Decree No. 120/2016/ND-CP dated August 23, 2016 of the Government on detailing and guiding the implementation of a number of Articles of the Law on Fees and Charges

DECREE

Detailing and guiding the implementation of a number of articles of the Law on Charges and Fees[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the November 25, 2015 Law on Charges and Fees;

Pursuant to the June 25, 2015 Law on the State Budget;

At the proposal of the Minister of Finance;

The Government promulgates the Decree detailing and guiding the implementation of a number of articles of the Law on Charges and Fees.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree prescribes the declaration, collection and remittance of charges and fees; management and use of charges; finalization of charges and fees; and responsibilities of state agencies and organizations in the collection, remittance, management and use of charges and fees.

Article 2. Subjects of application

This Decree applies to:

1. Charge and fee payers, including organizations and individuals that are provided with public services or for which/whom state management jobs are performed in accordance with the Law on Charges and Fee.

2. Charge- and fee-collecting organizations, including state agencies, overseas Vietnamese representative agencies, public non-business units, and organizations which are assigned by competent state agencies to provide public services or perform state management jobs and entitled to collect charges or fees in accordance with the Law on Charges and Fees.

3. Other state agencies, organizations and individuals involved in the declaration, collection, remittance, management and use of charges and fees.

Chapter II

DECLARATION, COLLECTION, REMITTANCE, MANAGEMENT AND
USE OF CHARGES AND FEES

Article 3. Declaration, collection, remittance and finalization of charges and fees

1. Charges and fees shall be paid on a monthly, quarterly or annual basis or when they arise. Based on the nature and characteristics of each charge or fee, competent state agencies specified in Clause 2, Article 4 of the Law on Charges and Fees shall determine appropriate declaration and payment periods.

2. Charge- and fee-collecting organizations shall declare and remit charge and fee revenues as follows:

a/ Fee-collecting organizations shall wholly remit fee revenues into the state budget. Fee-collecting organizations shall declare and remit fee revenues on a monthly basis and finalize fee revenues on an annual basis in accordance with the law on tax administration.

b/ Charge-collecting organizations shall deposit charge revenues into an account of charge revenues pending remittance into the state budget on a daily, weekly or monthly basis. After considering whether a charge-collecting organization’s charge revenue is small or large and whether the distance from the charge collection place to a state treasury is long or short, competent state agencies specified in Clause 2, Article 4 of the Law on Charges and Fees shall decide whether such charge-collecting organization deposits charge revenues into the account of charge revenues pending remittance into the state budget on a daily, weekly or monthly basis.

Charge-collecting agencies shall declare charge revenues on a monthly basis and finalize charge revenues on an annual basis in accordance with the law on tax administration and, after deducting the amount allowed to be retained, remit the remainder into the state budget.

c/ Organizations collecting road tolls and overseas Vietnamese representative agencies collecting charges and fees shall declare, collect and remit such tolls, charges and fees under the guidance of the Ministry of Finance.

3. Charge- and fee-collecting agencies shall make and issue charge and fee receipts under the guidance of the Ministry of Finance.

4. Currencies for charge and fee payment and collection

a/ Charges and fees to be collected in Vietnam shall be collected in Vietnam dong, except cases in which a fee or charge may be collected in a freely convertible foreign currency as prescribed by law. A charge or fee that may be collected in a freely convertible foreign currency as prescribed may be collected in such foreign currency or in Vietnam dong after such foreign currency is converted into Vietnam dong at the exchange rate which is:

- The buying exchange rate offered by the commercial bank or credit institution where the charge or fee payer opens its/his/her account at the time of charge or fee payment, for cases of paying charges or fees at commercial banks or other credit institutions.

- The accounting exchange rate announced by the Ministry of Finance at the time of charge or fee payment, for cases of paying charges or fees directly at state treasuries.

- The transfer buying rate offered at the head office of the Joint Stock Commercial Bank for Foreign Trade of Vietnam at the time of charge or fee payment or at the end of the working day preceding a holiday or weekend, for cases of paying charges or fees in cash or in another form directly to the collecting organization.

b/ Charges and fees to be collected overseas may be collected in the currencies of host countries or in a freely convertible foreign currency.

Article 4. Principles of charge management and use

1. Charges collected for the services provided by state agencies shall be remitted into the state budget; in case state agencies are allowed to have their operating expenses covered by charge revenues, charge revenues shall be deducted at the rate determined under  Article 5 of this Decree, the remainder (if any) shall be remitted into the state budget.

