Decision No. 91/2005/QD-BTC On the Issuance of Financial Management Regulations for Business Operations of Prize Games

DECISION OF THE MINISTER OF FINANCE

Regarding the issuance of Financial Management Regulations

for the operation of prize-based game businesses

 

THE MINISTER OF FINANCE

 

Pursuant to Decree No. 24/2000/ND-CP dated July 31, 2000 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam; Decree No. 27/2003/ND-CP dated March 19, 2003 of the Government amending and supplementing certain articles of Decree No. 24/2000/ND-CP;

Pursuant to Decree No. 164/2003/ND-CP dated December 22, 2003 of the Government detailing the implementation of the Law on Corporate Income Tax and Decree No. 152/2004/ND-CP dated August 6, 2004 of the Government amending and supplementing certain articles of Decree No. 164/2003/ND-CP; Decree No. 149/2003/ND-CP dated December 4, 2003 of the Government detailing the implementation of the Special Consumption Tax Law and the Law Amending and Supplementing Certain Articles of the Special Consumption Tax Law; Decree No. 158/2003/ND-CP dated December 10, 2003 of the Government detailing the implementation of the Value Added Tax Law and the Law Amending and Supplementing Certain Articles of the Value Added Tax Law and Decree No. 148/2004/ND-CP dated July 23, 2004 of the Government amending and supplementing certain articles of Decree No. 158/2003/ND-CP;

Pursuant to Decree No. 129/2004/ND-CP dated May 31, 2004 of the Government detailing and guiding the implementation of certain articles of the Accounting Law applicable to business operations;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 32/2003/QD-TTg dated February 27, 2003 of the Prime Minister promulgating the Regulations on the operation of prize-based electronic games for foreigners;

To implement the directive of the Prime Minister in Circular No. 5852/VPCP-QHQT dated October 27, 2004 of the Government Office regarding the issuance of Financial Management Regulations for the operation of prize-based game businesses;

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

 

DECISION:

Clause 4 of Article 6The Financial Management Regulations for the operation of prize-based game businesses are hereby issued along with this Decision.

Article 2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette. The Director of the Department of Foreign Finance, Heads of units under the Ministry of Finance, Directors of Provincial Departments of Finance, and Heads of Provincial Tax Bureaus directly under the Central Government within their respective functions and authorities shall be responsible for implementing and organizing the implementation of this Decision. Business establishments and representatives of parties participating in permitted joint venture business operations shall be responsible for implementing this Decision.

 

REGULATIONS

 

Financial management for the operation of prize-based game businesses

(Issued together with Decision No. 91/2005/QD-BTC dated December 8, 2005)

of the Minister of Finance)

PART I

GENERAL PROVISIONS

Article 1. Scope and objects regulated

Article 1. These regulations apply to all prize-based game business operations.

Article 2. Business establishments engaged in prize-based game business operations shall be subject to these regulations and shall be responsible before Vietnamese law for their prize-based game business activities.

Article 2. Interpretation of Terms

In these regulations, the following terms shall be understood as follows:

Point 1. "Prize-based game" refers to the act of a player using money or agreed-upon tokens to play through prize-based game machines with the aim of obtaining a certain amount of prize money at predetermined odds.

a) "Prize-based electronic game" is a prize-based game where throughout the playing process, the player only directly plays with prize-based electronic game machines, and employees at the prize-based entertainment venue are not allowed to intervene or participate in any form during the player's playing process.

b) "Other prize-based games" are prize-based games where during the playing process, employees working at the prize-based entertainment venue perform certain service tasks for players, such as dealing cards, distributing and collecting chips from customers at prize-based game machines.

Point 2. "Agreed-upon tokens" are chips, intermediate chips, and tokens produced according to common technical standards solely for use in prize-based game business operations that can be exchanged for cash. Intermediate chips can only be exchanged for cash through regular chips. Each chip and intermediate chip bears the value of a specific unit of currency, while tokens may or may not bear a value but their value is converted according to the rules set by the business establishment.

Point 3. "Prize-based game machine" is a specialized device designed for the purpose of playing a game of chance or a game based on skill or a combination of chance and skill.

a) "Prize-based electronic game machine" is a prize-based game machine used for prize-based electronic games, in which the payout ratio and automatic payout system are pre-set in the machine.

b) "Other prize-based game machine" is a prize-based game machine that does not fall under the types of machines specified in Point a Clause 3 of this Article.

Point 4. "Payout ratio" is the ratio of the amount of money a player can obtain compared to the amount of money bet when playing prize-based games according to the Rules of the Game approved by the Ministry of Finance.

