013 on the financial mechanism of the Vietnam Vehicle Inspection Agency;

At the proposal of the Director of the Enterprise Finance Department,

The Minister of Finance issues this Circular guiding the financial management mechanism for the Vietnam Vehicle Inspection Agency.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Article 1. This Circular stipulates the financial management mechanism applicable to the Vietnam Vehicle Inspection Agency and its subordinate units operating under the model of a limited liability company wholly owned by the State with 100% state capital contribution;

Article 2. Administrative and public service expenditure revenues and expenditures allocated by the State Budget to the Vietnam Vehicle Inspection Agency shall be managed, accounted for, and settled according to the provisions of the State Budget Law and enterprise accounting regulations.

Chapter II
SPECIFIC PROVISIONS

I. MANAGEMENT OF CAPITAL AND USE OF ASSETS

Article 2. Operating Capital of the Vietnam Vehicle Inspection Agency

The operating capital of the Vietnam Vehicle Inspection Agency includes: State investment capital at the Vietnam Vehicle Inspection Agency and other sources of capital as prescribed by law.

Article 3. Preservation of Capital

Clause 1. The preservation of state capital at the Vietnam Vehicle Inspection Agency shall be carried out through the following measures:

Point a) Implementing the regulations on the management and use of capital, assets, profit distribution, and other financial management systems and accounting systems as prescribed by law.

Point b) Purchasing asset insurance as prescribed by law.

Point c) Promptly handling the value of lost assets, unrecoverable debts, and setting aside reserves for the following risks: - Reserve for reduction in inventory value; - Reserve for difficult-to-collect receivables; - Reserve for reduction in financial investment value; - Reserve for product warranty, goods, and construction works.

Point d) Other measures for preserving state capital and assets as prescribed by law.

Clause 2. The Vietnam Vehicle Inspection Agency has the responsibility to preserve and develop state investment capital at the Vietnam Vehicle Inspection Agency. Any changes in capital, the Vietnam Vehicle Inspection Agency must report to the Ministry of Transport for supervision and the Ministry of Finance for monitoring.

Clause 3. The Vietnam Vehicle Inspection Agency shall establish and issue internal regulations to manage and use various types of assets of the unit; The regulation must clearly define the cooperation of each management department within the agency, clearly specify the compensation responsibilities of each department and individual in cases of damage, loss, or causing asset losses and harm to the unit.

Article 4. Management of receivables and payables

1. Management of receivables.

a) Responsibilities of the Vietnam Vehicle Registration Agency:

- Establishing and promulgating the Regulation on management of debts of the Vietnam Vehicle Registration Agency in accordance with Clause 1, Article 4 of Decree No. 206/2013/ND-CP dated December 9, 2013 of the Government on management of debts of enterprises wholly owned by the State, clearly defining the responsibilities of collectives and individuals in monitoring and recovering receivables; reconciling, classifying debts, urging recovery, and proactively handling overdue debts in accordance with the Law on Management and Use of State Capital for Investment in Production and Business Operations at Enterprises and related amended, supplemented, or replaced documents;

- Maintaining ledgers to track debts by debtor category; regularly classifying debts (debts not yet due, debts due, debts overdue, difficult-to-collect debts, unrecoverable debts); urging debt recovery; periodically reconciling accounts receivable;

- Must detail tracking each type of foreign currency for receivables denominated in foreign currencies; at the end of the period, re-evaluating and processing exchange rate differences in accordance with regulations;

- Difficult-to-collect receivables are debts that have exceeded the payment deadline for more than six months (based on the original repayment term, excluding extended repayment periods), the Vietnam Vehicle Registration Agency has applied measures such as reconciliation, urging payment, but still cannot recover; or receivables not yet due but the debtor is an economic organization that has entered bankruptcy, is undergoing dissolution procedures, the debtor is missing, absconded, under investigation, detention, trial, or has died. The Vietnam Vehicle Registration Agency is responsible for setting up provisions for difficult-to-collect receivables according to current regulations of the Ministry of Finance;

- Unrecoverable receivables, the Vietnam Vehicle Registration Agency is responsible for compensating individuals and collectives related to the matter, the remaining amount is offset by the provision for difficult-to-collect receivables. If there is still a shortfall, it shall be recorded as operating expenses of the Vietnam Vehicle Registration Agency;

- After handling as above, the Vietnam Vehicle Registration Agency must provide detailed explanations of the value (in original currency and VND) of difficult-to-collect receivables processed within ten years from the date of processing, by debtor category, reasons for writing off accounting records of difficult-to-collect receivables, and recovery organizations. Recovered amounts shall be recorded as other income of the Vietnam Vehicle Registration Agency;

