Decree No. 69/2008/ND-CP On policies to encourage socialization in activities within the fields of education, vocational training, healthcare, culture, sports, and environment

DECREE

Regarding the policy to encourage socialization in activities within the fields of education, vocational training, healthcare, culture, sports, and environment.

THE GOVERNMENT

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

Considering the proposal of the Minister of Finance,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope and Objects Regulated

1. Scope of Application of this Decree

The field of socialization includes: education and training, vocational training; healthcare; culture; physical culture and sports; environment.

2. Subjects Regulated by this Decree

a) Non-state-owned establishments that have been established and meet the conditions for operation as prescribed by competent state authorities in the fields of socialization;

b) Organizations and individuals operating under the Law on Enterprises with investment projects, joint ventures, joint operations, or establishment of establishments operating in the fields of socialization that meet the conditions for operation as prescribed by competent state authorities;

c) Public service establishments implementing capital contributions, fundraising, joint ventures, or joint operations according to the provisions of the law to establish independent accounting units or enterprises operating in the fields of socialization as decided by competent state authorities.

(Hereinafter referred to as socialization implementation establishments).

3. For foreign-invested projects in the field of socialization, the implementation of preferential policies as stipulated in this Decree shall be decided by the Prime Minister based on the proposal of the Ministry of Planning and Investment and relevant sectoral ministries.

Article 2. Conditions for Enjoying Encouragement Policies for Socialization Development

The condition for socialization implementation establishments to enjoy the encouragement policies for socialization development stipulated in this Decree is that the establishment must belong to the list of types, criteria, scale, and standards decided by the Prime Minister.

Article 3. Non-State-Owned Establishments

1. Non-state-owned establishments are establishments established, invested in building material infrastructure, self-funding operational expenses from non-governmental funds, and operating according to the law by social organizations, social-professional organizations, economic organizations, individuals, groups of individuals, or community residents.

2. Non-state-owned establishments established in accordance with the law shall have legal personality, independent accounting, seals, and separate bank accounts.

Article 4. Principles for Implementing Encouragement Policies for Socialization

1. Socialization implementation establishments established and licensed to operate must comply with planning and meet the criteria regarding scale and standards as prescribed to develop educational and training, healthcare, cultural, physical culture and sports, and environmental services.

2. The State and society shall respect and treat equally the products and services provided by socialization implementation establishments.

3. The State has the responsibility to allocate land or lease land that has completed land clearance according to planning and land use plans for socialization implementation establishments; implement financial support policies for compensation and land clearance costs for investment projects in the field of socialization that have independently carried out compensation and land clearance work since the effective date of this Decree.

4. The State applies preferential tax rates on corporate income tax for socialization implementation establishments to encourage investment in strengthening material infrastructure and improving service quality.

5. The State implements support policies for social welfare beneficiaries when they utilize services provided by socialization implementation establishments; the method of support shall be decided by the Prime Minister.

6. Socialization implementation establishments may engage in joint ventures and collaborations with domestic and foreign organizations and individuals consistent with their functions and tasks to mobilize capital, human resources, and technology, thereby enhancing service quality.

7. Assets supported, donated, or granted without repayment by the State during the operation of socialization implementation establishments shall not be distributed to individuals but shall be used collectively for the benefit of the establishment and the community.

8. Socialization implementation establishments may participate in providing public services funded and commissioned by the State; participate in bidding for contracts and projects using domestic and foreign funds consistent with their functions and tasks as prescribed by law.

9. Non-state-owned healthcare establishments and enterprises operating in the healthcare field that meet the conditions for diagnosis and treatment as prescribed by health management authorities are permitted to organize diagnosis and treatment for insured individuals who choose their own healthcare facilities.

Chapter II

POLICIES TO ENCOURAGE SOCIALIZATION DEVELOPMENT

Article 5. Leasing and Construction of Physical Facilities

1. The provincial People's Committee shall utilize existing housing funds and infrastructure, or construct houses and infrastructure to lease long-term at preferential rates to entities implementing socialization. The maximum preferential rate does not include land rental fees, compensation for land clearance, and interest on business housing and infrastructure.

