Circular No. 66/2005/TT-BTC guiding the implementation of Decision No. 74/2005/QD-TTg dated April 6, 2005 of the Prime Minister on the use of land transfer fees, factory sale proceeds, and other construction project revenues when economic organizations must relocate their headquarters and production and business facilities according to planning.

CIRCULAR

Guidelines for implementing Decision No. 74/2005/QĐ-TTg dated April 6, 2005 of the Prime Minister on the use of funds from land transfer rights, sale of factories and other constructions when economic organizations must relocate their headquarters and production facilities according to planning.

Based on Decision No. 74/2005/QĐ-TTg dated April 6, 2005 of the Prime Minister on the use of funds from land transfer rights, sale of factories and other constructions when economic organizations must relocate their headquarters and production facilities according to planning due to environmental pollution as decided or announced by competent state agencies pursuant to Decision No. 74/2005/QĐ-TTg of the Prime Minister, the Ministry of Finance provides guidelines for implementation as follows:

I. Scope and Objectives of Implementation:

1. These Circulars guide the use of funds obtained from transferring land rights, selling factories and other construction works when economic organizations (state-owned enterprises, businesses operating under the Enterprise Law, Foreign Investment Law, Cooperative Law, and other economic organizations) have headquarters and production facilities that must be relocated according to planning due to environmental pollution as decided or announced by competent state agencies pursuant to Decision No. 74/2005/QĐ-TTg of the Prime Minister.

2. Economic organizations relocating their headquarters and production facilities not due to environmental pollution planning; units that are not economic organizations relocating their headquarters and production facilities due to environmental pollution are not subject to these Circulars.

II. Financial Handling Regarding Land as stipulated in Article 2 of Decision No. 74/2005/QĐ-TTg of the Prime Minister; some provisions of this article are detailed as follows:

1. Point a Clause 1 stipulates land currently being used within the planning for national defense, security, national interests, public interests, industrial zones, industrial clusters, high-tech zones, economic zones, and investment projects as prescribed in Article 36 of Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on the enforcement of the Land Law; in cases where the land is granted by the State with payment of land use fees but the paid land use fees do not belong to the state budget or the currently used land has a legal origin (eligible for issuance of land use right certificates without paying land use fees) as stipulated in Point a Clause 1 Article 2 of Decision No. 74/2005/QĐ-TTg of the Prime Minister, when such land is reclaimed, compensation and support shall be provided in accordance with Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and resettlement when the State reclaims land.

In cases where economic organizations lease land and pay rent to the State, but the currently used land has its origin as land granted by the State with payment of land use fees but the paid land use fees do not belong to the state budget or the currently used land has a legal origin (eligible for issuance of land use right certificates without paying land use fees), when such land is reclaimed, compensation and support regarding land shall be provided in accordance with Decree No. 197/2004/NĐ-CP of the Government.

In cases where the currently used land has its origin as agricultural land (transferred through assignment; used by households, individuals...), the compensation amount for economic organizations shall be determined by multiplying the area of land by the agricultural land price at the time of land compensation; the remaining difference (the difference between non-agricultural land prices and agricultural land prices) shall be handled in accordance with Point b Clause 1 Article 2 of Decision No. 74/2005/QĐ-TTg of the Prime Minister.

2. Point a Clause 2 stipulates land granted by the State with payment of land use fees but the paid land use fees do not belong to the state budget or the currently used land has a legal origin (eligible for issuance of land use right certificates without paying land use fees) when transferring land rights, such funds can be used in accordance with Article 7 of Decision No. 74/2005/QĐ-TTg of the Prime Minister.

In cases where land is leased and rent is paid to the State, but the currently used land has its origin as land granted by the State with payment of land use fees but the paid land use fees do not belong to the state budget or the currently used land has a legal origin (eligible for issuance of land use right certificates without paying land use fees), when transferring land rights, the unit can also use such funds in accordance with Article 7 of Decision No. 74/2005/QĐ-TTg of the Prime Minister.

3. Clause 3 stipulates that economic organizations can change the purpose of land use in accordance with planning to construct civil works (including residential buildings, high-rise buildings, and other construction works for business purposes) only applies to state-owned economic organizations with functions in construction business, having sufficient capacity to implement and meeting specific conditions prescribed by provincial People's Committees (except Ho Chi Minh City and localities implementing or permitted by the Prime Minister to apply Decision No. 80/2001/QĐ-TTg dated May 24, 2001 of the Prime Minister on handling and rearranging state-owned real estate in Ho Chi Minh City, which continue to implement the provisions of Decision No. 80/2001/QĐ-TTg).

The funds obtained from changing the purpose of land use by economic organizations shall be handled similarly to the case of transferring land rights as stipulated in Clause 2 Article 2 of Decision No. 74/2005/QĐ-TTg of the Prime Minister and detailed in Clause 2 of this Section.

4. Regarding the support fund for economic organizations that are not state-owned enterprises stipulated in Point b Clause 1, Point b Clause 2 Article 2 of Decision No. 74/2005/QĐ-TTg of the Prime Minister, based on actual conditions in the locality, the Chairman of the Provincial People's Committee decides the general support level in the province, city directly under the central government, serving as the basis for the Department of Finance to determine the specific support amount for each case.

III. Procedures and Formalities for Implementing Land Transfer Rights, Sale of Factories and Other Constructions, Changing the Purpose of Land Use as stipulated in Article 4 of Decision No. 74/2005/QĐ-TTg of the Prime Minister are detailed as follows:

The amount obtained from changing the land use purpose of economic organizations shall be handled as provided for in Clause 2 Article 2 of Decision No. 74/2005/QĐ-TTg of the Government Prime Minister and guided at Clause 2 Section this.

4. Regarding the support money for economic organizations that are not state-owned companies as stipulated in Point b Clause 1, Point b Clause 2 Article 2 of Decision No. 74/2005/QĐ-TTg of the Government Prime Minister, based on the actual situation in the locality, the Chairman of the People's Committee of the province shall decide the general level of support in the provincial area, which serves as the basis for the Department of Finance to determine the specific support amount for each case.

III. The procedures for implementing the transfer of land use rights, sale of factories and other constructions, and change of land use purpose as prescribed in Article 4 of Decision No. 74/2005/QĐ-TTg of the Government Prime Minister are specifically guided as follows:

Economic organizations with headquarters and production and business premises that must be relocated shall base themselves on land use plans approved by competent authorities in accordance with current land laws; they shall also base themselves on relocation decisions (notifications) issued by state agencies with authority:

1. Contact local functional agencies to find new locations for relocating their headquarters and production and business premises according to the planning and relocation regulations of the provincial People's Committee.

2. Submit a written request to the Department of Natural Resources and Environment, the Department of Planning and Architecture (Department of Construction) of the locality to determine the land use plan for the area currently being used by the organization which must be relocated.

After receiving the organization’s written request, the Department of Natural Resources and Environment, the Department of Planning and Architecture (Department of Construction) must provide written opinions on the land use plan for the economic organization's premises that must be relocated.

3. Develop relocation plans and solutions for relocating property and land bases: based on the land use plan approved by competent state authorities, the economic organization must submit a written request along with a solution for handling the property and land bases currently in use that must be relocated: selling factories, construction works, transferring land use rights, or changing land use purposes to implement civil construction projects for business purposes if conditions are met as stipulated in Clause 3, Section II of this Circular.

The relocation plans, solutions, and written requests mentioned above shall be sent to the relevant ministries, sectors, state-owned corporations established by the Prime Minister's decision, and the Ministry of Finance (for centrally-managed state economic organizations); and sent to the relevant departments, sectors, district-level People's Committees where the headquarters and production and business premises of state economic organizations managed by localities and non-state-owned economic organizations are located.

4. Documents related to property and land accompanying the relocation plans, solutions, and written requests for handling property and land bases that must be relocated include:

- Proof of ownership origin of houses and land use rights. In cases where there are no land or factory documents, confirmation from the district-level People's Committee regarding the land use process and the fact that the currently used land has no disputes shall be provided.

- A layout diagram of the current status of property and land in accordance with the regulations of functional agencies.

- Written opinions of the Department of Natural Resources and Environment, the Department of Planning and Architecture (Department of Construction) on the land use plan at the location of the headquarters and production and business premises that must be relocated.

5. After receiving the relocation plans, solutions, and written requests from economic organizations and the accompanying documents:

- The Minister, Head of a ministry equivalent to a ministry, agency under the Government, central agencies of mass organizations, Chairman of the Board of Directors of state-owned corporations established by the Prime Minister's decision shall examine and approve the relocation plans and solutions of economic organizations under their management.

- Departments, sectors, district-level People's Committees shall provide written opinions to the Department of Finance so that the Department of Finance can report to the provincial People's Committee for examination and approval of the relocation plans and solutions of each economic organization under their management.

IV. Authority to sell factories, construction works attached to land, and transfer land use rights as stipulated in Article 5 of Decision No. 74/2005/QĐ-TTg of the Prime Minister; some clauses of this provision are detailed as follows:

1. Clause 1 provides for the sale of factories, construction works attached to land, and the transfer of land use rights of state-owned enterprises (state economic organizations) decided by the representative of the owner in accordance with the law on state-owned enterprises as follows:

a) The Minister, Head of a ministry equivalent to a ministry, agency under the Government, central agencies of mass organizations, Chairman of the Board of Directors of state-owned corporations established by the Prime Minister's decision shall decide on the sale of factories, construction works attached to land, and the transfer of land use rights of state-owned enterprises (state economic organizations) under their management after obtaining the opinion of the Minister of Finance.

b) The Chairman of the provincial People's Committee shall decide on the sale of factories, construction works attached to land, and the transfer of land use rights of state-owned enterprises (state economic organizations) under local management.

2. Clause 2 concerning the sale of factories, construction works attached to land, and the transfer of land use rights of non-state-owned economic organizations shall be implemented as follows:

a) Economic organizations using land transferred by the State for a fee, where such fees do not belong to the State budget, or land with a legal origin from households or individuals (when issuing land use right certificates without paying land use fees), may independently decide on transferring land use rights, changing land use purposes according to the plan, and selling factories and other construction works in accordance with the law.

b) For economic organizations using land leased by the State, land transferred by the State without land use fees, land transferred with fees but exempted from payment, and other cases not covered by Clause 1, Point a Clause 2 of this Section, the transfer of land use rights shall be decided by the Chairman of the provincial People's Committee. In cases where factories or other construction works are assets built by the economic organization on the land, the provincial People's Committee shall consider handling them in one of the following two ways:

- Allowing the economic organization to independently decide on selling, after obtaining the opinion of the provincial People's Committee.

- The provincial People's Committee negotiating with the economic organization to purchase the assets on the land owned by the economic organization at market prices; then jointly auctioning the land use rights together with the assets.

V. Methods for selling factories, construction works attached to land as stipulated in Article 6 of Decision No. 74/2005/QĐ-TTg of the Prime Minister are detailed as follows:

1. Point a Clause 1 on auction sale: when state enterprises relocate to new locations, they must conduct auction sales for factories, other construction works, and land use rights for facilities that need to be relocated; the initial price of factories, other construction works, and the initial price of land use rights shall be determined in accordance with the laws on auctioning assets and land use rights. The person authorized to approve the results of the auction sale is the person authorized to decide on the sale of factories, other construction works, and the transfer of land use rights as stipulated in Clause 1 Section IV of this Circular.

2. Clause 2 provides for cases where the competent state agency permits the change of land use purpose, sale of factories, other construction works, and transfer of land use rights through designated sale methods; the prices of factories, other construction works, the transfer price of land use rights, and the price of land for changed purposes must closely match the actual market selling prices and transfer prices at the time of sale.

After the approval decision regarding the sale of factories, other construction works, and the transfer of land use rights; the change of land use purpose; economic organizations must organize the valuation of land, factories, and other construction works. The valuation of factories, other construction works, and land must be conducted through a state-authorized appraisal organization, which will be reviewed by the Provincial Department of Finance and submitted to the Chairman of the Provincial People's Committee for approval.