- The Director of the Vietnam Vehicle Registration Agency and the Directors of subordinate units are responsible for promptly handling difficult-to-collect receivables and uncollectible receivables. If they fail to handle uncollectible receivables in a timely manner as prescribed, based on the consequences of delayed handling affecting the financial situation and business results of the Vietnam Vehicle Registration Agency, the Ministry of Transport will decide on disciplinary actions in accordance with the law; if failure to handle in a timely manner leads to loss of owner's capital at the Vietnam Vehicle Registration Agency, the Director of the Vietnam Vehicle Registration Agency and the Directors of subordinate units shall bear responsibility before the Ministry of Transport and the law;

b) Rights of the Vietnam Vehicle Registration Agency:

- The Vietnam Vehicle Registration Agency has the right to sell overdue receivables, difficult-to-collect receivables, and uncollectible receivables to recover capital. Sales can only be made to economic organizations with functions to buy and sell debts, not directly to debtors. Sale prices of receivables are agreed upon by the parties and they are responsible for the decision to sell receivables. In cases where selling debts leads to losses, capital depletion, or inability to pay leading to financial imbalance, the Director of the Vietnam Vehicle Registration Agency and those directly responsible for the generation of difficult-to-collect receivables must compensate according to the law;

- Other rights of the Vietnam Vehicle Registration Agency include: the right to appeal and initiate litigation when receivables cannot be recovered, the right to delegate implementation in accordance with the law;

2. Management of Payables

a) Maintaining complete ledgers for all payables including interest payable;

b) Paying payables strictly according to the committed deadlines. Regularly reviewing, evaluating, and analyzing the ability to pay debts of the Vietnam Vehicle Registration Agency, identifying early difficulties in paying debts to take timely corrective measures to prevent the occurrence of overdue payables. Payables that do not need to be paid or have no payee shall be recorded as other income of the Vietnam Vehicle Registration Agency.

Article 5. Investment, construction, and procurement of fixed assets

Investment, construction, and procurement of fixed assets shall be carried out to meet service activities for vehicle inspection and registration in accordance with the provisions of Article 24 of the Law on Management and Use of State Capital for Production and Business at Enterprises. In this regard:

a) For investment and procurement of fixed assets implemented by the Vietnam Vehicle Inspection Agency, the investment and construction process must comply with the relevant laws on construction, bidding, and other related laws;

b) For investment and procurement of fixed assets from outside sources for use, the Vietnam Vehicle Inspection Agency must comply with the relevant laws on bidding and other related laws;

c) For investment, procurement, and use of transportation means (automobiles) serving the work of leadership positions and general work, the Vietnam Vehicle Inspection Agency must ensure compliance with current standards and quotas for procurement and use to ensure transparency, economy, and efficiency.

Article 6. Leasing of Assets for Operations

1. The Vietnam Vehicle Inspection Agency may lease assets (including financial leasing) to serve production and business operations in accordance with the needs of the unit and ensure effective business operations.

2. The leasing and use of leased assets must comply with the provisions of the Civil Code and other relevant laws.

Article 7. Management, Use, and Depreciation of Fixed Assets

1. The Vietnam Vehicle Inspection Agency shall manage and use fixed assets during business operations in accordance with the provisions of Article 25 of the Law on Management and Use of State Capital for Production and Business at Enterprises. In this regard:

a) The Vietnam Vehicle Inspection Agency is responsible for formulating, promulgating, and implementing regulations on the management and use of fixed assets of the Vietnam Vehicle Inspection Agency;

b) Depending on the management requirements for each type of fixed asset, the regulations on fixed asset management issued by the Vietnam Vehicle Inspection Agency must clearly define the coordination between departments and the responsibilities of each department and individual involved in monitoring and managing the use of assets of the Vietnam Vehicle Inspection Agency.

2. The Vietnam Vehicle Inspection Agency shall lease, pledge, or mortgage fixed assets (if any) in accordance with the provisions of Article 26 of Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on state capital investment in enterprises and management and use of capital and assets at enterprises, including:

a) The Director of the Vietnam Vehicle Inspection Agency decides on lease contracts for assets valued below 50% of the owner's equity recorded in the quarterly or annual financial report of the Vietnam Vehicle Inspection Agency at the time closest to the decision-making date for leasing the asset, but the remaining value of the leased asset must not exceed the project group B capital limit as stipulated by the Public Investment Law;

b) The authority to decide on using enterprise assets for collateral or pledge to borrow funds shall be carried out in accordance with the provisions of Article 23 of the Law on Management and Use of State Capital for Production and Business at Enterprises;

c) The use of assets for leasing, pledging, or mortgaging must comply with the provisions of the Civil Code and other relevant laws.

3. Depreciation of fixed assets: The Vietnam Vehicle Inspection Agency is allowed to accrue depreciation in accordance with the guidelines issued by the Ministry of Finance regarding the accrual of depreciation of fixed assets of enterprises.

