Joint Circular No. 29/2014/TTLT-BGDDT-BTC-BLDTBXH dated August 26, 2014 of the Ministry of Education and Training, the Ministry of Finance and the Ministry of Labor, War Invalids and Social Affairs on the management of finance, accounting, audit and tax applicable to foreign cooperation and investment in education, training and vocational training

JOINT CIRCULAR

On the management of finance, accounting, audit and tax applicable to foreign cooperation and investment in education, training and vocational training[1]

Pursuant to the Government’s Decree No. 36/2012/ND-CP of April 18, 2012, defining the functions, tasks, powers and organizational structure of ministries and ministerial-level agencies;

Pursuant to the Government’s Decree No. 32/2008/ND-CP of March 19, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Education and Training;

Pursuant to the Government’s Decree No. 215/2013/ND-CP of December 23, 2013, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No. 106/2012/ND-CP of December 20, 2012, defining the functions, tasks, powers and organizational structure of the Ministry of Labor, War Invalids and Social Affairs;

Pursuant to the Government’s Decree No. 73/2012/ND-CP of September 26, 2012, on foreign cooperation and investment in education;

The Minister of Education and Training, the Minister of Finance and the Minister of Labor, War Invalids and Social Affairs promulgate the Joint Circular on the management of finance, accounting, audit and tax applicable to foreign cooperation and investment in education, training and vocational training.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation and subjects of application

1. Scope of regulation

This Circular provides the management of finance, accounting, audit and tax applicable to foreign cooperation and investment in education, training and vocational training of education institutions carrying out joint training with foreign parties and foreign-invested education institutions.

2. Subjects of application

This Circular applies to preschool institutions, general education institutions, vocational education institutions, higher education institutions and continuing education institutions (below collectively referred to as education institutions), international organizationspermitted to cooperateand invest in education, training and vocational training, and other related organizations and individuals.

Article 2.Accounting

Education institutions permitted to carry out joint training with foreign parties and foreign-invested education institutions shall do accounting work according to the Accounting Law and its guiding documents currently in force; and apply the accounting regime promulgated by the Ministry of Finance suitable to the operation model of each institution.

Article 3.Audit

Financial activities of joint training with foreign parties and financial statements of foreign-invested education institutions shall be annually audited by audit firms lawfully operating in Vietnam under the Law on Independent Audit and its guiding documents currently in force. Education institutions shall send their financial statements enclosed with auditor’s reports to their direct managing state agencies in charge of education and vocational training.

Article 4.Tax

Education institutions permitted to carry out joint training with foreign parties and foreign-invested education institutions may enjoy tax incentives and shall perform tax obligations under the current tax laws.

Chapter II

FINANCIAL MANAGEMENT APPLICABLE TO EDUCATION INSTITUTIONS CARRYING OUT JOINT TRAINING WITH FOREIGN PARTIES

Article 5.Revenues from joint training

1. Revenues from school fees and charges.

2. Non-refundable aid, gifts and presents of domestic and foreign organizations and individuals under law.

3. Other lawful revenues under law.

4. All revenues from joint training (related to joint activities carried out in Vietnam) shall be transferred into Vietnamese partners’ accounts opened at credit institutions in Vietnam.

Article 6.Expenses for joint training

1. Regular expenses for joint training activities, including salaries, wages, salary allowances, contributions to social insurance and health insurance and trade union funds, and other lawful interests of teachers, lecturers and employees engaged in joint training activities; public services, stationery, and expenses for professional operation (including materials, fuel, electricity and water serving theory teaching and practice), expenses for fixed asset depreciation and payment of loan interests and interests on money amounts borrowed from employees and officials for spending on joint training activities.

2. Expenses for scientific research, trial production and service provision.

3. Expenses for building and upgrading of physical facilities; procurement and repair of fixed assets and equipment to maintain and develop joint training activities.

4. Other expenses under law (if any).

Article 7.Financial management mechanism

1. Education institutions carrying out joint training may decide on revenue levels to ensure full payment of expenses for joint training activities and accumulation for reinvestment and development. School fee rates for each course shall be made public before enrolment.

2. Education institutions carrying out joint training shall develop expense norms (including at least expenses for salary and remuneration for teachers, lecturers and employees; expenses for teaching facilities and equipment; learning materials; and expenses for examination, assessment and accreditation of education quality) to meet training quality assurance conditions and suit the contents of the joint training dossiers approved by competent authorities according to Article 16 of the Government’s Decree No. 73/2012/ND-CP of September 26, 2012, on foreign cooperation and investment in education (below referred to as Decree No. 73), ensuring practicability, efficiency and minimum wage levels for employees engaged in joint training activities.

3. Revenue and expense norms, the use of positive differences between revenues and expenses, and the management of assets in joint training activities shall be provided in internal spending regulations of education institutions carrying out joint training as a basis for payment, finalization, inspection and supervision of financial activities. Revenues and expenses must have lawful invoices, documents and accounting records according to the Law on Accounting and its guiding documents currently in force.

4. Assets contributed as capital to joint training shall be managed and depreciated according to the Finance Ministry’s Decision No. 32/2008/QD-BTC of May 29, 2008, promulgating the Regulation on management and depreciation of fixed assets of state agencies, public non-business units and state budget-funded organizations and the Finance Ministry’s Circular No. 45/2013/TT-BTC of April 25, 2013, guiding the management, use and depreciation of fixed assets.

5. Education institutions carrying out joint training with foreign parties shall disclose their financial revenues and expenditures according to the Education and Training Minister’s Circular No. 09/2009/TT-BGDDT of May 7, 2009, promulgating the Regulation on publicity in education institutions of the national education system, and other current regulations on financial publicity.

6. Annually, after paying of expenses, tax and other contributions under regulations, joint training parties may use the positive difference between revenues and expenses (if any) under signed cooperation agreements (contracts).

Foreign joint training parties may remit abroad profits they are shared according to the Finance Ministry’s Circular 186/2010/TT-BTC of November 18, 2010, guiding the remittance abroad of profits earned by foreign organizations and individuals from their direct investment in Vietnam under the Investment Law, and comply with foreign exchange management regulations.

Chapter III

FINANCIAL MANAGEMENT APPLICABLE TO FOREIGN-INVESTED EDUCATION INSTITUTIONS

Article 8.Revenues of foreign-invested education institutions

1. Revenues from school fees and charges.

2. Revenues from scientific research and technology transfer, trial production and services.

3. Non-refundable aid, gifts and presents from domestic and foreign organizations and individuals under regulations.

4. Profits earned from associated or joint activities and bank deposit interest.

5. Other lawful revenues under law (if any).

Article 9.Expenses of foreign-invested education institutions

1. Regular expenditures for education and training activities, including salaries, wages, salary allowances, contributions to social insurance, health insurance and trade union funds and other benefits paid to teachers, lecturers and employees under current regulations; public services, stationery, and expenses for professional operations (including materials, fuel, electricity and water serving theory teaching and practice), expenses for fixed asset depreciation and payment of loan interest and service charges.

2. Expenses for scientific research, trial production and service provision.

3. Expenses for development investment, including building of physical facilities, procurement of fixed assets and equipment, repair and improvement of physical facilities, and implementation of investment projects to maintain and develop training activities.

4. Expenses for payment of interests on loans and capital contributions for education and training activities in Vietnam.

5. Other expenses under the Vietnamese law (if any).

Article 10.Financial management mechanism

1. Foreign-invested education institutions are entitled to autonomy and shall take self-responsibility for their finance; and may open foreign-currency and Vietnam-dong accounts at licensed credit institutions to serve their operation under the Vietnamese law.

2. Foreign-invested education institutions may decide on revenue levels to ensure full payment of expenses and accumulation for reinvestment and development. School fee rates for each course shall be made public before enrolment.

3. Based on their functions and tasks and financial capacity, foreign-invested education institutions may decide on expense norms to meet training quality assurance conditions and suit the contents of the approved license application dossiers. Expense norms shall be stated in internal spending regulations of the institutions. Revenues and expenses must have lawful invoices, documents and accounting records according to the Law on Accounting and its guiding documents currently in force.

4. Foreign-invested education institutions shall deduct at least 2% of the total school fee into the learning promotion scholarship fund. Upon annual finalization of the fund, any amount which remains unused or has been used improperly shall be added to the revenue-expenditure balance. Expenses from the learning promotion scholarship fund for proper purposes may be accounted as deductible expenses when determining enterprise income tax in the tax period.

5. Foreign-invested education institutions shall make deductions for the scientific and technological development fund according to Clause 11, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax and its guiding documents.

6. Foreign-invested education institutions shall disclose their revenues and expenditures according to the Education and Training Minister’s Circular No. 09/2009/TT-BGDDT of May 7, 2009, promulgating the Regulation on the implementation of publicity in education institutions of the national education system, and current regulations on financial publicity.

7. Foreign investors who invest in foreign-invested education institutions may remit abroad profits they are shared after fully paying tax and other financial obligations, and shall comply with foreign exchange management regulations.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 11.Implementation responsibilities

1. The Ministry of Education and Training shall:

a/ Proactively detect arising problems related to the financial management of foreign cooperation and investment in education specified in this Joint Circular, and promptly coordinate with the Ministry of Finance in considering and settling them; and propose amendments if necessary;

b/ Regularly or extraordinarily examine and inspect education institutions carrying out joint training with foreign parties and foreign-invested education institutions;

c/ Assume the prime responsibility for, and coordinate with the Ministry of Finance and the Ministry of Labor, War Invalids and Social Affairs in, reviewing and evaluating the implementation of financial management regulations applicable to foreign corporation and investment in education, training and vocational training.

2. The Ministry of Labor, War Invalids and Social Affairs shall:

a/ Proactively detect arising problems related to the financial management of foreign cooperation and investment in education specified in this Joint Circular, and promptly coordinate with the Ministry of Finance in considering and settling them; and propose amendments if necessary;

b/ Regularly or extraordinarily examine and inspect education institutions carrying out joint training with foreign parties and foreign-invested education institutions;

c/ Coordinate with the Ministry of Education and Training and the Ministry of  Finance in reviewing and evaluating the implementation of financial management regulations applicable to foreign cooperation and investment in education, training and vocational training.

3. The Ministry of Finance shall coordinate with the Ministry of Education and Training and the Ministry of Labor, War Invalids and Social Affairs in reviewing and evaluating the implementation of financial management regulations applicable to foreign cooperation and investment in education, training and vocational training.

4. Provincial-level People’s Committees shall:

a/ Direct, guide and organize the foreign cooperation and investment in education, training and vocational training in their localities, and biannually and annually report these activities to ministries and sectors;

b/ Inspect and supervise the performance of financial obligations, labor relations and salaries and protect lawful rights and interests of employees and employers; and coordinate with ministries and sectors in inspecting education, training and vocational training investment projects in their localities.

Article 12.Implementation provisions

1. This Circular takes effect on October 10, 2014.

2. In case documents referred to in this Circular are replaced or revised, new ones shall be applied.

Any problems arising in the course of implementation of this Circular should be promptly reported to the Ministry of Education and Training for study and settlement in coordination with the Ministry of Finance and the Ministry of Labor, War Invalids and Social Affairs.-