Point 5. "Prize-based entertainment venue" is a designated area registered with competent state agencies for the organization of prize-based game business operations by business establishments.

Chapter II

INCOME, EXPENSES AND REVENUE

OF PRIZE-BASED GAME BUSINESS OPERATIONS

Article 3. Revenue

The revenue from operating prize games is the amount of money received (excluding value-added tax) exchanged for customers before playing at the exchange counter or gaming machine, minus the amount refunded to customers and is determined as follows:

1. For the operation of prize electronic games

a) For prize electronic game machines where players must insert pre-agreed coins or cash directly into the machine to play: Revenue is the total amount of money obtained when opening the bag.

b) For other prize electronic game machines: Revenue is the total amount of money received from customers as determined by the receipt issued at the cashier counter, which is equal to the total amount of money received from customers according to the exchange receipt minus the amount refunded to customers due to winning or incomplete play.

2. For other prize game operations

a) The revenue of other prize games is determined daily at the gaming machines.

b) Businesses must monitor the revenue of other prize games at the counter for verification when determining revenue.

Article 4. Expenses

Reasonable expenses for operating prize games are all costs serving the operation of prize games as determined according to current laws on Corporate Income Tax.

Article 5. Income

The income from operating prize games is calculated by subtracting (-) reasonable expenses serving the operation of prize games, as specified in Article 4 of this Regulation, from the revenue as stipulated in Article 3 of this Regulation.

Article 6. Accounting for businesses implementing turnover-based taxation

Businesses permitted to operate prize games that implement turnover-based taxation for value-added tax, special consumption tax, and corporate income tax as prescribed in Article 8 of this Regulation must separately account for revenue, expenses, and income from operating prize games.

Chapter III

REGARDING TAXES FOR PRIZE GAME OPERATIONS

Article 7. Taxes

1. Corporate Income Tax: The corporate income tax rate applicable to businesses operating prize games is 28%, with no exemptions or reductions. In cases where businesses have been granted Investment Licenses or Business Registration Certificates for operating prize games prior to the effective date of this Regulation, they shall comply with the specific provisions set forth in their Investment License or Business Registration Certificate.

2. Other types of taxes: Shall be implemented according to current tax laws.

Article 8. Tax Payment Methods

1. Businesses operating prize electronic games shall pay value-added tax, special consumption tax, and corporate income tax based on a turnover system.

a) The turnover tax rate is determined based on the number and type of machines currently being used by the business for operations as stipulated in the attached Appendix. The turnover tax rates specified in the Turnover Tax Framework of this Appendix will be adjusted after two (02) years, with adjustments depending on the operational situation of prize electronic games and changes in tax policy.

b) Based on the Turnover Tax Framework stipulated in the Appendix and the specific business conditions of the enterprise, the Provincial or Central City Tax Department will determine the specific turnover tax rate for each business and in detail for each type of tax. The turnover tax rate will be applied consistently over a period of two (02) years.

Based on the annual turnover tax rate, the business determines the specific monthly payment amount by dividing the annual turnover tax rate by twelve (12) months and pays the tax for each month before the fifth day of the following month.

2. Businesses operating prize games not covered under Paragraph 1 of this Article shall pay taxes according to current laws; in cases where the Ministry of Finance decides to allow turnover-based taxation, they shall pay taxes according to the specific method and turnover tax rate stipulated in such Decision.

Chapter IV

ACCOUNTING ORGANIZATION AND RECORD-KEEPING

Article 9. Accounting System

Business establishments engaged in operating games of chance shall organize and implement accounting and auditing activities in accordance with Vietnamese accounting laws.

Article 10. Implementation of Accounting Work

Business establishments engaged in operating games of chance must organize and implement accounting work according to the current accounting system. They must establish and review accounting vouchers systems, build accounting account systems applicable at their units to ensure compliance with current regulations and meet management and economic financial information provision requirements for business establishments, including specific invoice and voucher models for operating games of chance activities. Among these invoices, the mandatory ones include: Chip issuance receipt (coin), Chip collection receipt (coin), Customer money exchange invoice, Revenue summary report, Cashier settlement report as stipulated in Model Nos. 01, 02, 03, 04, 05 attached hereto.

Article 11. Contents and Requirements for Accounting Work

Business establishments engaged in operating games of chance must carry out accounting work according to the contents and requirements of current accounting laws.

Chapter V

RESPONSIBILITIES OF ENTERPRISES

Article 12. Registration of Prescribed Currency

Business establishments engaged in operating games of chance must register samples of prescribed currency with the Department of Finance and Provincial Tax Office under the central government.