Article 8. Liquidation and Sale of Fixed Assets

1. The Vietnam Vehicle Inspection Center has the right to proactively implement the sale and liquidation of fixed assets that are damaged, technologically obsolete, not needed for use, or unusable, in order to recover capital on the principle of transparency and preservation of capital according to current laws.

2. Authority to decide on the liquidation and sale of fixed assets.

a) For office premises, automobiles, and other assets directly serving the provision of public services by the Vietnam Vehicle Inspection Center (such as workshops, testing machines and equipment, inspection lines), when selling or liquidating these assets, approval in writing from the Ministry of Transport is required. The Ministry of Transport will consider delegating authority to the Vietnam Vehicle Inspection Center to independently liquidate certain assets in specific cases.

b) Except for the assets mentioned in Point a Clause 2 of this Article, the Director of the Vietnam Vehicle Inspection Center decides on the plans for liquidation and sale of fixed assets with remaining value less than 30% of the recorded owner's equity on the balance sheet in the quarterly or annual financial report of the Vietnam Vehicle Inspection Center at the time closest to the decision to liquidate or sell the asset but not exceeding the project group B level as stipulated by the Public Investment Law. For plans involving the liquidation and sale of fixed assets with a higher value than the delegated level, the Vietnam Vehicle Inspection Center must report to the Ministry of Transport for decision.

c) In cases where the plan for the sale of fixed assets of the Vietnam Vehicle Inspection Center does not have the ability to recover the full amount of invested capital, the Vietnam Vehicle Inspection Center must clearly explain the reasons for the inability to recover the capital before selling the fixed assets, to be reported to the Ministry of Transport for consideration and decision.

d) Specifically, in cases where newly invested or purchased fixed assets have been put into use within the first three years but have not achieved economic efficiency as approved by the competent authority, if the Vietnam Vehicle Inspection Center does not need to continue using them and the sale of such assets cannot recover the full investment leading to the inability to repay loans according to promissory notes or loan contracts, then the responsibility of those involved must be clarified and reported to the Ministry of Transport for handling according to the law.

3. Methods for Liquidation and Sale of Fixed Assets.

a) The Vietnam Vehicle Inspection Center shall carry out the sale of fixed assets through public auction via an organization with the function of auctioning assets or by organizing the auction itself in accordance with the procedures prescribed by the law on asset auctions. In cases where the remaining value recorded in the accounting books is under 100 million VND, the Director of the Vietnam Vehicle Inspection Center decides to choose between auction or negotiation sales, but not lower than market price. If there is no market transaction for the fixed asset, the Vietnam Vehicle Inspection Center may hire an organization with the function of valuation to determine the price as the basis for selling the asset through the above methods.

b) In cases where the transfer of fixed assets is linked to land, it must be carried out in accordance with the law on land.

4. Procedures for Liquidation and Sale of Fixed Assets.

a) The Director of the Vietnam Vehicle Inspection Center and the directors of subordinate units decide to establish a Liquidation and Sale Committee for fixed assets at the Vietnam Vehicle Inspection Center and its subordinate units. The committee consists of: Director/Manager, Chief Accountant, heads of relevant departments; representatives of the Trade Union Executive Board, and some experts knowledgeable about the technical characteristics of fixed assets (if necessary). The tasks of the Liquidation and Sale Committee include:

- Determining the technical condition and remaining value of the assets to be liquidated or sold;

- Identifying the causes and responsibilities of individuals and collectives related to the situation where newly invested fixed assets do not generate economic benefits and must be sold without the ability to recover the full investment, or fixed assets that have not yet been fully depreciated and are damaged beyond repair must be liquidated or sold, to report to the Ministry of Transport for handling according to regulations;

- Organizing the determination or hiring an organization with the function of valuation to determine the value that can be obtained from the liquidation or sale of assets;

- Organizing public auctions or hiring organizations with the function of auctioning various types of assets to be liquidated or sold in accordance with relevant laws;

- The Liquidation and Sale Committee terminates its activities after completing the liquidation and sale of fixed assets of the Vietnam Vehicle Inspection Center.

b) When the Vietnam Vehicle Inspection Center implements an investment construction project approved by the competent authority and needs to dismantle or cancel old fixed assets, the liquidation and accounting of old fixed assets when dismantling or canceling shall be carried out in accordance with the provisions of this Article regarding the liquidation of fixed assets.

Article 9. Inventory of Assets

1. The Vietnam Vehicle Registration Agency shall conduct asset inventory in accordance with Clause 2 of Article 40 of the Accounting Law 2015.