2. The provincial People's Committee is responsible for creating favorable conditions for entities implementing socialization to invest in constructing schools, hospitals, recreational areas, sports facilities, museums, libraries, cultural houses, theaters, cinemas, etc., according to approved planning.

Article 6. Allocation and Leasing of Land

1. Entities implementing socialization shall be allocated land or leased land that has been cleared for construction of socialization projects through the following methods:

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

b) Leasing of land with exemption from land rental fees;

c) Allocation of land with payment of land use fee and exemption from land use fee.

For urban land and residential land, the provincial People's Committee shall base on local realities to establish regulations for allocating land with payment of land use fee, leasing land with payment of land rental fee, and simultaneously establishing regulations for exemption and reduction of land use fee and land rental fee according to the law.

In cases where the investor has prepaid compensation and resettlement support costs for the socialization project according to the approved plan (from the date this Decree takes effect), the state budget will reimburse the amount of compensation and support invested for the area of land serving social activities.

2. In cases where entities implementing socialization are allocated land with payment of land use fee and exempted from land use fee but wish to implement according to the method of allocating land with payment of land use fee or leasing land with one-time payment for the entire lease period to carry out investment projects (without implementing the exemption and reduction of land use fee), they shall follow current regulations on payment of land use fee or leasing land with one-time payment for the entire lease period and deduct pre-paid compensation and support costs (if any) from the land use fee and land rental fee payable.

In this case, entities implementing socialization shall include the value of land use rights in the value of project assets and have the rights and obligations of economic organizations allocated land with payment of land use fee according to current laws on land.

3. In cases where two or more investors register to choose the same location to implement investment projects in the field of socialization, competitive bidding shall be conducted to select the project that best meets the criteria of scale, quality, and effectiveness.

The Ministry of Planning and Investment shall take the lead and coordinate with the Ministry of Natural Resources and Environment and relevant ministries and sectors to provide detailed guidance on bidding for projects under this situation.

4. Entities implementing socialization using legally obtained land shall be issued a Certificate of Land Use Rights, and their lawful land use rights, ownership of houses, and property shall be protected by the State according to the law. Procedures and formalities for allocation and leasing of land and issuance of Certificates of Land Use Rights shall be carried out according to current laws on land.

5. The use of land by entities implementing socialization must comply with the purpose, conform to planning, and adhere to all provisions of the law on land. Upon expiration of the land allocation or lease period, if the entity implementing socialization no longer requires continued use, is dissolved, or moves elsewhere, it must return the allocated land to the State; in cases of improper use or lack of effectiveness, the State will reclaim the land.

6. When entities implementing socialization are allocated land with exemption from land use fee and leased land with exemption from land rental fee, they may not include the value of the currently used land in the value of project assets and may not use the land as collateral for loans.

7. Entities implementing socialization may not transfer land allocated by the State for socialization projects. If transfer is permitted by competent authorities, post-transfer use must not change the purpose of land use for social activities. In such cases, the provincial People's Committee shall reclaim the land previously allocated to the original investor and allocate or lease land to the new investor according to current laws on land.

8. For land legally transferred from organizations and individuals, entities implementing socialization may include the value of the currently used land use rights in the project assets and recover investment capital through depreciation according to the law.

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

1. Socialized entities are exempt from stamp duty when registering land use rights and ownership of immovable property attached to land; they are also exempt from other related fees and duties concerning land use rights and immovable property attached to land. The provincial People's Committee shall consider and decide on exemptions and reductions of infrastructure usage fees for socialized entities in accordance with the provisions of the law.

2. Socialized entities are entitled to preferential treatment regarding value-added tax, export tax, and import tax as stipulated in the Law on Value-Added Tax, the Law on Export Tax, the Law on Import Tax, and current regulations.

Article 8. Corporate income tax application

Socialized entities generating income from socialization activities shall be subject to a corporate income tax rate of 10% throughout their operational period.

Newly established socialized entities from the date this Decree takes effect shall be exempt from corporate income tax for four years, starting from the time they begin to generate taxable income, and shall have their corporate income tax reduced by 50% for the following five years.

