Circular No. 73/1998/TT-BTC guiding the financial management regime for state-owned enterprises in educational institutions and research facilities.

CIRCULAR

Guidelines on financial management for state-owned enterprises in educational institutions and research facilities

 in educational institutions and research facilities

Implementing Decision No. 68/1998/QĐ-TTg dated March 27, 1998 of the Prime Minister regarding the pilot establishment of state-owned enterprises in educational institutions and research facilities; the Ministry of Finance issues guidelines on financial management for state-owned enterprises in educational institutions and research facilities as follows:

A. GENERAL PROVISIONS

1. The subject of this Circular is state-owned enterprises as defined in Article 1 and Article 12 of Decision No. 68/1998/QĐ-TTg dated March 27, 1998 of the Prime Minister regarding the pilot establishment of state-owned enterprises in educational institutions and research facilities.

2. State-owned enterprises in educational institutions and research facilities must comply with the financial management regulations and accounting rules already stipulated in Decree No. 59/CP dated October 3, 1996 of the Government and the guiding documents issued by the Ministry of Finance for business enterprises. This Circular only specifies those points that differ from the general financial management and accounting regime, which are suitable to the characteristics of state-owned enterprises operating within public service units that are educational institutions and scientific research facilities.

3. Educational institutions and research facilities shall establish financial management regulations for state-owned enterprises under their management in accordance with the general provisions and the provisions set forth in this Circular. These regulations shall be promulgated after obtaining written agreement from the Ministry of Finance.

B. SPECIFIC PROVISIONS

I. MANAGEMENT AND USE OF CAPITAL AND ASSETS AT THE ENTERPRISE:

1. Capital Investment.

1.1. Newly established state-owned enterprises in educational institutions and research facilities shall be guaranteed initial registered capital from the value of buildings and equipment transferred by the educational institution or research facility or from state capital. The level of investment at the time of enterprise establishment shall not be less than 30% of the minimum statutory capital required for the highest regulated industry as specified in Appendix 2 to Decree No. 50/CP dated August 28, 1996 of the Government, but shall not exceed one-third of the total value of buildings and equipment of the educational institution or research facility.

1.2. State-owned enterprises currently operating in educational institutions and research facilities that generate profits, if their actual capital is lower than 30% of the statutory capital as stipulated in point 1.1 above, may be gradually supplemented by the state to reach 30% of the statutory capital through direct allocation from the state budget.

1.3. The authority issuing the decision to establish the enterprise shall ensure the registered capital at the time of enterprise establishment according to Article 2 of Decree No. 50/CP dated August 28, 1996 of the Government.

2. Capital raising and external investment.

2.1. State-owned enterprises in educational institutions and research facilities are allowed to raise capital, call for joint venture capital, mortgage the value of capital attached to assets under their management at credit organizations to borrow funds for production and business activities, and use capital, assets, land value, or rental income from land to invest outside the enterprise.

The plan for raising capital or investing capital outside the state-owned enterprise must be agreed upon by the head of the educational institution or research facility and submitted to the head of the authority deciding to establish the enterprise for approval, and then sent to the agency managing state capital and assets in the enterprise.

2.2. The interest rate for raising capital recorded in the cost of production and services of the enterprise shall not exceed the ceiling interest rate for loans published by the State Bank of Vietnam for each industry at the time of capital raising.

2.3. State-owned enterprises in educational institutions and research facilities must use raised capital for its intended purpose effectively, repay principal and interest according to the capital-raising commitment. In cases where capital or assets are invested outside the enterprise, they must comply with legal regulations, ensuring the principle of effectiveness, preservation, and development of capital, and increasing income.

2.4. The General Director of state-owned enterprises in educational institutions and research facilities shall bear legal responsibility before the law, the head of the authority deciding to establish the enterprise, and the head of the educational institution or research facility for the preparation of plans for raising capital and investing capital outside the enterprise, using capital for its intended purpose, and failing to achieve effectiveness leading to capital loss.

3. Transfer, lease, mortgage, or pledge of assets.

3.1. The transfer, lease, mortgage, or pledge of assets managed by the enterprise from budgetary sources must be approved by the head of the educational institution or research facility. For the main production technology chain of the enterprise, it must also be approved by the authority deciding to establish the enterprise.

3.2. When selling non-essential or obsolete assets to recover capital, the enterprise must determine the price and organize a public auction in accordance with the law. The difference between the proceeds from the sale of the asset and its remaining book value and the costs of the sale shall be recorded in the enterprise's business results.

4. Liquidation of assets.

4.1. Major machinery, equipment, and other assets essential to the operation of the enterprise when liquidated must be approved by the head of the educational institution or research facility and the authority deciding to establish the enterprise.

The liquidation of other assets shall be carried out in accordance with the regulations applicable to state-owned enterprises engaged in business operations.