State agencies allowed to have their operation expenses covered by charge revenues include:

a/ Agencies applying the financial mechanism under the Government’s or the Prime Minister’s regulations on the mechanism of autonomy and self-accountability in the use of state payrolls and administrative management funds for state agencies.

b/ Overseas Vietnamese representative agencies.

c/ Public security and defense agencies assigned to provide services or perform state management jobs and entitled to collect charges in accordance with the Law on Charges and Fees.

2. Charges collected for the services provided by public non-business units may be partly or wholly retained to cover service provision and charge collection expenses at the rate determined under Article 5 of this Decree; the remainder (if any) shall be remitted into the state budget.

3. Charges collected for the services provided by organizations as assigned by competent state agencies may be partly or wholly retained to cover service provision and charge collection expenses at the rate determined under Article 5 of this Decree; the remainder (if any) shall be remitted into the state budget, unless otherwise prescribed by the Government; in this case, the Government’s regulations shall apply. The retained charge amounts constitute turnover of charge-collecting organizations.

Article 5. Determination of retention rate and management and use of charges

1. The charge amount to be deducted or retained at a charge-collecting organization mentioned in Article 4 of this Decree shall be determined as follows:

a/ Charge amount to be deducted or retained = Charge revenue  x Retention rate.

b/ The retention rate shall be determined as follows:

In which:

- The annual estimate of expenditures for service provision and charge collection shall be formulated based on the expenses prescribed in Clause 2 of this Article and the prescribed spending regime, criteria and norms;

- The annual estimate of charge revenue shall be formulated by the charge-collecting organization based on the charge rates and volume of services provided in the year.

- In case of adjusting the retention rate, revenue or expenditure estimates shall also be based on the previous year’s revenue and expenditure data.

- The retention rate must not exceed 100%.

c/ Based on the nature and characteristics of charges and the spending items prescribed in Clause 2 of this Article, the charge-collecting organization shall formulate revenue and expenditure estimates and determine the retention rate in a charge collection plan and submit such plan to a competent authority prescribed in Article 6 of this Decree.

d/ A competent state agency prescribed in Clause 2, Article 4 of the Law on Charges and Fees shall decide on the retention rate applicable to the charge-collecting organization. For charges of similar nature, the competent agency shall consider applying a common retention rate for all of them.

In case due to a change in the State’s policies, the retained charge amount is not enough to cover operation expenses of the charge-collecting organization or is not used up and carried forward year by year, the competent agency shall adjust the retention rate as appropriate.

2. The amount of charge revenue retained at a charge-collecting organization as prescribed in Clauses 1 and 2, Article 4 of this Decree shall be spent on the following items:

a/ Expenses for implementation of the autonomy regime (for state agencies) or current expenses (for public non-business units).

- Payments to persons engaged in job performance, service provision or charge collection: wage, remuneration, wage-based allowances and wage-based contributions as prescribed (except wages for cadres and public employees which are paid from the state budget under regulations).

- Expenses for job performance, service provision and charge collection such as stationeries, office supplies, communications, electricity, water and business-trip allowances under current regulations.

- Expenses for regular repair of assets, machinery and equipment directly used in job performance, service provision and charge collection.

- Expenses for purchase of supplies and materials to serve job performance,  service provision and charge collection;

- Depreciation of fixed assets used for job performance, service provision and charge collection, for public non-business units whose current expenditures and investment expenditures are covered by charge revenues.

- Other expenses related to job performance, service provision and charge collection.

b/ Expenses other than those for implementation of the autonomy regime (for state agencies) and non-current expenses (for public non-business units)

- Expenses for procurement and repair of assets, machinery and equipment serving job performance, service provision and charge collection (except for public non-business units whose current expenditures and investment expenditures are covered by charge revenues in accordance with the Law on Charges and Fees).

- Other non-current expenses related to job performance, service provision or charge collection.

3. In addition to the expenses prescribed in Clause 2 of this Article, charge-collecting public non-business agencies which are permitted by the Government or Prime Minister to use the retained charge amounts to cover other expenses may spend such amounts under the Government’s regulations or Prime Minister’s decisions. For state agencies implementing financial mechanisms prescribed under separate regulations of the Government or Prime Minister, the retained charge amounts shall be used under such regulations.

4. With regard to the amounts of charge revenues retained at charge-collecting organizations to cover expenses prescribed in Clause 2 of this Article, state agencies shall comply with the Government’s or Prime Minister’s regulations on the regime of autonomy and self-accountability in the use of payrolls and administrative management funds; and public non-business units shall comply with the Government’s regulations on the autonomy mechanism.