In cases where newly established socialized entities are formed from the date this Decree takes effect in investment incentive areas as specified in Appendix B issued together with Decree No. 108/2006/NĐ-CP dated September 22, 2006 of the Government, they shall be exempt from corporate income tax for four years, starting from the time they begin to generate taxable income, have their corporate income tax reduced by 50% for nine subsequent years, and shall be subject to a corporate income tax rate of 10% throughout their operational period.

Socialized entities established before the effective date of this Decree shall enjoy corporate income tax preferences according to the principle that if the duration of previous tax incentives has expired, they shall be subject to a 10% tax rate from the effective date of this Decree. If the duration of previous tax incentives still remains, they shall continue to enjoy tax incentives under this Decree after deducting the previously enjoyed period. The Ministry of Finance shall provide specific guidance for these cases.

For socialized entities engaging in various business types, they must separately account for income generated from socialization activities to apply the corporate income tax rate as prescribed in this Decree. Income from activities outside the scope of socialization activities defined in this Decree shall be subject to tax obligations in accordance with the law.

Article 9. Preferential policies on credit

Socialized entities within the scope and objects defined in Articles 1 and 2 of this Decree are eligible to borrow investment credit or post-investment support in accordance with state investment credit regulations.

Article 10. Capital Mobilization

Socialized entities are permitted to raise capital through share contributions, labor contributions from employees within the entity, and other lawful sources of capital through cooperation and collaboration with enterprises, economic organizations, financial institutions, and individuals both domestically and internationally to invest in building physical facilities.

Article 11. Social Insurance and Health Insurance

Workers at entities implementing socialization shall be entitled to social insurance and health insurance in accordance with current State regulations.

Article 12. Awards

1. Groups and workers at entities implementing socialization who achieve outstanding results shall be awarded by the State in accordance with the law.

2. Individuals and groups contributing to socialization activities shall be recognized, encouraged, and awarded by the State in accordance with the law.

3. Ministries, sectors, and localities shall guide procedures and processes for reviewing and awarding commendations to individuals and groups contributing to socialization activities and to entities implementing socialization within their jurisdiction in accordance with the law.

Article 13. Handling of Assets When Changing Forms of Operation

1. For land: public and semi-public entities authorized to decide on transitioning to non-public forms or enterprises shall continue to be granted land by the State for their operations. Land not put into use or used for purposes other than those intended must be returned to the State.

2. For assets on land: assets invested from state budget sources or with origins from the state budget shall be inventoried and revalued according to regulations and leased or given priority for purchase by non-public entities.

The authority deciding to convert public and semi-public entities into non-public entities has the right to decide on selling and leasing state-owned assets to non-public entities in accordance with current asset management regulations.

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

3. In cases where semi-public units under public entities are authorized to decide on returning to public entities, they must conduct an inventory and valuation of assets according to regulations for tracking and managing them under current asset management systems.

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

a) If the investor wishes to reclaim the assets, the assets will be returned to the investor.

b) If the public entity receiving the assets has a need to use them and agrees to accept them, the Valuation Council will determine the price as the basis for settlement with the investor.

c) If the public entity does not have a need to use the assets and the investor does not want to reclaim them, the assets will be liquidated and sold to repay the investor.

4. In cases where private (private sector) entities are converted from private (non-state) entities, where accumulated assets from the results of the private (non-state) entity's operations belong to collective ownership, these assets shall be identified and transferred to the private (private sector) entity for management and use in accordance with the principle of preservation and development, without being divided among individuals and protected by the State in accordance with the law.

Chapter III

SOURCES OF REVENUE AND DISTRIBUTION OF FINANCIAL RESULTS

Article 14. Sources of Revenue for Entities Implementing Socialization

1. Fees and charges.

Entities implementing socialization may independently determine the level of fees based on ensuring necessary costs for operations and accumulating funds for investment and development.

2. Revenue from other goods and service provision activities.

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

4. Budget funding (if applicable) includes:

a) Funding for tasks ordered by the State;

b) Funding to support research and technology projects;

c) Funding for national target programs;

d) Funding for worker training and development programs;

đ) Grants and interest subsidies;

e) Other funding.