VI. The management and utilization of the proceeds specified in Article 7 of Decision No. 74/2005/QD-TTg of the Prime Minister are detailed as follows:

1. Based on the proceeds from the sale of factories, other construction works, the transfer of land use rights, the change of land use purpose, compensation and support for land, and compensation and support for assets on land, economic organizations are responsible for clearly identifying the value of land use rights and the value of factories and other construction works within the total proceeds received, and reporting to the relevant ministries, sectors, and state-owned corporations, while also sending to the Ministry of Finance (Provincial Department of Finance). The determination of the value of land use rights and assets on land must be based on the value structure (percentage) of each type of asset already determined in the total value of the property according to the decision (approval) of the competent authority as stipulated in Section IV of this Circular; in cases where the property is subject to state expropriation, the land compensation and support, and asset compensation and support according to the approved compensation plan. In the report sent to the relevant ministries, sectors, and state-owned corporations, and also sent to the Ministry of Finance, it must specify:

- The portion of land use fees, land transfer fees, factory and construction work sale proceeds, land compensation, and asset compensation, etc., belonging to the economic organization's capital.

- The portion of land use fees, land transfer fees, factory and construction work sale proceeds, land support, and asset support belonging to the state budget capital.

2. Based on the report of the economic organization; the provisions of the law on compensation, support, and resettlement; the regulations on the use of proceeds from the transfer of land use rights and the sale of factories and construction works when economic organizations must relocate according to the planning specified in Decision No. 74/2005/QD-TTg, the financial authorities at the same level are responsible for determining:

a) The portion of proceeds belonging to the economic organization's capital as stipulated in Point a Clause 1 Article 2, Point a Clause 2 Article 2, Point a Clause 1 Article 3, and relocation costs as stipulated in Point a Clause 1 Article 7 of Decision No. 74/2005/QD-TTg of the Prime Minister, specifically including:

- Costs invested in land using funds allocated by the state but not yet recovered (if any); costs invested in land using funds not from the state budget;

- The value of assets, land use fees, land transfer fees, land use purpose change fees, and compensation and support for economic organizations funded by the state or created by economic organizations using funds not from the state budget;

- Actual relocation costs not exceeding the approved standard; if there is no standard, then based on the actual market conditions locally;

- Costs related to the sale of factories, other construction works, the transfer of land use rights, and the change of land use purpose, including: surveying costs, sale costs, land transfer costs (valuation costs, appraisal costs, auction organization costs, and other related costs).

b) The portion of funds supported and used by state enterprises and state economic organizations as stipulated in Point b Clause 1, Point b Clause 2, Clause 3 Article 2, and Point b Clause 1 Article 3 of Decision No. 74/2005/QD-TTg, which is state budget investment for state economic organizations; the portion of support for non-state economic organizations as stipulated in Point b Clause 1 and Point b Clause 2 Article 2 of Decision No. 74/2005/QD-TTg of the Prime Minister.

c) Any remaining portion (if any) must be deposited into the state budget in accordance with current state budget decentralization laws.

VII. Procedures and formalities for depositing and disbursing proceeds from the sale of factories, the transfer of land use rights, the change of land use purpose, and land support and asset support:

1. Proceeds from the sale of factories, other construction works, the transfer of land use rights, the change of land use purpose, and land support and asset support, after deducting the portion belonging to the economic organization's capital as stipulated in Point a Clause 2 and the amount required to be deposited into the state budget as stipulated in Point c Clause 2 Section VI of this Circular; the remaining portion, which is state budget investment and support for economic organizations, must be fully deposited into a temporary holding account at the provincial State Treasury by the representative owner (ministries, sectors, state-owned corporations) as the account holder for centrally-managed state economic organizations; the Provincial Department of Finance as the account holder (for other economic organizations), and must be tracked in detail for each relocating economic organization.

2. The disbursement of funds from the temporary holding account at the State Treasury of the province or centrally-administered city shall be carried out as follows:

2.1. For state economic organizations:

a) Based on the application dossier of the Ministry, agency equivalent to a ministry, central agency of mass organizations, State-owned Corporation established by the Prime Minister's decision (for state economic organizations under the central level); Department, agency, People's Committee of district, State-owned Corporation established by the People's Committee of the province's decision (for state economic organizations under the local level), the Minister of Finance (Department Director of Finance) shall examine and decide to disburse funds from the temporary holding account for economic organizations according to the investment project approved by the competent authority.

The dossier accompanying the request letter serving as the basis for the Ministry of Finance (Department of Finance) to decide on the disbursement of funds includes:

- Decision of the competent authority allowing the sale of factories, other construction works, transfer of land use rights, change of land use purpose.

- Decision approving the investment project of the competent authority in accordance with current regulations on investment management and construction.