5. Annually, charge-collecting agencies shall finalize revenues and expenditures under regulations. After finalizing revenues and expenditures as prescribed, the retained amounts which have not yet been used up in the year may be carried forward to the subsequent year for continued spending under regulations.

Chapter III

IMPLEMENTATION PROVISIONS

Article 6. Organization of implementation

Ministries, ministerial-level agencies, government-attached agencies, provincial-level People’s Committees and charge- and fee-collecting organizations shall comply with the Law on Charges and Fees and the following regulations:

1. Charge- and fee-collecting organizations shall:

a/ Make charge and fee collection plans and submit them to line ministries (for charges and fees to be decided by the Ministry of Finance) or line provincial-level departments (for charges and fees to be decided by provincial-level People’s Councils). In case a charge or fee is collected by more than one organization, it is not required to issue a separate document for each organization but the concerned line ministry, for charges and fees to be decided by the Ministry of Finance, or line department, for charges and fees to be decided by provincial-level People’s Councils, shall make a charge collection plan as prescribed in Clause 3 of this Article.

b/ A charge collection plan must state the method of service provision and charge collection; tentative charge rates, grounds for determination of charge rates; charge-liable subjects; charge exemption and reduction; revenue and expenditure estimates; retention rate; evaluation of payers’ payment capacity; and efficiency of charge collection.

c/ A fee collection plan must state the method of service provision and fee collection; tentative fee rates, grounds for determination of fee rates; fee-liable subjects; fee exemption and reduction; revenue and expenditure estimates; retention rates; evaluation of payers’ payment capacity; efficiency of fee collection.   

2. For charges and fees decided by provincial-level People’s Councils, provincial-level People’s Committees shall direct the making and appraisal of charge and fee collection plans.

3. Ministries, ministerial-level agencies and government-attached agencies shall:

a/ Receive requests of charge- and fee-collecting organizations under their management, and send written requests to the Ministry of Finance to promulgate documents on charges and fee collection.

b/ For a charge or fee which is collected by more than one organization or local agency (it is not required to issue a separate document for each charge- or fee-collecting organization), assign related units to make charge or fee collection plans and submit these plans for appraisal, and send written requests to the Ministry of Finance to promulgate documents on charge and fee collection.

4. Charges and fees on the list of charges and fees promulgated together with the Law on Charges and Fees may be collected only after documents specifying the charge or fee rates are promulgated.

Article 7. Transitional provisions

1. Charge- and fee-collecting organizations shall finalize revenues from charges and fees collected in 2016 in accordance with the Ordinance on Charges and Fees and the law on tax administration. After the finalization, the retained charge and fee revenue amounts which have not yet been used up in the year may be carried forward to the subsequent year for continued spending; by January 1, 2018, any unused fee amounts shall be remitted into the state budget.

2. Charges on the list of charges and fees promulgated together with the Government’s Decree No. 24/2006/ND-CP  of March 6, 2006, detailing the Ordinance on Charges and Fees, which are changed into prices in accordance with the Law and Charges and Fees, must comply with the law on price.

Article 8. Effect

1. This Decree takes effect on January 1, 2017.

2. From the effective date of this Decree, the following regulations cease to be effective:

a/ The Government’s Decree No. 57/2002/ND-CP of June 3, 2002, detailing the Ordinance on Charges and Fees; 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; and Decree No. 115/2011/ND-CP of December 14, 2011, amending and supplementing Point 2, Section IV, Part B of the List of charges and fees promulgated together with Decree No. 24/2006/ND-CP;

b/ Articles 46, 47 and 48 and other contents related to the charge for civil judgment execution of the Government’s Decree No. 62/2015/ND-CP of July 18, 2015, detailing and guiding the implementation of a number of articles of the Law on Execution of Civil Judgments;

c/ Provisions on settlement of competition cases and the fees for appraisal of dossiers of request for immunity in Articles 51, 52, 53, 54, 55, 56 and 57 of the Government’s Decree No. 116/2005/ND-CP of September 15, 2005, detailing a number of articles of the Competition Law.

3. To annul contents on charges and fees of the Prime Minister’s Directive No. 24/2007/CT-TTg of November 1, 2007, on further reorganizing the implementation of the law on charges and fees and the policy on mobilization and use of people’s contributions.

4. Ministers, heads of ministerial-level agencies and government-attached agencies, and chairpersons of provincial-level People’s Committees shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC