Circular No. 96/2006/TT-BTC dated October 16, 2006 of the Ministry of Finance guiding the rates and the regime of collection, remittance, management and use of auction charge

CIRCULAR

GUIDING THE RATES AND THE REGIME OF COLLECTION, REMITTANCE, MANAGEMENT AND USE OF AUCTION CHARGE

Pursuant to the Government’s Decree No. 57/2002/ND-CP of June 3, 2002, detailing the implementation of the Ordinance on Charges and Fees;

Pursuant to the Government’s Decree No. 24/2006/ND-CP of March 6, 2006, amending and supplementing a number of articles of the Government’s Decree No. 57/2002/ND-CP of June 3, 2002, detailing the implementation of the Ordinance on Charges and Fees;

Pursuant to the Government’s Decree No. 05/2005/ND-CP of January 18, 2005, on property auction;

Pursuant to the Prime Minister’s Decision No. 216/2005/QD-TTg of August 31, 2005, promulgating the Regulation on auction of land-use rights for land allocation with the collection of land-use levies or for land lease;

Pursuant to the Prime Minister’s Directive No. 18/2006/CT-TTg of May 15, 2006, on further implementing the Government’s Decree No. 05/2005/ND-CP of January 18, 2005, on property auction;

The Ministry of Finance guides the auction charge rates and the regime of collection, remittance, management and use of auction charge as follows:

I. SCOPE OF APPLICATION

1. Auction charge guided in this Circular apply to property auction under the Government’s Decree No. 05/2005/ND-CP of January 18, 2005, on property auction (referred to as Decree No. 05/2005/ND-CP for short) and to the auction of land use rights for land allocation with collection of land use levy or for land lease under the Prime Minister’s Decision No. 216/2005/QD-TTg of August 31, 2005, promulgating the Regulation on auction of land use rights for land allocation with collection of land use levy or for land lease (referred to as Decision No. 216/2005/QD-TTg).

2. Auction charge payers are property-auctioning persons (property owners or persons authorized by owners to sell the property or individuals and organizations having the rights to sell other persons’ property in accordance with law) and participants in property auctions.

3. Units permitted to collect auction charges as prescribed in this Circular, including: property auction enterprises, non-business units with the function of conducting property auction and property auction councils (collectively referred to as charge-collecting units).

II. AUCTION CHARGE RATES

1. Auction charge rates applied by charge-collecting units of central agencies

a/ For property auction under Decree No. 05/2005/ND-CP

a.1. Auction charge rates applicable to the property-auctioning persons:

- In case of successful auctions, the charge rates are calculated based on the value of the sold property as follows

 - In case of unsuccessful auctions, the property-auctioning persons shall pay the property auction units the expenses defined in Clause 2, Article 2 of the Government’s Decree No. 05/2005/ND-CP of January 18, 2005, on property auction.

a.2. Auction charges applicable to auction participants

- When the property auction can not be organized, participants shall be refunded the whole property auction charges they have paid.

b/ For the auction of land use rights for land allocation with collection of land use levy or for land lease under Decision No. 216/2005/QD-TTg

The auction charge rates applicable to auction participants are commensurate with the reserve prices of land use rights or to the area of to-be-auctioned land lots as follows:

b.1. For the auction of land use rights for investment in the construction of dwelling houses of households or individuals specified at Point a, Clause 1, Article 3 of the Regulation on auction of land use rights for land allocation with collection of land use levy or for land lease, issued together with Decision No. 216/2005/QD-TTg

b.2. For the auction of land use rights other than land use rights defined at Point a, Clause 1, Article 3 of the Regulation on auction of land use rights for land allocation with collection of land use levy or for land lease, issued together with Decision No. 216/2005/QD-TTg

2. Auction charge rates to be applied at charge-collecting units of local agencies

Based on the characteristics and practical conditions of their localities, provincial/municipal People’s Councils shall decide on the specific auction charge rates applicable to each payer, each level of sold property value, each level of reserve price of to-be-auctioned property or to-be-auctioned land use rights or land lots which, however, must not exceed the rates specified in Clause 1 of this Section.