- Confirmation by the provincial State Treasury regarding the amount deposited into the temporary holding account.

b) The Minister, head of an agency equivalent to a ministry, government agency, central agency of mass organizations, Chairman of the Board of Directors of the State-owned Corporation established by the Prime Minister's decision (Department Director, agency director, Chairman of the People's Committee of district, Chairman of the Board of Directors of the State-owned Corporation established by the People's Committee of the province's decision) shall implement the allocation of investment capital according to the decision already approved by the competent authority (as stipulated in point a of this Clause) and send it to the economic organization, State Treasury, and the same-level financial agency.

2.2. For economic organizations that are not state economic organizations, the Director of the Provincial Department of Finance of centrally-administered cities shall decide on the disbursement and divide it into three installments according to the progress of the investment project of the production and business establishment at the new location. In cases where the support amount is less than VND 1 billion, the entire support amount may be disbursed in one installment to the economic organizations; simultaneously, the recording of revenue and expenditure in the state budget shall be implemented.

3. The State Treasury of the province or centrally-administered city shall carry out the disbursement of funds from the temporary holding account in accordance with the current regulations on the management, disbursement, and settlement of basic construction investment capital. The total amount disbursed for each project shall not exceed the amount approved in the Decision of the Minister of Finance (Department Director of Finance); the remaining amount after the settlement of the investment project (if any) must be paid into the state budget.

4. Accounting of state budget revenue and expenditure for temporarily held funds at the State Treasury of the province or centrally-administered city:

4.1. The accounting of state budget revenue and expenditure shall be carried out based on the principle that the revenue and expenditure figures resulting from the recording of income and expenditure that are not balanced in the state budget, but only reflect the recording of income and expenditure through the state budget to manage assets invested from state budget sources; only the excess revenue that must be paid into the state budget will be counted towards the balanced state budget revenue.

4.2. Procedure for implementation:

a) Annually, after the expiration of the investment capital payment period (January 31 of the following year), the provincial or centrally-administered city State Treasury shall prepare a detailed report for each unit (according to each decision of the competent authority) covering the following contents: amount returned; amount paid within the fiscal year; cumulative amount paid; outstanding advance payments. This report shall be sent to the Ministry of Finance for units under central management, and to the Department of Finance for units under local management before February 20 of the following year to process the recording of income and expenditure corresponding to the investment capital that has met the conditions for payment into the state budget in accordance with the regulations. The financial agency shall process the recording of income and expenditure into the budget; one copy of the voucher for the State Treasury to manage the temporary holding account; one copy of the voucher for the supervising agency, which is responsible for notifying the subordinate economic organizations.

Regarding the accounting of Item and Sub-item according to the State Budget Classification:

+ Record income into Item 067 (item for selling assets), corresponding sub-item.

+ Record expenditure: when spending, record according to the content of the expenditure items as prescribed.

- Regarding the accounting of Chapter: for the amount decided to be allocated to economic organizations under the central budget, record into the Chapter of the Ministry, central agency receiving the capital; for local economic organizations managed by the locality, record into the corresponding Chapter of the Department, agency,...

For the remaining amount to be paid into the state budget, record into Level B Chapter (provincial, centrally-administered city budget) corresponding to the Chapter of the Ministry, central agency; if Level B does not have a corresponding Chapter, record into Chapter 150B.

- Regarding the adjustment between levels of budget, follow the principle: the budget of the level managing the unit shall record income and expenditure, specifically:

+ The portion allocated to economic organizations under central management, the central budget records income and adjusts 100% for the central budget to benefit from.

+ The portion allocated to economic organizations under local management, the local budget records income and adjusts 100% for the local budget to benefit from.

+ The portion paid into the budget, adjust 100% for the local budget to benefit from.

b) Upon completion of the investment project, economic organizations shall prepare a final settlement report of the completed project and submit it to the supervising agency. The supervising agency shall review and compare the vouchers sent by the financial agency to examine and approve the final settlement of the completed project according to the prescribed regulations; if the amount paid to the State Treasury exceeds the approved final settlement amount, the economic organization must immediately pay the excess into the state budget in accordance with this Circular.

VIII. Implementation Provisions:

This Circular shall take effect 15 days from the date of publication in the Official Gazette. During the implementation, if any difficulties arise, please promptly report to the Ministry of Finance for guidance./.