Circular No. 29/2001/TT-BTC dated May 08, 2001 oh the Ministry of Finance guiding a number of financial mechanisms applicable in Duong Dong township, Phu Quoc district, Kien Giang province

CIRCULAR

GUIDING A NUMBER OF FINANCIAL MECHANISMS APPLICABLE IN DUONG DONG TOWNSHIP, PHU QUOC DISTRICT, KIEN GIANG PROVINCE

Pursuant to the Governments Decree No.178/CP of October 28, 1994 defining the tasks, powers and organizational structure of the Finance Ministry;

Pursuant to the Prime Ministers Decision No.97/2000/QD-TTg of August 16, 2000 on the application of a number of mechanisms and policies in Duong Dong township, Phu Quoc district, Kien Giang province;

The Finance Ministry hereby guides the implementation of financial regime applicable in Duong Dong township, Phu Quoc district, Kien Giang province as follows:

I. SUBJECTS OF APPLICATION

Vietnamese and foreign investors investing in production and/or business development as well as infrastructure construction in Duong Dong township (excluding Phu Quoc airport), Phu Quoc district, Kien Giang province, shall be subject to this Circular, including:

1. Vietnamese enterprises, irrespective of their ownership forms: limited liability companies; stock companies; partnerships; private enterprises; cooperatives and union of cooperatives; State enterprises;

2. Foreign-invested enterprises and parties to business cooperation contracts under the Law on Foreign Investment in Vietnam; foreign organizations and individuals doing business in Vietnam under investment forms other than those provided for in the Law on Foreign Investment in Vietnam;

3. Private, people-founded and semi-public education and training establishments; private and people-founded medical establishments; cultural establishments lawfully set up and operating according to law provisions;

4. Enterprises of political organizations, socio-political organizations, social organizations, socio-professional organizations and people’s armed forces, which have registered their business according to law provisions;

5. Business individuals and groups set up and operating under Decree No. 66/HDBT of March 2, 1992 of the Council of Ministers (now the Government);

6. Investors being overseas economic and financial organizations; economic organizations having investment capital in Vietnam; Vietnamese citizens and overseas Vietnamese; foreigners residing in Vietnam or overseas, who buy equities of or contribute capital to, enterprises in Duong Dong township.

II. GUIDANCE ON TAX PREFERENCES AND BUDGET REMITTANCES

1. Investment projects on tourist business in Duong Dong township shall enjoy investment preferences as prescribed in List A of the Appendix to the Government’s Decree No. 51/1999/ND-CP of July 8, 1999. Investment projects on tourist business, formulated before September 1, 2000 shall only be entitled to investment preferences under the Government’s Decree No. 51/1999/ND-CP of July 8, 1999 for their remaining duration. The order and procedures for entitlement to investment preferences shall comply with current regulations.

2. In addition to the preferential policies provided for in the Law on Foreign Investment in Vietnam, the Government’s Decree No. 24/2000/ND-CP of July 31, 2000 detailing the implementation of the Law on Foreign Investment in Vietnam; the Domestic Investment Promotion Law (amended) and the Government’s Decree No. 51/1999/ND-CP of July 8, 1999 detailing the implementation of the Domestic Investment Promotion Law (amended), investment projects in Duong Dong township (including investment projects on tourist business mentioned at Point 1 above) shall also enjoy the following preferences:

a/ The 50% reduction of land, water surface and sea surface rents, as compared to the States current rent bracket applicable in Phu Quoc district.

b/ The export tax rate of 0% for goods produced in Duong Dong township, when they are exported.

Export goods produced in Duong Dong township, which are subject to the export tax rate of 1% or higher in the export tariff, may enjoy the export tax rate of 0% if meeting the following conditions:

They are produced in Duong Dong township and exported by economic organizations directly or via entrusted export. In addition to the export goods dossiers prescribed by the Export and Import Tax Law, the organizations which export goods or undertake the entrusted goods export shall also have to produce to the customs offices vouchers for use as basis to prove that the goods are produced in Duong Dong township, including: sale invoices of production establishments in Duong Dong township or lists of goods enclosed with goods purchase contracts of those producers in Duong Dong township that have no sale invoices; lists of export goods subject to the export tax rate of 1% or higher in the export tariff, which are entitled to the export tax rate of 0% under the guidance in this Circular. The directors of the organizations which export goods or undertake the entrusted export shall sign the lists made by their respective organizations and be held responsible before law for the lists’ accuracy and reliability.