4.2. The enterprise must establish a liquidation committee, organize a public auction for the sale of liquidated assets in accordance with the law. The difference between the proceeds from the sale of the liquidated asset and its remaining book value and the costs of liquidation shall be recorded in the enterprise's business results.

II. FINANCIAL RESULTS OF THE ENTERPRISE

1. Revenue of state-owned enterprises in educational institutions and research facilities.

Revenue of state-owned enterprises in educational institutions and research facilities includes:

- Revenue from science and technology products and services, revenue from research and development contracts applying technology, technology transfer, and training.

- Revenue from training and research contracts between enterprises and their own educational institutions and research facilities.

Business income and other activities shall be regulated as for state-owned enterprises engaged in business operations.

2. Expenses of state-owned enterprises in educational institutions and scientific research facilities.

2.1. Expenses of state-owned enterprises in scientific research facilities and educational institutions shall be regulated as for state-owned enterprises engaged in production and business operations.

2.2. The wage rate must be approved by the competent authority in accordance with Decree No. 28/CP dated March 28, 1997 of the Government and guiding Circulars of the Ministry of Labor, Invalids and Social Affairs.

- In cases where teachers, scientific staff, and employees belonging to the establishment's payroll of educational institutions and scientific research facilities work at enterprises, the portion of wages paid by the educational institution or scientific research facility shall be based on the time spent working at such institutions. The portion of wages paid by the enterprise shall also be based on the time and effectiveness of work performed at the enterprise within the approved wage rate.

- In cases where teachers, scientific staff, and employees have been transferred to work at enterprises and belong to the enterprise's payroll, they shall still have the right to sign contracts to participate in training and research activities at educational institutions and scientific research facilities, in addition to receiving salaries and bonuses according to the salary and bonus system in state-owned enterprises.

III. DISTRIBUTION OF PROFITS AND ESTABLISHMENT OF FUNDS

1. Enterprise profit: The difference between total revenue and the full cost of products, services, research contracts, and training contracts.

2. Distribution of profits: The total annual profit of the enterprise shall be distributed in the following order:

2.1. Corporate Income Tax: Shall be fully returned to the educational institution and research facility to build infrastructure, purchase equipment for teaching, learning, scientific research, and technological development in accordance with approved projects under Section V below.

2.2. Payment of fines: Administrative penalties, contract breach penalties, overdue debt penalties.

2.3. Distribution of dividends to capital contributors according to joint venture contracts (if applicable).

Remaining profits shall be allocated to the enterprise's funds in accordance with general regulations for production and business enterprises.

IV. CONDITIONS AND PROCEDURES FOR RETURNING ENTERPRISE CORPORATE INCOME TAX TO EDUCATIONAL INSTITUTIONS AND RESEARCH FACILITIES

1. Educational institutions and research facilities shall be entitled to receive the return of corporate income tax from enterprises managed by them when meeting the following conditions:

- At the end of the fiscal year, state-owned enterprises within educational institutions and research facilities generate profits, which are verified and confirmed by the Tax Authority at the main office location of the enterprise regarding the amount of corporate income tax paid to the budget.

- Having investment projects for construction and procurement of equipment for teaching, learning, and scientific research approved by the competent authority in accordance with current regulations.

2. Procedures for returning corporate income tax:

When meeting the conditions stipulated in point 1 of Section V above, educational institutions and research facilities shall submit to the Ministry of Finance (State Capital Management总局可以直接翻译剩余的文本，无需分段解释。以下是直接翻译的结果：

- A request for the return of corporate income tax signed and stamped by the head of the educational institution or research facility.

- A verification record of the corporate income tax paid by the enterprise issued by the Tax Authority.

- Decisions approving investment projects for construction and procurement of equipment, and decisions allocating investment plans for construction and procurement of equipment by the competent authority.

Within fifteen days of receiving complete and valid documents, the Ministry of Finance will review and examine. If the conditions are met, it will notify in writing the educational institution, research facility, and enterprise simultaneously to process the return of corporate income tax to the educational institution and research facility. The educational institution and research facility are responsible for managing, using, and settling the returned corporate income tax as if it were state capital or funding provided by the state budget according to current financial management regulations.

V. ACCOUNTING AUDIT, FINANCIAL REPORTING AND FINANCIAL DISCLOSURE

Implement as prescribed for other production and business enterprises.

C. IMPLEMENTATION PROVISIONS

1. In addition to the specific provisions for state-owned enterprises within educational institutions and scientific research facilities in this Circular, these enterprises shall comply with other laws governing state-owned enterprises engaged in production and business operations.

2. This Circular takes effect from the date of issuance. During implementation, any issues encountered should be promptly reported to the Ministry of Finance for study and appropriate amendments.