Decree No. 53/2006/NĐ-CP on policies to encourage the development of non-state service providers

DECREE

On policies to encourage the development of non-state service providers

non-state service

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to Resolution No. 05/2005/NQ-CP dated April 18, 2005 of the Government on accelerating socialization in education, healthcare, culture, and sports activities;

At the request of the Minister of Finance.

DECREE

PART I
GENERAL PROVISIONS

1. This Decree adjusts the pension levels, social insurance benefits, and monthly allowances for individuals receiving pensions, social insurance benefits, and monthly allowances prior to July 1, 2023, including:

Article 1. This Decree applies to non-state entities operating in the following fields: education and training; healthcare; culture; sports; science and technology; environment; society; population, family, and child protection and care.

Clause 2. Organizations and individuals establishing enterprises in the fields mentioned in Clause 1 of this Article under the Law on Enterprises shall not fall within the scope of regulation of this Decree.

Article 2. Non-state entities

Clause 1. Non-state entities are entities established by social organizations, social-professional organizations, economic organizations, individuals, groups of individuals, or community residents, investing in physical facilities, self-financing operational costs from non-governmental funds, and operating in accordance with the law.

Clause 2. Non-state entities are established according to national planning and plans to develop educational and training, healthcare, cultural, sports, scientific and technological, environmental, societal, population, family, and child protection and care services.

Clause 3. Non-state entities established in accordance with the law have legal personality, independent accounting, seals, and separate accounts. Alongside consolidating state-owned entities, the State encourages the development of non-state entities and creates conditions for organizations and individuals to invest capital and mobilize resources from the people and all types of economic organizations to establish, build, and develop non-state entities in line with the State's development orientation.

Article 3. Principles of Operation

Clause 1. The State and society attach importance to and treat products and services provided by non-state entities equally with those provided by state-owned entities.

Clause 2. The State applies preferential corporate income tax rates for non-state entities to encourage investment in enhancing physical facilities and improving service quality.

Clause 3. The State implements support policies for social welfare beneficiaries when they utilize services provided by non-state entities; the methods of support are decided by the Prime Minister.

Clause 4. Non-state entities are eligible to participate in public services funded or commissioned by the State; they may also bid for contracts and projects using domestic and foreign funds in accordance with their functions and tasks as prescribed by law.

Non-state healthcare entities meeting the examination and treatment conditions stipulated by the competent state management agency on healthcare are permitted to provide examination and treatment services to individuals holding health insurance cards who choose their own healthcare providers.

Clause 5. Non-state entities may engage in joint ventures and collaborations with domestic and international organizations in accordance with their functions and tasks to mobilize capital, human resources, and technology, thereby enhancing service quality.

Assets donated, gifted, or granted without repayment during the operation of non-state entities shall not be distributed to individuals but shall be used collectively for the benefit of the entity and the community.

Chapter II
POLICIES TO ENCOURAGE THE DEVELOPMENT OF NON-STATE ENTITIES
STATE

Article 4. Leasing and Construction of Physical Facilities

1. Provincial People's Committees and Municipal People's Committees under the Central Government shall utilize existing housing and infrastructure funds, or construct houses and infrastructure to lease long-term at preferential rates to non-state entities. The maximum preferential rate does not include land rental fees, compensation for land clearance, and interest on construction loans.

2. Provincial People's Committees and Municipal People's Committees under the Central Government shall create favorable conditions for non-state entities to invest in constructing schools, hospitals, social welfare facilities, child protection centers, research and development technology centers, amusement areas, sports zones, museums, libraries, cultural houses, theaters, cinemas, etc., according to approved planning.

Article 5. Allocation and Leasing of Land

1. Non-state entities shall be allocated or leased land by the State to build facilities operating in fields specified in Clause 1, Article 1 of this Decree in the following forms:

a) Allocation of land without payment of land use fee;

b) Allocation of land with exemption from payment of land use fee;

c) Leasing of land with exemption from land rental fee.