c/ Foreign investors and overseas Vietnamese investing in Duong Dong township under the Law on Foreign Investment in Vietnam shall, when transferring their incomes abroad, pay tax for the income amounts transferred abroad at the tax rate of 3%.

d/ Foreign organizations and individuals doing business in Duong Dong township not under the Law on Foreign Investment in Vietnam; investors being overseas economic and financial organizations and foreign economic organizations having investment capital in Vietnam, foreigners residing in Vietnam or in foreign countries as well as overseas Vietnamese that buy equities of Vietnamese enterprises in Duong Dong township shall, when transferring their incomes abroad, pay tax for the income amounts transferred abroad at the tax rate of 5%.

3. Other taxes and budget remittances shall comply with current regulations.

III. GUIDANCE ON THE MANAGEMENT OF STATE BUDGET’S INVESTMENT CAPITAL FOR TECHNICAL INFRASTRUCTURE AND SOCIAL INFRASTRUCTURE DEVELOPMENT PROJECTS IN DUONG DONG TOWNSHIP

1. Making estimates of investment capital for Duong Dong township:

Annually, based on the estimate of State budget revenues in Phu Quoc district as assigned by the Peoples Committee of Kien Giang province in its annual budget estimate (excluding the revenue entries not assigned for State budget balancing such as the tuition fees, hospital fees, aids, peoples contributions...), the Peoples Committee of Kien Giang province shall propose to the Finance Ministry a specific investment capital level for Duong Dong township.

At the proposal of the Peoples Committee of Kien Giang province, the Finance Ministry shall consider and determine the total amount of State budget capital to be invested in Duong Dong township within the central budget’s spending task, then notify such and the Government-assigned annual budget estimate to the province.

On the basis of the notified capital amount and planning of Duong Dong township, the provincial Peoples Committee shall decide on a detailed list of the to be-invested infrastructure projects and corresponding capital levels therefor according to its assigned responsibility for investment capital and in conformity with the approved annual planning and plans, then register such list with the Ministry of Planning and Investment and the Finance Ministry for capital allocation and monitoring of implementation.

2. Mode of management, allocation, reporting on and settlement of, investment capital for Duong Dong township:

The Finance Ministry shall effect the targeted allocation of investment capital from revenues in Phu Quoc district to Kien Giang province through the provincial Finance- Pricing Service for investment in Duong Dong township.

In principle, the capital amount to be reinvested in Duong Dong township must be based on the annual actual revenues of the State budget in Phu Quoc district. However, to ease the control thereof, the capital allocation process shall be based on the notified estimates. The actual revenue increase or decrease against the estimates shall be adjusted into the following year’s estimates.

Based on the yearly investment capital estimates already approved for Duong Dong township and the locality’s proposal on schedule for the implementation volume of capital construction of investment projects, the Finance Ministry shall advance or allocate capital for settlement through the budget of Kien Giang province.

The capital amount allocated by the central budget to Duong Dong township shall be used only for infrastructure construction in Duong Dong township according to its overall planning already approved by the competent authority. In the course of implementation, the locality may take initiative in adjusting investment capital levels among projects of groups B and C within the ratified total capital amount. Any change in the list of projects must be registered with the Ministry of Planning and Investment and the Finance Ministry.

Quarterly, the provincial People’s Committee shall have to report to the Finance Ministry and the Ministry of Planning and Investment on the situation of construction investment and capital allocation for each project and submit year-end report on the whole year’s implementation results to the Prime Minister (concurrently to the Finance Ministry and the Ministry of Planning and Investment).

The projects’ investment capital shall annually be accounted in the local budget, which, however, should be separated for investment projects in Duong Dong township.

The management, allocation and settlement of investment capital for each investment project in Duong Dong township must strictly comply with the State’s current regulations on capital construction management.

IV. ORGANIZATION OF IMPLEMENTATION

This Circular takes effect as from the date of its signing and the financial preferences shall apply as from September 1, 2000. In cases where subjects entitled to tax preferences under the guidance in this Circular fail to separately account the exempted or reduced tax amounts according to the preferential levels or have already completed tax settlement for 2000, the tax recalculation shall not be allowed. All the earlier regulations on financial and tax regimes applicable to subjects specified in this Circular, which are contrary to this Circular, are hereby annulled.