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

Article 15. Distribution of Financial Results of Socialized Entities

1. Based on annual financial results, the income of socialized entities after covering all expenses, paying interest on loans, and fully remitting taxes to the state budget as prescribed by law shall be allocated to establish funds and distribute profits to capital contributors.

2. For non-state-owned entities operating in areas of socialization established under the Enterprise Law, the establishment of funds, the level of income paid to employees, and profit distribution to capital contributors shall be decided by the Board of Directors (or School Council) or the Head (for entities without a Board of Directors) of such non-state-owned entities or socialized entities established under the Enterprise Law, in accordance with the charter of operation of the entity (for non-state-owned entities) or the Enterprise Law (for socialized entities established under the Enterprise Law).

Chapter IV

RESPONSIBILITIES OF SOCIALIZED ENTITIES

Article 16. Responsibilities of Socialized Entities

1. Socialized entities must register with tax authorities when operating as a basis for determining tax benefits and obligations.

2. Socialized entities must comply with their operational charters, ensuring professional, technical, human resource, and physical infrastructure conditions as prescribed by law to provide society with products and services that meet content and quality standards.

3. Socialized entities have the responsibility to publicly disclose fee and charge levels for each service, publicly report activities, and publicly disclose finances as prescribed by law, including the level of support and the amount of state budget support (if applicable).

Regularly report the situation of operations and finances of the entity to the sector management agency, financial agency, and tax authority at the same level as prescribed by law.

4. Socialized entities have the responsibility to implement inspection and audit requirements from financial agencies and other competent state agencies. Provide complete and timely relevant materials related to the content of inspections and audits and bear responsibility for the accuracy and truthfulness of the provided information and materials.

5. Socialized entities have the responsibility to organize accounting and statistical work; conduct annual audits and publicly disclose audit results as prescribed by law.

Chapter V

STATE MANAGEMENT OF ENTITIES PROVIDING SERVICES IN THE FIELD OF SOCIALIZATION SUPPLY OF SERVICES IN THE SOCIALIZATION FIELD

Article 17. Tasks of Sectoral Ministries

1. Coordinate with the Ministry of Natural Resources and Environment, relevant ministries, and provincial People's Committees to develop land use plans and programs according to sectors, fields, and regions.

2. Develop guidelines for socialization; guide criteria regarding organizational scale, standards, and operational conditions of socialized entities within their management scope as a basis for implementation.

3. Issue policies and systems to encourage socialization suitable to various forms of operation, meeting the development requirements of each field during different periods and regions.

4. Manage uniformly the content, programs, quantity, and quality requirements of services in each field as a basis for organizing implementation and monitoring by all levels, sectors, and the entire society.

5. Decide on the establishment or cessation of operations of socialized entities within their jurisdiction, functions, tasks, and delegated authority as prescribed by law.

6. Manage and create conditions for international cooperation for socialized entities within their responsibility.

7. Lead and coordinate with provincial People's Committees to inspect and audit compliance with state regulations by socialized entities; handle violations as prescribed by law.

8. Develop and guide provincial People's Committees to build programs and implement strict management measures for the activities of socialized entities to ensure they align with their intended purposes, content, and service quality as prescribed by each specialized sector.

9. Report evaluations of socialization implementation within their management scope and compile the overall situation of socialization implementation in their sector and submit to the Ministry of Finance every February for the Ministry of Finance to compile and report to the Prime Minister.

10. The Ministers of the Ministries of Education and Training, Labor, Invalids and Social Affairs, Health, Culture, Sports and Tourism, and Natural Resources and Environment, in accordance with their respective state management functions, are responsible for coordinating with the Ministry of Finance, the Ministry of Home Affairs, and relevant ministries and sectors to issue regulations within their authority, or propose to competent authorities for decision-making:

a) Conditions for establishment and operation of socialized entities. Issue standards for professional staff and physical infrastructure for socialized entities;

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

c) Determine transition timelines and procedures for semi-public entities to become non-public entities or operate as enterprises.

Article 18. Tasks of the People's Committee of the province

1. To build, manage planning, and land use plans in accordance with current laws on land; to be responsible for publicly announcing before December 31, 2008, the land use planning for socialized sectors.

