Decision No. 91/2005/QD-BTC dated December 08, 2005 of the Ministry of Finance issuing regulations on financial management of business activities of games with prizes

DECISION

ISSUING REGULATIONS ON FINANCIAL MANAGEMENT OF BUSINESS ACTIVITIES OF GAMES WITH PRIZES

THE MINISTER OF FINANCE

Pursuant to Decree 24/2000/ND-CP of the Government dated 31 July 2000 on implementation of the Law on Foreign Investment in Vietnam and Decree 27/2003/ND-CP of the Government dated 19 March 2003 amending Decree 24 above;

Pursuant to Decree 164/2003/ND-CP of the Government dated 22 December 2003 on implementation of the Law on Corporate Income Tax and Decree 152/2004/ND-CP of the Government dated 6 August 2004 amending Decree 164 above; Decree 149/2003/ND-CP of the Government dated 4 December 2003 on implementation of the Law on Special Sales Tax (as amended); Decree 158/2003/ND-CP of the Government dated 10 December 2003 on implementation of the Law on Value Added Tax (as amended); and Decree 148/2004/ND-CP of the Government dated 23 July 2004 amending Decree 158 above;

Pursuant to Decree 129/2004/ND-CP of the Government dated 31 May 2004 on implementation of the Law/on Accounting;

Pursuant to Decree 77/2003/ND-CP of the Government dated 1 July 2003 on the functions, duties, powers and organizational structure of the Ministry of Finance;

Pursuant to Decision 32/2003/QD-TTg of the Prime Minister of the Government dated 27 February 2003 issuing regulations on conducting business of electronic games with prizes for foreigners;

In implementation of Official Letter 5852/VPCP-QHQT of the Prime Minister of the Government dated 27 October 2004 regarding issuing regulations on financial management of business activities of games with prizes;

On the proposal of the Director of the Department for External Finance;

DECIDES:

Article 1. To issue with this Decision the Regulations on financial management of business activities of games with prizes.

Article 2. This Decision shall be of full force and effect fifteen (15) days after the date of its publication in the Official Gazette. The Director of the Department for External Finance, heads of units under the Ministry of Finance, Directors of Departments of Finance and Directors of Tax Divisions of provinces and cities under central authority shall, within the scope of their respective duties and powers, be responsible for organizing implementation of this Decision. Business establishments and representatives of parties to business co- operation contracts which are permitted to conduct business activities of games with prizes shall also be responsible for implementation of this Decision.

REGULATIONS

ON FINANCIAL MANAGEMENT OF BUSINESS ACTIVITIES OF GAMES WITH PRIZES
(Issued with Decision 91/2005/QD-BTC of the Minister of Finance dated 8 December 2005, as amended by Decision 84/2007/QD-BTC of the Minister of Finance dated 17 October 2007)

Chapter I

GENERAL PROVISIONS

Article 1. Governing scope and applicable entities

1. These Regulations apply to business activities of games with prizes.

2. Establishments conducting the business of electronic games with prizes shall be subject to these Regulations and shall be legally liable for their business activities.

Article 2. Interpretation of terms

In these Regulations, the following terms shall be construed as follows:

1. Games with prizes mean games in which players use real money or conventional money to play games on prize games machines designed to pay monetary prizes at a fixed ratio.

(a) Electronic games with prizes means the type of games with prizes in which the player directly plays the electronic prize games machine throughout the entire playing process and staff of the amusement and entertainment location are not permitted to intervene or participate in any form in such playing process.

(b) Other games with prizes means the type of games with prizes in which staff of the amusement and entertainment location provide a number of services for the player throughout the playing process such as dealing cards, or issuing and collecting chips from customers who are playing the prize games machines.

2. Conventional money means metal chips, intermediary metal chips and metal tokens which are manufactured in accordance with general technical specifications and which are only used in business activities of games with prizes, and which may be changed for cash. An intermediary metal chip is a type of chip which may only be changed for cash via a metal chip. Each metal chip and intermediary metal chip has a specific monetary value recorded on its face, while a metal token may or may not have its value recorded on its face but must be convertible in accordance with the Rules of the business establishment.

3. Prize games machine means a type of specialized apparatus designed for the purpose of playing games which depend on pure chance or which depend on skill, or games which depend on a combination of pure chance and skill.

(a) Prize games electronic machine means a type of prize games machine used for electronic games, in which the prize payment ratio and an electronic system for paying prizes is automatically built into the machine.

(b) Other prize games machine means a machine for playing games with prizes, other than the type of machine stipulated in sub-clause (a) above.

4. Prize payment ratio means the amount of prize money which a player may win compared to the amount of money paid out by the player in order to play the game, in accordance with Games Rules approved by the Ministry of Finance.