2. Handling the results of the inventory.

a) Handling the results of the inventory at the time of preparing the annual financial report:

- In cases where the inventory result shows a shortage of assets compared to the recorded assets in accounting books due to subjective reasons of related collectives or individuals, such collectives or individuals must compensate for the shortage. The Director of the Vietnam Vehicle Registration Agency decides on the compensation amount and bears responsibility for their decision. After compensating for the shortage with the collective or individual's compensation money and insurance proceeds, if there remains a shortage due to objective reasons, the remaining amount (if any) shall be reported to the Ministry of Transport for consideration and can only be included in the agency's operating costs upon approval by the Ministry of Transport;

- In cases where the inventory result shows an excess of assets compared to the recorded assets in accounting books, the Vietnam Vehicle Registration Agency must clearly identify the cause of the excess. For excess assets that do not need to be returned or whose owners cannot be identified, they may be included in other income of the Vietnam Vehicle Registration Agency; for excess assets with unclear causes, they should be included in other liabilities or payments; if the cause of the excess value has been determined and documented, it shall be accounted for according to the resolution on handling;

b) Handling the results of the inventory in accordance with the provisions of Clause 1 of this Article shall be carried out in accordance with the laws applicable to each specific inventory case:

- In the accounting period when the loss of assets has been determined to be compensated by organizations, individuals (including insurance organizations), the value of the lost assets, after being compensated by individuals, collectives, and insurance organizations, if still insufficient, the shortfall shall be included in production and business expenses of the period;

- In the accounting period when the loss of assets has not yet been determined to be compensated by organizations, individuals, the entire value of the lost assets shall be reflected in the production and business expenses of the period in which the asset loss occurred. When receiving compensation from organizations, individuals, it will be included in other income of the unit;

- In special cases caused by natural disasters or force majeure resulting in serious damage that the Vietnam Vehicle Registration Agency cannot overcome, the Director of the Vietnam Vehicle Registration Agency shall develop a loss handling plan to report to the Ministry of Transport for consideration and handling within their authority;

- The Vietnam Vehicle Registration Agency is responsible for promptly handling asset losses; if asset losses are not handled, the Director of the Vietnam Vehicle Registration Agency will bear responsibility before the Ministry of Transport as if the financial situation of the Vietnam Vehicle Registration Agency was not honestly reported;

Article 10. Revaluation of Assets

1. The Vietnam Vehicle Registration Agency shall carry out revaluation of assets in accordance with the decision of the competent state agency.

2. The revaluation of assets must comply with the relevant regulations of the State. Any increases or decreases in value due to revaluation of assets shall be handled according to the current regulations of the State for each specific case.

II. INCOME, EXPENSES AND OPERATING RESULTS

Article 11. Revenue and Other Income

The Director of the Vietnam Vehicle Inspection Agency shall be responsible under the law for organizing strict management to ensure the accuracy, honesty, and legality of all revenue and other income of the Vietnam Vehicle Inspection Agency.

All revenue and other income arising from service activities related to vehicle inspection and other services of the Vietnam Vehicle Inspection Agency must have complete documentation and records in accordance with the provisions of the law and must be fully reflected in the accounting books of the Vietnam Vehicle Inspection Agency according to the current enterprise accounting regulations.

Revenue and other income related to vehicle inspection services and other services of the Vietnam Vehicle Inspection Agency shall be determined in Vietnamese Dong; in cases where income is received in foreign currency, it must be converted into Vietnamese Dong according to the current legal provisions.

1. Revenue of the Vietnam Vehicle Inspection Agency includes revenue from service provision activities and financial activity revenue, including:

a) Revenue from service provision activities is the total amount of money generated during the period from providing services by the Vietnam Vehicle Inspection Agency, including:

- Vehicle inspection activity revenue is all income from quality, technical safety, labor safety, and environmental protection inspections of transportation equipment and devices; marine exploration, exploitation, and transportation equipment and devices; and other equipment and devices within the jurisdiction of the Vietnam Vehicle Inspection Agency;

- Other revenue related to vehicle inspection activities such as training of inspectors, issuance of standardized stamps and registers for inspection units throughout the industry; fees collected for road usage that are retained according to legal provisions;

- Revenue from other service activities outside of vehicle inspection duties, including acting as an insurance agent for motor vehicles, consulting, scientific and technical services related to the technical safety of transportation equipment and devices, and other revenues as prescribed.

b) Financial activity revenue includes interest from bank deposits, exchange rate gains generated during the period, and revaluation gains on monetary items denominated in foreign currencies at the end of the period, and other financial activity revenues as prescribed by the enterprise accounting regulations.

2. Other income includes revenues from the liquidation and sale of fixed assets, compensation insurance payments, customer penalties for breach of contract, and other receivables that cannot be recovered, which are recorded as other income according to the enterprise accounting regulations.

Article 12. Expenses

The Director of the Vietnam Vehicle Inspection Agency shall be responsible under the law for organizing strict management to ensure the accuracy, honesty, and legality of all expenses. Expenses of the Vietnam Vehicle Inspection Agency include costs incurred during the fiscal year related to its activities, including service provision activity costs, financial activity costs, and other costs.

All expenses arising from service activities related to vehicle inspection and other services of the Vietnam Vehicle Inspection Agency must have complete documentation and records in accordance with the provisions of the law and must be fully reflected in the accounting books of the Vietnam Vehicle Inspection Agency according to the current enterprise accounting regulations.

Expenses related to vehicle inspection services and other services of the Vietnam Vehicle Inspection Agency shall be determined in Vietnamese Dong; in cases where expenses are incurred in foreign currency, they must be converted into Vietnamese Dong according to the current legal provisions.

The Vietnam Vehicle Inspection Agency must accurately calculate and cover all expenses of vehicle inspection services and other services through its own revenues and bear full responsibility for the results of its business operations.

1. Vehicle inspection activity expenses include:

- Raw material, fuel, semi-finished product, and external service purchase costs (based on actual consumption and original cost), tool and equipment depreciation costs, repair costs for fixed assets, and pre-funded major repair costs for fixed assets;

- Fixed asset depreciation costs calculated in accordance with Article 7 of this Circular;

- Wages, salaries, and wage-like costs payable to civil servants, employees, and workers according to prescribed regulations;

- Social insurance contributions, trade union fees, health insurance, and unemployment insurance for workers that the Vietnam Vehicle Inspection Agency is required to pay according to legal provisions;

- Transaction, brokerage, hospitality, marketing, advertising, conference costs; resource taxes, land taxes, business license fees, land rental fees; severance pay for laid-off workers; training costs to improve managerial skills and worker expertise; medical work costs as prescribed; innovation awards, productivity improvement awards, material conservation awards, and cost-saving awards; female worker costs; environmental protection costs; meal costs for workers; Party and mass organization work costs at the Vietnam Vehicle Inspection Agency (costs outside the budget of the Party and mass organizations funded from designated sources); and other monetary costs implemented according to the Law on Corporate Income Tax;

- Actual value of lost assets and unrecoverable receivables as stipulated by law;

- Value of inventory write-down reserves and bad debt reserves established according to legal provisions, pre-funded warranty costs, and other reserves prescribed by law for businesses operating in special sectors.

2. Expenses of other activities related to vehicle inspection include:

- Instructor rental costs as prescribed and costs related to training organization work, editing, royalties, printing costs for standardized forms, stamps, and registers issued to inspection units according to regulations;

- Costs related to collecting inspection certification fees and road usage fees.

3. Expenses for service activities outside of vehicle inspection duties include:

- Payment for overtime wages for individuals directly involved in service activities (if any);

- Expenses for raw materials, supplies, office supplies, tools, and equipment;

- Depreciation expenses on fixed assets as prescribed; - Travel expenses according to regulations;

- Rental expenses for fixed assets (if any);

- Other expenses allocated to service activities outside the public interest inspection tasks, including rent for premises, working locations, electricity, water, telephone, fax, internet, books, magazines, and public services.

- Other monetary expenses as prescribed by law.

4. Financial activity expenses, including interest payment expenses, foreign exchange loss arising during the period, and revaluation foreign currency monetary items at the end of the period, discounting expenses, and other financial expenses as prescribed.

5. Other expenses, including expenses for selling and liquidating fixed assets (including the remaining value of fixed assets when sold or liquidated), shortages of fixed assets after inventory (the remaining value of fixed assets missing after inventory must be included in the losses of the Vietnam Motor Vehicle Inspection Center); expenses for recovering written-off debts; expenses for fines due to breach of contracts; other expenses as prescribed by law.

6. The following expenses shall not be included in production and business costs if they are covered by other sources or are unrelated to production and business activities:

a) Expenses for purchasing, constructing, and installing tangible and intangible fixed assets;

b) Interest expenses on borrowed funds included in investment and construction costs;

c) Other expenses unrelated to the activities of the Vietnam Motor Vehicle Inspection Center; expenses without valid supporting documents;

d) Penalties for violations of laws not attributed to the Vietnam Motor Vehicle Inspection Center but caused by individuals.

Article 13. Expense Management

The Vietnam Motor Vehicle Inspection Center must strictly manage all expenses to reduce costs and increase profits through the following management measures:

1. Establishing, issuing, and implementing appropriate economic and technical norms consistent with the economic and technical characteristics, organizational management model, and level of equipment of the Vietnam Motor Vehicle Inspection Center. These norms must be disseminated to those who will implement them, publicly announced to all staff members of the Vietnam Motor Vehicle Inspection Center for implementation and supervision.

In cases where it is impossible to meet these norms, leading to increased costs, the reasons and responsibilities must be clearly analyzed and handled according to the provisions of the law. If the cause is subjective, compensation for damages must be made according to the law.

2. Regularly organizing cost analysis to identify weak and poor management links, factors increasing costs, and timely solutions to address them.