2. To develop training and human resource utilization plans to meet the requirements of implementing socialization tasks.

3. To assign tasks to land development organizations or local state units to carry out land clearance work before transferring land or leasing land according to planning for socialized entities.

Land development organizations or state units assigned these tasks by the provincial or centrally-administered city authorities shall be responsible for compensation, support, and resettlement for land serving social activities. The compensation, support, and resettlement funds for land serving social activities shall be guaranteed by the state budget.

The central budget implements a targeted support mechanism for local budgets that need additional balance from the central budget to fulfill the tasks of compensation, land clearance, and resettlement support for land serving social activities. The level of support is 70% for mountainous provinces; 50% for other provinces. The People's Committee of the province shall report to the People's Council of the province to decide on the use of land revenue, lottery revenue retained, and local budget sources to ensure the remaining funding.

For centrally-administered cities and provinces with a ratio of revenue transferred to the central budget, they must allocate from their local budget to implement the tasks of compensation, support, and resettlement for land serving social activities.

4. To direct and assign relevant agencies to implement bidding procedures for projects for socialized entities in accordance with this Decree.

5. Based on the capacity of the local budget, to submit to the same-level People's Council to decide on the mechanism and level of financial support for infrastructure investment for socialized projects.

6. When building or adjusting provincial or centrally-administered city land use planning, it must ensure allocation of land for social activities; when building new urban area development planning or industrial zone development planning, land must be allocated according to planning for investment and construction to develop socialized entities.

7. To publicly announce the procedures and processes for land transfer and lease to socialized entities.

8. Based on specific conditions of the locality, to issue specific preferential policies to encourage, promote, and expand socialization forms; to perform state management functions over socialized entities in accordance with guidelines from specialized ministries.

9. To supervise and inspect socialized entities regarding proper and effective land management and use; to handle violations according to the law.

10. To report annually in January on the implementation of local policies encouraging social development by sector to specialized ministries for consolidation and reporting to the Prime Minister through the Ministry of Finance.

Article 19. Authority to permit establishment, conversion from public to non-public operation, and suspension or dissolution of activities

1. The authority that decides on the establishment of public and semi-public facilities has the right to decide on converting the type of activity from public or semi-public to non-public or converting public facilities to operate under a business model.

2. The authority to decide on establishing new non-public facilities in the fields of education and training, vocational training, healthcare, culture, sports, and environment shall be carried out in accordance with the provisions of the law.

3. The authority that decides on the establishment of non-public facilities has the right to suspend operations or dissolve when such non-public facilities seriously violate the provisions in their operating licenses or violate legal regulations.

Article 20. Establishment of foreign-invested facilities

The establishment of foreign-invested facilities in the field of socialization as stipulated in this Decree shall be implemented in accordance with the provisions of the law.

Chapter VI

IMPLEMENTING PROVISIONS

Article 21. This Decree shall take effect fifteen days after its publication in the Official Gazette.

Previous policies encouraging socialization in the fields of education and training, vocational training, healthcare, culture; physical education and sports; and the environment that contradict the provisions of this Decree are hereby abolished.

Non-public facilities established according to Decree No. 73/1999/NĐ-CP dated August 19, 1999, and Decree No. 53/2006/NĐ-CP dated May 25, 2006, of the Government must register with the licensing authority and tax agency to enjoy the preferential policies stipulated in this Decree.

Organizations and individuals operating under the Enterprise Law with independent projects in the field of socialization listed in the Prime Minister's directive must register with the competent state authorities and tax agency to enjoy the preferential policies stipulated in this Decree.

Article 22. The Ministers of Education and Training, Labor, Invalids and Social Affairs, Health, Culture, Sports and Tourism, Natural Resources and Environment are responsible for: compiling a list of types, criteria regarding scale and quality standards for each field to submit to the Prime Minister for decision; developing and promulgating, within their authority, quality assessment standards, procedures for organization and implementation, and establishment of quality assessment agencies for units and organizations operating in the field of socialization; leading and coordinating with relevant ministries and sectors to provide detailed guidance on the application of this Decree in accordance with the characteristics and organizational structure of each field.

Article 23. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the Central Government shall be responsible for implementing this Decree.