5. Amusement and entertainment location with prizes means a separate area which is specified and registered with the competent State authority for use by a business establishment to hold activities being games with prizes.

Chapter II

TURNOVER, EXPENSES AND INCOME FROM BUSINESS ACTIVITIES OF GAMES WITH PRIZES

Article 3. Turnover

Turnover from a business activity of games with prizes means the amount of money collectible (excluding value added tax) as a result of changing money for customers at a money changing counter or at a machine prior to customers playing games, less the amount of money refunded to customers, and determined as follows:

1. Applicable to business activities of electronic games with prizes:

(a) In the case of prize games electronic machines for which the player must put real money or conventional money into the machine in order to play the game, turnover shall be the total money received when opening the money box inside the machine.

(b) Applicable to other prize games machines:

Turnover shall be the total money collectible from customers and determined in accordance with the invoices for receipt of money at money changing counters, namely the total amount of money collectible from customers in accordance with the invoices for changing customers' money less the amount of money won by customers or refunded to customers who had not used up all their tokens.

2. Applicable to business activities of other games with prizes:

(a) Turnover on other games with prizes shall be determined on a daily basis by reading the prize games machines.

(b) Business establishments must monitor turnover on other games with prizes by checking readings of machines at their cashing counters.

Article 4. Expenses

Reasonable expenses of a business activity of games with prizes means the total expenses servicing such business activity and determined in accordance with current regulations on corporate income tax.

Article 5. Income

Income from a business activity of games with prizes means turnover as stipulated in article 3 of these Regulations less reasonable expenses servicing the business activity as stipulated in article 4 of these Regulations.

Article 6. Accounting applicable to establishments conducting the business of electronic games with prizes

Business establishments permitted to conduct the business of electronic games with prizes must conduct separate accounting for turnover, expenses and income for that part of their business operation being electronic games with prizes.

Chapter III

TAXES ON BUSINESS ACTIVITIES OF GAMES WITH PRIZES

Article 7. Taxes

1. The corporate income tax rate applicable to business activities of games with prizes is twenty-eight (28) per cent, without reduction or exemption. If any business establishment was issued with an investment licence or a business registration certificate for games with prizes prior to the effective date of these Regulations, then corporate income tax shall be applied in accordance with the specific provisions set out in such licence or certificate.

2. Other types of taxes shall be applicable in accordance with current regulations.

Article 8. Method of paying taxes

1. Establishments conducting the business of games with prizes must pay value added tax, special sales tax, corporate income tax and other types of tax stipulated by the current regulations.

2. Establishments conducting the business of games with prizes which currently pay tax pursuant to a specific decision of the Minister of Finance shall continue to pay tax by that method in accordance with such decision.

Chapter IV

CONDUCTING ACCOUNTING

Article 9. Accounting regime

Establishments conducting the business of games with prizes shall carry out accounting and auditing work in accordance with the Vietnamese law on accounting.

Article 10. Organization of accounting work

Establishments conducting the business of games with prizes must organize accounting work in accordance with the current accounting regime by formulating and inspecting a system of accounting source documents, and by formulating a chart of accounts applicable to their units which ensures compliance with current regulations, satisfies management requirements, and provides financial and economic information about the establishment on all the standard forms for invoices and accounting source documents reserved for the business of games with prizes, including the following invoices which shall be compulsory:

- Coupon for handing out chips and tokens;

- Coupon for handing in chips and tokens;

- Receipt for changing money for customers;

- Acknowledgement of total turnover; and

- Finalization of receipts and disbursements at cashing counters, on the standard forms in Appendix 1 to 5 attached to these Regulations.

Article 11. Contents and requirements of accounting work

Establishments conducting the business of games with prizes must conduct accounting work in accordance with the contents and requirements stipulated in current regulations.

Chapter V

RESPONSIBILITIES OF ENTERPRISES

Article 12. Registration of conventional money

Establishments conducting the business of games with prizes must register a sample of their conventional money with the Department of Finance and the Tax Division in their province or city under central authority.

Article 13. Management of real and/or conventional money

Establishments conducting the business of games with prizes must have specialized money boxes for holding real and/or conventional money which is collected, and these boxes must be sealed before being brought out of the chips and tokens store and also sealed immediately after they are taken out of the prize games machines. The sealed boxes must be opened at times specified in the Rules of the business establishment under the supervision of the Supervisory Board stipulated in article 14 of these Regulations.

Article 14. Supervision of business activities of games with prizes

1. The entire process of the business activity of games with prizes must be supervised by the Supervisory Board of the amusement and entertainment location. All amusement and entertainment locations must have regular monitoring and image recording facilities (24 hours per day) for the business activity of games with prizes.