3. In cases where the volume of work increases, leading to costs exceeding the assigned financial plan by more than 15%, the Vietnam Motor Vehicle Inspection Center must report to the Ministry of Transport for review and adjustment of the budget plan.

Article 14. Realized Profit

1. The realized profit of the Vietnam Motor Vehicle Inspection Center in a year is the difference between total revenue and other income realized in the year as stipulated in Article 11 of this Circular and total expenses incurred in the year as stipulated in Article 12 of this Circular.

2. The determination of revenue, expenses, taxable income, and corporate income tax shall be carried out in accordance with the provisions of the Law on Corporate Income Tax and current guiding legal documents.

III. DISTRIBUTION OF PROFITS

Article 15. Profit Distribution

The profit of the Vietnam Vehicle Inspection Agency, after covering previous year losses according to the Law on Corporate Income Tax, setting aside funds for scientific and technological development as prescribed by law, paying corporate income tax, and deducting other expenses, the remaining profit shall be distributed in the following order:

1. Covering losses from previous years that have exceeded the period allowed for deduction from pre-tax profits as stipulated.

2. The remaining profit after deducting the items specified in Clause 1 of this Article shall be distributed as follows:

a) Up to 30% shall be allocated to the Development Investment Fund; however, if the balance of the Development Investment Fund equals the total capital investment of the owner (Account Code 411) and basic construction fund (Account Code 422) as shown in the most recent financial report, further allocations shall not be made.

b) Establish two reward and welfare funds based on criteria evaluating the unit's performance for the year, specifically as follows:

- Allocate up to three months' salary to the reward and welfare funds when the following conditions are met:

+ Revenue from inspection activities and other income are equal to or higher than the plan assigned by the Ministry of Transport; among which, revenue from inspection activities meet the assigned plan completion rate;

+ Post-tax profit margin on equity is equal to or higher than the assigned plan;

+ There is no overdue debt and the ability to pay maturing debts exceeds 1;

+ There is no conclusion from competent authorities regarding violations of mechanisms and policies in the areas mentioned in Clause 4, Article 12 of Circular 200/2015/TT-BTC dated December 15, 2015 of the Ministry of Finance and subsequent amendments, supplements, replacements, or reminders about the implementation of mechanisms and policies under the law without reaching the level of administrative penalties;

+ Complete or exceed the plan for production volume with product or service quality meeting the prescribed standards.

- Allocate up to one and a half months' salary to the reward and welfare funds when the following conditions are met:

+ Inspection activity revenue is lower but at least 90% of the assigned plan by the Ministry of Transport;

+ Post-tax profit margin on equity is lower but at least 90% of the assigned plan;

+ There is no overdue debt and the ability to pay maturing debts ranges from 0.5 to 1;

+ The Ministry of Transport/Ministry of Finance has reminded once in writing about submitting financial reports and other reports not in accordance with regulations or deadlines. Or been penalized administratively by warning or fines (each fine amounting to less than VND 10,000,000) arising during the fiscal year;

+ Achieve at least 90% of the plan for production volume with product or service quality meeting the prescribed standards.

- Allocate up to one month's salary to the reward and welfare funds based on specific criteria:

+ Total revenue achieved is below 90% of the assigned plan;

+ Post-tax profit margin on equity is below 90% of the assigned plan; + There is overdue debt or the ability to pay maturing debts is less than 0.5;

+ Failure to submit financial reports and other reports as required or submitting them not in accordance with regulations or deadlines, resulting in written reminders from the Ministry of Transport/Ministry of Finance twice or more;

+ Been penalized administratively by means other than warnings or fined (each fine amounting to VND 10,000,000 or more) during the fiscal year;

+ The leadership of the Vietnam Vehicle Inspection Agency engages in illegal acts during the execution of their duties to the extent of being criminally prosecuted;

+ Achieve less than 90% of the plan for production volume or product or service quality does not meet the prescribed standards.

c) In cases where the realized profit is insufficient to allocate to the reward and welfare funds as stipulated in Clause 2 of this Article, the allocation to the Development Investment Fund may be reduced to supplement the reward and welfare funds, but the reduction shall not exceed the amount allocated to the Development Investment Fund in the fiscal year.

d) The remaining profit after establishing the funds as specified in Sub-clause a and b of Clause 2 of this Article shall be remitted to the State Budget.

Article 16. Management and Use of Funds

1. The use of funds of the Vietnam Vehicle Inspection Agency must be in accordance with their intended purposes and designated recipients.

a) The Vietnam Vehicle Inspection Agency shall establish and promulgate regulations on the management and use of funds in accordance with the provisions of the law to be implemented within the agency; such regulations must ensure democracy, transparency, and involve the participation of the Vietnam Vehicle Inspection Agency Trade Union Committee before being publicly disclosed within the agency.

b) Within each fiscal year, the Vietnam Vehicle Inspection Agency shall proactively set aside funds based on the results of its production and business operations that have generated profits and have been subject to corporate income tax as stipulated, to provide funding for the use of funds according to the specified purposes.