3. The auction charge rates defined in Clause 1 and Clause 2 of this Section shall apply uniformly to auction charges belonging and belonging to the state budget. For auction charges not belonging to the state budget, the charge rates (uniformly applied) are inclusive of value added tax in accordance with the Law on Value Added Tax and guiding documents.

III. THE REGIME OF COLLECTION, PAYMENT, MANAGEMENT AND USE OF AUCTION CHARGE

1. Collection and payment of auction charge

a/ Auction participants shall pay auction charge upon registration for auction participation according to regulations.

b/ Property-auctioning persons shall pay auction charge upon receipt of  proceeds from the sale of their property.

c/ When collecting charges, charge-collecting units shall make out and hand over receipts  to charge payers as follows:

- Charge-collecting units which are property auction enterprises shall make out and hand over invoices to charge payers in accordance with the Finance Ministry’s current regulations on issuance, management and use of invoices.

- Charge-collecting units which are non-business units with the function of conducting property auctions or are property auction councils shall make out and hand over receipts to charge payers in accordance with the Finance Ministry’s current regulations on issuance, management and use of tax forms.

2. Management and use of auction charges

Auction charge is collected to cover expenses for the organization of auctions and the collection of charges (such as expenses for posting and publicizing auction information, expenses for organizing the registration for the purchase of to-be-auctioned properties, expenses for dossiers for participation in auctions, expenses for display and show of property, expenses for holding auctions and expenses for delivery of property). The collected auction charge amounts are managed and used as follows:

a/ For charge-collecting units which are non-business units with the function of conducting property auction or are property auction councils: The collected auction charge amounts are state budget revenues and are managed and used as follows:

- When charge-collecting units are allocated funds from the state budget for the organization of auctions, they shall remit the whole collected charge amounts into the state budget according to the corresponding chapter, category, clause, section and sub-section of the current state budget index.

- When charge-collecting units are not allocated funds from the state budget for the organization of auctions, they may use the whole collected charge amounts (100%) to cover expenses for the organization of auctions and the collection of charges in accordance with current regulations.

Based on the auction charge rates applied in their localities and the operation of local business units with the function of conducting property auction or local property auctions councils, provincial/municipal People’s Councils shall decide on the percentage of the collected auction charge amounts which charge-collecting units may retain to cover expenses for the organization of the auctions and the collection of charges.

b/ For charge-collecting units which are property auction enterprises: The collected auction charges are not state budget revenues but they are turnover of charge-collecting units. Charge-collecting units are obliged to pay taxes on the collected charge amounts in accordance with law and, after paying taxes, are allowed to manage and use the collected charge amounts in accordance with law. Annually, charge-collecting units shall make tax finalization for the collected charge amounts with tax authorities in accordance with current tax laws.

c/ For the case of auction of land use rights for land allocation with collection of land use levy or for land lease under Decision No. 216/2005/QD-TTg, if the amounts collected from auction participants are not enough to cover expenses for the organization of the auction, the state budget will support the deficit amounts on the principles:

- Support money will be ensured by the budget of the level to which the value of the to-be-auctioned land use rights belongs (regardless of successful or unsuccessful auction);

- Support amounts are the differences between the actual, reasonable expenses for the auction (with lawful invoices and vouchers) and the charge amounts collected from auction participants, which, however, must not exceed the auction charge amount collected at the charge rates defined at Point a.1, Clause 1, Section II of this Circular.

IV. ORGANIZATION OF IMPLEMENTATION

1. This Circular takes effect 15 days after its publication in “CONG BAO.”

2. Other contents related to the charge collection, remittance, management and use of charge and the publicization of charge collection regimes not covered in this Circular shall comply with the guidance in the Finance Ministry’s Circular No. 63/2002/TT-BTC of July 24, 2002, guiding the implementation of legal provisions on charges and fees and Circular No. 45/2006/TT-BTC of May 25, 2006, amending and supplementing Circular No. 63/2002/TT-BTC.

3. For localities which have issued documents on the collection of auction charges which are incompliant with this Circular, provincial/municipal People’s Committees shall propose People’s Councils of the same level to promulgate new documents in compliance with this Circular.

4. Any problems arising the course of implementation should be reported to the Ministry of Finance for study and additional guidance.