2. Any establishment permitted to conduct the business of games with prizes must establish a Supervisory Board and issue specific Rules on its functions, duties and powers in order for such Supervisory Board to conduct daily checks and supervision of compliance with these Regulations, the Games Rules, [other] professional Rules and of results of the business activity. The Supervisory Board must include a representative of the Vietnamese party and a representative of the foreign party in the case of a joint venture establishment or a business co-operation contract.

3. The business establishment must notify the list of members of the Supervisory Board to the local tax office, and must provide information on supervision of the business activity of games with prizes to the local tax office on request.

Chapter VI

CONDITIONS IN ORDER TO CONDUCT THE BUSINESS OF GAMES WITH PRIZES

Article 15. Conditions in order to conduct the business of games with prizes

A business establishment shall only be permitted to procure prize games machines and to organize business of electronic games with prizes when it satisfies all the following conditions:

(a) The authorized body has already granted the business establishment an investment licence, investment certificate or business registration certificate for games with prizes.

(b) The establishment has completed the main items of investment project works stipulated in its investment licence, investment certificate or business registration certificate and it has completed the items of [project] works for the amusement and entertainment location with prizes.

(c) The establishment has formulated its Games Rules which contain specific provisions on the scale [number] and type of prize games machines, on the machine control system, on the method of playing each game, on the prize payment ratio and the method of paying prizes, on all types of invoices and accounting source documents, and on the samples and value of conventional money and on the objects used to contain the conventional money [i.e. money boxes].

Article 16. Number and type of prize games machines, and conditions in order to operate such machines

1. Applicable to establishments conducting the business of electronic games with prizes:

(a) Business establishments shall only be permitted to arrange to have the following numbers of prize games electronic machines:

- A maximum of one hundred (100) machines in the case of a tourist residential 5 star establishment.

- A maximum of seventy-five (75) machines in the case of a tourist residential 4 star establishment.

- A maximum of fifty (50) machines in the case of a tourist residential 3 star establishment.

(b) Business establishments conducting the business of electronic games with prizes shall be permitted to import and conduct business with the types of machines stipulated in Appendix 1 issued with this Decision.

2. Conditions in order to operate machines:

(a) Each type of machine must have a complete file on the machine supplied by the manufacturer and providing specific certification about such items as the name of the machine, its type, its technical specifications such as the main operational principles, the method of playing the machine, the prize payment ratio and so forth.

(b) Prize games machines must be certified as having been acceptance tested by the manufacturer or by an independent organization with the function of acceptance testing such type of machine regarding its quality, the games with which the machine has been programmed, and other use functions of the machine.

3. Applicable to establishments conducting the business of other games with prizes:

The number and type of games machines (comprising both prize games electronic machines and other prize games machines) shall be as stipulated in the investment licence, investment certificate or business registration certificate.

Article 17. Importing machines and carrying out business activities

1. After completing all the conditions stipulated in article 15 of these Regulations, a business establishment shall be permitted to import prize games machines in the number and of the type as stipulated in article 16 of these Regulations.

2. Importation of machines must be implemented in accordance with the current law on import.

Article 18. Inspection of finances

The Ministry of Finance shall conduct financial inspections of the conduct by establishments of their business activities of electronic games with prizes.

A financial inspection shall be conducted periodically not more than once each year, except for a case [requiring] a random inspection. The Minister of Finance shall issue a decision on a specific inspection and the composition of the inspection [team].

Article 19. Conduct which constitutes a breach of law by establishments conducting the business of games with prizes:

1. Breach of the provisions on tax and finance stipulated in current regulations.

2. Breach regarding the number and type of machines.

3. Breach of any other provision in these Regulations.

Article 20. Dealing with breaches

Any establishment conducting the business of games with prizes which breaches the provisions in article 19 of these Regulations shall be dealt with in accordance with current regulations and also the following provisions:

1. Suspension of the business activity of games with prizes for a period of three months to one year, and notification to the investment licence-issuing body or business registration certificate-issuing body.

2. In a case when a business establishment commits a repeat offence, suspension of the business activity of games with prizes, and consideration of revocation of the investment licence or business registration certificate.

Chapter V

ORGANIZATION OF IMPLEMENTATION

Article 21. Business establishments which are permitted to conduct business activities of games with prizes shall be responsible for full compliance with these Regulations. Any difficulties should be reported to the Ministry of Finance for resolution.

LIST OF APPENDICES:

APPENDIX 1

(Issued with Decision 84/2007/QD-BTC of the Minister of Finance dated 17 October 2007)

LIST OF ELECTRONIC GAMES MACHINES

(referred to in article 16.1(b), and which must comply with article 2 of Decision 91):