2. Science and Technology Development Fund: The establishment, management, and settlement of fund usage must comply with current state regulations.

3. Investment and Development Fund shall be used to implement investment projects aimed at enhancing the capacity of inspection activities and supplementing capital for inspection activities.

4. Reward Fund shall be used for:

a) Year-end or regular bonuses based on the labor productivity and work achievements of each staff member of the Vietnam Vehicle Inspection Agency;

b) Special bonuses for individuals or groups within the unit;

c) Bonuses for individuals and units outside the Vietnam Vehicle Inspection Agency who have made significant contributions to the unit's business operations and management tasks; the bonus levels under Points a, b, and c of this Clause shall be decided by the Director of the Vietnam Vehicle Inspection Agency, with Point a requiring prior approval from the unit's trade union.

5. Welfare Fund shall be used for:

a) Investing in the construction or repair of welfare facilities of the Vietnam Vehicle Inspection Agency;

b) Expenditure on welfare activities for the collective workforce of the Vietnam Vehicle Inspection Agency;

c) Contributing part of the capital to invest in common welfare facilities within the industry or with other units according to contracts;

d) Using part of the welfare fund to provide emergency assistance to employees, including those retiring, losing their health, facing difficult circumstances without support, or engaged in charitable social work;

đ) The level of expenditure on the fund shall be decided by the Director of the Vietnam Vehicle Inspection Agency and recorded in the regulations on the management and use of funds of the Vietnam Vehicle Inspection Agency.

IV. FINANCIAL PLANNING, ACCOUNTING REGIMES,
STATISTICS AND AUDIT

Article 17. Financial Planning, Accounting Regime, Financial Reports, Statistics, and Other Reports.

1. Financial Planning

a) Based on the implementation of the financial plan in the current year and the deployment plan for the next year, the Vietnam Vehicle Inspection Agency is responsible for developing a financial plan for the next year that aligns with the actual situation of the unit and submitting it to the Ministry of Transport and the Ministry of Finance before November 15th each year (the format of the Financial Plan Report of the Vietnam Vehicle Inspection Agency is attached as Appendix 01 of this Circular).

b) The Ministry of Transport shall take the lead in reviewing and approving the financial plan of the Vietnam Vehicle Inspection Agency, with the Ministry of Finance participating. After obtaining the opinion of the Ministry of Finance, the Ministry of Transport will allocate the financial plan to the Vietnam Vehicle Inspection Agency according to Appendix 02 of this Circular. The financial plan will also be sent to the Ministry of Finance for consolidation.

c) The report formats of the Vietnam Vehicle Inspection Agency shall be established according to the appendices of this Circular.

2. Accounting System, Statistics, and Audit

a. The Vietnam Vehicle Inspection Agency, as an independent accounting entity, shall apply the accounting system of enterprises, accounting standards, and other current legal documents on accounting; it shall also be responsible for centralized financial management of all sources of capital and funds at the agency headquarters. Subordinate units of the Vietnam Vehicle Inspection Agency are dependent accounting entities.

b. At the end of each quarter and year, the Vietnam Vehicle Inspection Agency shall prepare, present, and submit financial reports and statistical reports to relevant government agencies and make them public in accordance with current laws. The Director of the Vietnam Vehicle Inspection Agency shall be responsible for the accuracy and truthfulness of the financial and statistical reports and the public disclosure of financial information. The annual financial report of the Vietnam Vehicle Inspection Agency must be audited by an independent auditing organization legally operating in Vietnam before submission to government agencies and public disclosure.

3. The Vietnam Vehicle Inspection Agency shall be responsible for preparing and submitting the following reports:

a) Regular reports, including:

- Quarterly and annual financial reports (as stipulated in Circular No. 200/2014/TT-BTC dated December 22, 2014, issued by the Minister of Finance and subsequent amendments or replacements) and reports on the fulfillment of budget obligations according to Appendix 03 of this Circular;

- Reports on the implementation of the financial plan according to Appendix 04 of this Circular;

- Public financial status reports as prescribed by the Ministry of Finance;

- Reports on profit distribution according to Appendix 05 of this Circular;

- Settlement reports on salaries according to Appendix 06 of this Circular;

b) Ad hoc reports:

In addition to the reports mentioned in Point a of Clause 3 of this Article, the Vietnam Vehicle Inspection Agency shall prepare and submit ad hoc reports when requested by the Ministry of Transport and relevant government management agencies; if the Vietnam Vehicle Inspection Agency has domestic or foreign loans guaranteed by the Government, it shall prepare and submit reports in accordance with current legal regulations on the management of guaranteed loans.

c) Deadline and recipient for reports:

For the reports mentioned in Point a of Clause 3 of this Article, the Vietnam Vehicle Inspection Agency shall send them to the Ministry of Transport, the Ministry of Finance, and the Hanoi Tax Department.