Article 13. Management of Money and/or Prescribed Currency

Business establishments engaged in operating games of chance must arrange dedicated boxes (bags) to store collected money and/or prescribed currency. These boxes (bags) must be sealed before being taken out of the chip, coin warehouse and immediately after being removed from gaming machines. The opening of these seals must be carried out at a specified time according to the business establishment's regulations under the supervision of the Supervisory Board as stipulated in Article 14 of this Regulation.

Article 14. Supervision of Operating Games of Chance Activities

1. The entire process of operating games of chance is supervised by the Supervisory Board of Entertainment and Recreation Facilities (hereinafter referred to as the Supervisory Board). Entertainment and Recreation Facilities must be equipped with monitoring and recording devices to continuously observe (24/24 hours) game of chance operating activities.

2. Business establishments permitted to operate games of chance must establish a Supervisory Board and clearly define its functions, tasks, and authorities to perform daily inspection and supervision duties regarding compliance with this Regulation, Game Rules, operational procedures, and business outcomes. In cases where business establishments operate through joint ventures or cooperation contracts, the Supervisory Board must include representatives from both the Vietnamese side and the foreign side.

3. Business establishments must notify the local tax authority of the list of Supervisory Board members and have the responsibility to provide relevant information on the supervision of game of chance operating activities to the local tax authority upon request.

Chapter VI

CONDITIONS FOR OPERATING GAMES OF CHANCE

Article 15. Confirmation of Eligibility for Operating Games of Chance

Only business establishments confirmed by the Ministry of Finance to meet the conditions for operating games of chance as stipulated in Article 17 of this Regulation may be allowed to engage in operating games of chance activities.

Article 16. Documents for Application to Confirm Compliance with Conditions for Operating Prize Games

- Application for confirmation of compliance with conditions for operating prize games;

- Investment License or Business Registration Certificate for operating prize games;

- Documentation proving the completion of major investment items as specified in the Investment License or Business Registration Certificate and the Entertainment Zone;

- Rules of the prize game established by the business, specifying in detail the scale and types of gaming machines, the control system for gaming machines, the organization method for each game, the payout ratio and method, chips (tokens), the circulation and management process of chips (tokens), types of invoices and vouchers, chip and token samples, the value of each token, chip (token) containers.

Article 17. Confirmation of Compliance with Conditions for Operating Prize Games

1. Within fifteen working days from the date of receipt of complete documents for application to confirm compliance with conditions for operating prize games as stipulated in Article 16 of this Regulation, the Ministry of Finance will examine and confirm compliance with conditions for operating prize games for the business or notify the business if it does not meet the conditions for operating prize games.

2. The confirmation of compliance with conditions for operating prize games by the Ministry of Finance shall serve as the basis for the business to arrange the number and types of gaming machines, organize business operations, and fulfill tax obligations.

3. When the business needs to change the scale and types of machines, it must adjust the Rules of the prize game and apply for confirmation of compliance with conditions for operating prize games as prescribed in Article 16 of this Regulation.

4. Businesses that have been granted an Investment License or Business Registration Certificate by the competent authority and have commenced operating prize games must submit their documents to the Ministry of Finance within forty-five days from the effective date of this Decision to obtain confirmation of compliance with conditions for operating prize games.

Chapter VII

INSPECTION AND VIOLATION HANDLING

Article 18. Financial Inspection

The Ministry of Finance shall conduct financial inspections on the business operations of prize games.

Financial inspections shall be conducted annually at most once, except in cases of spot checks. The inspection time and participating members shall be decided by the Minister of Finance.

Article 19. Violations by Businesses Engaging in Prize Game Operations

1. Violating this Regulation and the Rules of the prize game approved by the Ministry of Finance.

2. Violating current laws and regulations on taxation and finance.

Article 20. Handling Violations

Businesses engaging in prize game operations that violate the provisions of Article 19 of this Regulation, in addition to being subject to penalties under current laws, shall be handled as follows:

1. Suspension of prize game operations for a period of three months to one year and notification to the issuing authority of the Investment License or Business Registration Certificate.

2. Revocation of confirmation of compliance with conditions for operating prize games and notification to the issuing authority of the Investment License or Business Registration Certificate when the business reoffends.

Chapter VIII

IMPLEMENTATION

Article 21. Organization of Implementation

Businesses permitted to operate prize games must comply fully with the provisions of this Regulation. Any difficulties encountered during implementation should be reported to the Ministry of Finance for guidance and resolution./.