2. Non-state entities using land legally shall be issued certificates of land use rights, and their lawful land use rights, ownership of buildings, and assets shall be protected by the State according to the law. Procedures and formalities for land allocation, leasing, and issuance of certificates of land use rights shall be carried out in accordance with current laws on land.

3. Provincial People's Committees and Municipal People's Committees under the Central Government shall adjust local land use plans, prioritizing land funds for non-state entities operating in education-training, healthcare, culture, physical education and sports, science and technology, environment, society, population, family, and child protection fields.

4. Non-state entities must use land for its intended purpose, in accordance with planning, and comply with all relevant laws on land. Upon expiration of the land allocation or lease period, if the entity no longer requires continued use, has been dissolved, relocated, or misused the land without effectiveness, the State will reclaim the land and provide compensation and support according to current laws.

5. Non-state entities receiving land allocation and exemption from land use fee, or land leasing and exemption from land rental fee shall not include the value of the land being used in their asset valuation and shall not use land as collateral for borrowing.

6. For land legally transferred from organizations or individuals, non-state entities may include the value of the land use right in their asset valuation.

Article 6. Handling of Assets When Changing Business Forms

1. For land: state-owned and public-private partnership entities decided by competent authorities to convert to non-state entities or enterprises shall continue to be allocated land by the State for operation. For unused land or land used improperly, the entity must return it to the State.

2. For assets on land: the portion of state-invested assets shall be inventoried and revalued according to regulations and then leased or given priority for purchase by non-state entities.

Authorities deciding to convert state-owned and public-private partnership entities into non-state entities have the authority to decide on selling and leasing state-owned assets to non-state entities according to current property management regulations.

For entities established by the Prime Minister's decision and now converting to non-state entities or enterprises, the transfer of state assets shall be decided by the Minister of Finance.

3. In cases where public-private partnership units within state-owned entities are decided by competent authorities to revert to state-owned entities, they must conduct an inventory and valuation of assets according to regulations for tracking and managing according to current asset management systems.

Assets formed from funds raised outside the state budget for purchasing and construction during the operation of public-private partnership units shall be handled as follows:

a) If the investor wishes to reclaim the asset, the asset will be returned to the investor;

b) If the state-owned entity accepting the asset needs to use it and agrees to accept it, the valuation committee will determine the price as the basis for settlement with the investor;

c) If the state-owned entity does not need to use the asset and the investor does not want to reclaim it, the asset will be sold off to repay the investor.

4. In cases where private non-profit entities convert to private (private sector) entities, where accumulated assets from the operations of private non-profit entities belong to collective ownership, these assets shall be identified and transferred to private entities for management and use according to the principle of preservation and development, and shall not be divided among individuals and shall be protected by the State according to the law.

Article 7. Stamp duty, value-added tax, export tax, import tax

1. Non-state institutions are exempt from stamp duty when registering land use rights and property ownership.

2. Non-state institutions are entitled to preferential treatment regarding value-added tax, export tax, and import tax in accordance with the provisions of the Value-Added Tax Law, Export and Import Tax Law, and current regulations.

Article 8. Corporate income tax application

1. Principles for applying corporate income tax preferences:

High-level corporate income tax preferences are granted to non-state institutions to encourage them to reinvest surplus revenues (profits earned during operations) into enhancing physical facilities or supporting service beneficiaries.

2. Regarding tax rates:

a) Non-state institutions operating in education, healthcare, culture, sports, science and technology, environment, social welfare, population, family, and child protection fields, such as teaching, vocational training, preventive healthcare, medical examination and treatment, rehabilitation, and family planning services; performing ethnic music, dance, art, film screenings; collecting, preserving, developing, and disseminating ethnic culture; exhibitions and sports activities, research and development, environmental sanitation; elderly care, childcare, disabled care; drug rehabilitation, shall enjoy a corporate income tax rate of 10% throughout their operational period.

b) Non-state institutions engaged in other activities shall fulfill their tax obligations according to the law.

3. Regarding exemption and reduction of corporate income tax:

The exemption and reduction of corporate income tax for non-state institutions shall be carried out in accordance with the Corporate Income Tax Law. The procedures, formalities, and methods for determining the amount of tax to be exempted or reduced shall comply with current tax laws.

Article 9. Capital Mobilization for Investment

1. Non-state institutions investing in projects within the education and healthcare sectors are eligible for various forms of preferential investment credit development provided by the State under the law.

2. Non-state institutions are permitted to raise capital through share contributions, employee contributions within the unit, and other lawful sources via cooperation and collaboration with enterprises, economic organizations, financial institutions, and individuals both domestically and internationally to construct physical facilities.

3. Provincial People's Committees and municipal people's committees directly under the central government may consider and decide on providing partial or full interest subsidies for non-state institutions implementing investments in projects in the fields mentioned in Article 1 of this Decree based on the local budget capacity.

Article 10. Social Insurance, Health Insurance

Employees of non-state institutions shall implement social insurance and health insurance systems in accordance with the current regulations of the State.

Article 11. Staff Training

1. Non-state institutions shall have plans and actively implement various training formats to enhance the skills of employees, ensuring compliance with industry and profession requirements as stipulated by the law.

2. Local People's Committees at all levels may consider providing training funding support for staff in non-state institutions when necessary, based on the local budget capacity.

Article 12. Awards

1. Collective bodies and workers in non-state-owned establishments with outstanding achievements shall be awarded by the State in accordance with the regulations of the Government.

2. Within their scope of management, Ministries, sectors, and localities shall guide the procedures and formalities for reviewing and awarding commendations to collective bodies and workers at non-state-owned establishments.

Chapter III
SOURCES OF REVENUE AND DISTRIBUTION OF FINANCIAL RESULTS

Article 13. Sources of revenue for non-state-owned establishments

1. Fees and charges according to the provisions of the State.

For fees and charges where the State does not specify the collection rate, non-state-owned establishments may decide on their own.

2. Revenue from other goods and services activities.

3. Profits distributed from joint ventures and cooperative activities; profits from bank deposits and bonds.

4. Budget funds provided by the state budget (if any) include:

a) Funds for implementing tasks ordered by the State;

b) Funds supporting the implementation of scientific and technological research projects;

c) Funds for implementing national target programs;

d) Funds for training and upgrading workers;

đ) Other grants and interest subsidies;

e) Other funds.

5. Other sources: aid, grants, gifts, and donations.

Article 14. Distribution of financial results of non-state-owned establishments

1. Based on annual financial results, the income of non-state-owned establishments, after covering all expenses, repaying loans, and paying taxes to the state budget as prescribed by law, shall be allocated to establish various funds and distribute profits to capital contributors.

2. The establishment of funds, the level of income paid to workers, and profit distribution to capital contributors shall be decided by the Board of Directors (or School Council) or the Head (for establishments without a Board of Directors) in accordance with the establishment's operational charter.

Article 15. Responsibilities of non-state-owned establishments

1. Non-state-owned establishments must register with tax authorities when operating to serve as the basis for determining tax benefits.

2. Non-state-owned establishments must comply with the operational charter, ensuring professional, vocational, human resource, and physical infrastructure conditions as stipulated by law to provide society with products and services meeting content and quality standards.

3. Non-state-owned establishments have the responsibility to publicly disclose their operations and finances in accordance with the law, and to disclose the level of support and the amount of state budget support (if any).

Regularly report the operation and financial status of the establishment to the sectoral management agency, the financial agency, and the tax authority at the same level as prescribed by law.

4. Non-state-owned establishments have the responsibility to fulfill inspection and audit requirements of the financial agency and other competent state agencies. Provide complete and timely relevant documents related to the inspection and audit content and bear responsibility for the accuracy and truthfulness of the information and documents provided.

5. Non-state-owned establishments have the responsibility to organize accounting, statistics, and auditing work in accordance with the law.