The time limit for submitting the above reports is once a year at the same time as the settlement report as prescribed. The quarterly report submission period follows the current regulations.

4. The Vietnam Vehicle Inspection Agency shall organize the implementation of accounting and statistical work in accordance with the law.

5. The Vietnam Vehicle Inspection Agency shall be subject to audit, inspection, and supervision by authorized agencies regarding the financial work of the unit in accordance with the law.

Article 18. Accounting inspection, examination, and verification of Financial Reports

1. Monthly, quarterly, and annually, the Vietnam Vehicle Registration Agency and its subordinate units shall be responsible for self-inspection of accounting and financial reports.

2. The Vietnam Vehicle Registration Agency shall be responsible for organizing the examination of annual financial reports of its subordinate units (excluding the Agency's Office) and shall bear responsibility for the results of such examinations. Based on the Inspection Report of the annual financial report at subordinate units and after receiving the Notification of verification of financial reports from the Ministry of Transport, the Vietnam Vehicle Registration Agency shall be responsible for notifying the approval of the annual settlement to its subordinate units.

3. The Ministry of Transport shall lead the examination of the annual financial report of the Agency's Office and verify the annual financial report of the entire Vietnam Vehicle Registration Agency. After obtaining the verification results, it shall send them to the Ministry of Finance for consolidation and evaluation of the business operations of the Vietnam Vehicle Registration Agency according to regulations.

4. Content of financial report examination and verification

a) Content of annual financial report examination:

- Examination content includes: Management and use of capital and assets (increase or decrease in fixed assets, sources of equity capital and other fund sources); production and business operation results (revenue, expenses, profit); relationship with the state budget;

 - The examination will be based on the documents and materials provided by the unit including: Financial reports, Audit reports on Financial reports (if any), original documents and vouchers related to financial revenue and expenditure activities at the unit, other vouchers related to accounting entries and other schedules and reports related to the figures in the Financial report;

- Review and examine the implementation of recommendations by authorized state agencies through audit, inspection, and financial report verification work (if any).

b) Content of annual financial report verification of the Vietnam Vehicle Registration Agency:

- Verification content includes: Management and use of capital and assets (increase or decrease in fixed assets, sources of equity capital and other fund sources); production and business operation results (revenue, expenses, profit); relationship with the state budget and profit distribution according to the law;

- Review, inspect, and evaluate the implementation of recommendations by authorized state agencies through audit, inspection, and financial report verification work (if any);

- Verification is carried out based on the Inspection Report of financial reports of subordinate units and the Agency's Office; review, reconcile, and consolidate data in the Inspection Reports of financial reports of subordinate units and the Agency's Office with the consolidated figures in the annual Financial Report of the Vietnam Vehicle Registration Agency. Upon completion of the annual financial report verification, the Ministry of Transport shall lead the preparation of the Verification Report to serve as the basis for the Ministry of Transport to notify the verification of the annual financial report of the Vietnam Vehicle Registration Agency.

5. In addition, depending on the nature of work each year, the Ministry of Transport shall lead the conduct of specialized inspections of the Vietnam Vehicle Registration Agency: Inspect procurement and investment in assets, basic construction investment, and other inspection contents (if any). These inspection rounds will be conducted according to the Decision of the competent authority and ensure that they do not overlap with inspection rounds of other functional agencies such as: State Audit, Government Inspectorate, Ministry of Finance Inspectorate.

6. When conducting annual financial report inspections, the Ministry of Transport has the right to request the Vietnam Vehicle Registration Agency:

a) To explain or provide necessary information and data for the inspection;

b) To adjust settlement figures if there are errors and to revise the settlement report according to the inspection results;

c) To require subordinate units to recover and remit to the state budget any unauthorized expenditures and other amounts due according to regulations.

Article 19. Public Financial Reports

Based on the annual Financial Report that has been approved by the competent authority, the Vietnam Vehicle Inspection Agency and its subordinate units shall publicly announce before the meeting of workers and staff members of the unit.

Chapter III
IMPLEMENTATION

Article 20. Implementation

This Circular takes effect from July 6, 2018, and replaces Circular Joint No. 55/2014/TTLT-BTC-BGTVT dated April 25, 2014, issued by the Ministry of Finance and the Ministry of Transport guiding the financial management mechanism for the Vietnam Vehicle Inspection Agency. During the implementation process, if there are difficulties or obstacles, the Vietnam Vehicle Inspection Agency is requested to promptly report to the Ministry of Finance for guidance.

During the implementation process, if there are difficulties or obstacles, the Vietnam Vehicle Inspection Agency is requested to promptly report to the Ministry of Finance for guidance./.