Chapter IV
STATE MANAGEMENT OF NON-STATE-OWNED ESTABLISHMENTS

Article 16. State Management of Non-State-Owned Establishments

1. Ministries and local People's Committees at all levels shall implement state management over non-state-owned establishments within their respective scope, functions, tasks, and delegated authority; specifically, they must focus on:

a) Formulating socialization orientations for each field as a basis for implementation by various levels, sectors, and investors;

b) Issuing policies and systems to encourage socialization that are appropriate to different forms of operation, meet the development requirements of each field during specific periods and regions;

c) Uniformly managing content, programs, quantity, and quality service requirements in each field as a basis for organizing implementation and monitoring by various levels, sectors, and society;

d) Issuing and revoking licenses for non-state-owned establishments according to regulations;

đ) Managing and creating conditions for international cooperation for non-state-owned establishments under their jurisdiction;

e) Inspecting and supervising compliance with state regulations by non-state-owned establishments; handling violations according to the law.

2. Ministers of the Ministries of Education and Training, Labor, Invalids and Social Affairs, Health, Culture, Sports and Tourism, Science and Technology, Natural Resources and Environment, Home Affairs, the Committee for Physical Culture and Sports, the Committee for Population, Family and Children shall, within their respective functions and authorities, coordinate with the Ministry of Finance and relevant ministries and sectors to issue or submit to competent authorities for decision:

a) Regulations on establishment and operation conditions for non-state-owned establishments. Issuing standards for labor practices and material facilities for non-state-owned establishments;

b) Conditions, procedures, and lists of public establishments transitioning to non-state-owned status or operating as enterprises;

c) Determining transition timelines and procedures for semi-public establishments to become non-state-owned or operate as enterprises.

3. Chairpersons of provincial People's Committees directly under the central government shall base on the specific situation of each locality to formulate additional preferential policies and systems to encourage, promote, and expand socialization forms in their areas.

4. Relevant ministries, sectors, and provincial People's Committees directly under the central government shall develop programs and measures to strictly manage the activities of non-state-owned establishments, ensuring compliance with the purpose, content of operations, and service quality as stipulated by each specialized sector.

5. Annually, ministries, sectors, and provincial People's Committees directly under the central government shall evaluate the implementation of socialization within their management scope, report to the Ministry of Finance, relevant ministries, and related agencies for consolidation and reporting to the Government.

Article 17. Authority to Approve Establishment, Change from Public to Non-Public Status, and Suspension or Dissolution of Activities

1. The authority deciding on the establishment of public and semi-public establishments has the right to decide on changing the operational form from public or semi-public to non-public, or converting public establishments to operate as enterprises.

2. Authority to approve the establishment of new non-state-owned establishments in fields such as education and training, health, culture, sports, science and technology, environment, society, population, family, and child protection and care as prescribed by law.

3. The authority approving the establishment of non-state-owned establishments has the right to suspend or dissolve operations when these establishments seriously violate their issued operating licenses or laws.

Article 18. Establishment of foreign-invested facilities

The establishment of foreign-invested facilities in the fields of education and training, healthcare, culture, sports, science and technology, environment, society, population, family, and child protection shall be carried out in accordance with the provisions of the law.

Chapter V
IMPLEMENTING PROVISIONS

Article 19. This Decree shall take effect fifteen days from the date of publication in the Official Gazette and shall replace Government Decree No. 73/1999/NĐ-CP dated August 19, 1999 on policies encouraging socialization for activities in the fields of education, healthcare, culture, and sports.

All previous regulations on policies encouraging socialization for activities in the fields of education, healthcare, culture, and sports that conflict with the provisions of this Decree shall be abolished.

Non-state-owned facilities established under Government Decree No. 73/1999/NĐ-CP dated August 19, 1999 must register with the competent authority for operation and the tax authority to continue enjoying the preferential policies stipulated in this Decree.

Article 20. The Ministers of Finance, Education and Training, Labor, Invalids and Social Affairs, Health, Culture, Sports and Tourism, Science and Technology, Natural Resources and Environment, Home Affairs, and the Director of the State Sports Committee, the Population, Family and Children Committee are responsible for coordinating with relevant ministries and sectors to provide specific guidance on the implementation of this Decree in accordance with the characteristics of each field's operations and organization.

Article 21. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the central government are responsible for enforcing this Decree.