Circular 38/2024/TT-BTC evaluation of operation of price appraisal enterprises; setting aside professional risk reserve

CIRCULAR

On the evaluation of operation of price appraisal enterprises; setting aside professional risk reserve, reporting regime on price appraisal activities of price appraisal enterprises and expenses for price appraisal by the appraisal council

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Pursuant to the Law on Price dated June 19, 2023;

Pursuant to the Government’s Decree No. 14/2023/ND-CP dated April 20, 2023 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Price Management Department;

The Minister of Finance promulgates a Circular regulating the evaluation of operation of price appraisal enterprises; setting aside professional risk reserve, reporting regime on price appraisal activities of price appraisal enterprises and expenses for price appraisal by the appraisal council.

Article 1. Scope of regulation

This Circular details Point e, Clause 10, Article 14 of the Law on Price regarding the evaluation of operation of price appraisal enterprises; Point e and h, Clause 2, Article 53 of the Law on Price regarding setting aside professional risk reserve and the reporting regime on price appraisal activities of price appraisal enterprises; Clause 1, Article 65 of the Law on Price regarding expenses for price appraisal by the appraisal council.

Article 2. Subjects of application

State price management authorities, competent state authorities authorized to establish appraisal councils, price appraisal enterprises, price appraisers, other relevant organizations and individuals.

Article 3. Evaluation of operation of price appraisal enterprises

1. Evaluation content

a) Maintaining conditions for price appraisal activities;

b) Complying with regulations of law on price appraisal and fulfilling obligations of price appraisal enterprises;

c) Participating in the coordination of the development and implementation of legal documents on prices and price appraisal led and organized by the Ministry of Finance;

d) Participating in the coordination of international cooperation activities;

dd) Participating in the coordination of state management activities on prices and price appraisal of Ministries, sectors, and localities;

e) Participating in the coordination of scientific research activities in the field of price appraisal.

2. The evaluation period is from January 01 to December 31 of the year preceding the year of evaluation.

In the period from April 15 to May 31 every year, the Price Management Department shall organize the evaluation of operation of price appraisal enterprises for price appraisal enterprises that meet all of the following conditions:

a) Being granted a certificate of eligibility for provision of price appraisal services before the evaluation period;

b) Meeting the operating conditions of a price appraisal enterprises for 6 months or more during the evaluation period;

c) Meeting the operating conditions of a price appraisal enterprises in the period during which the evaluation is conducted.

Price appraisal enterprises are responsible for submitting reports as prescribed at Point a, Clause 1, Article 5 of this Circular as a basis for the evaluation of operation of price appraisal enterprises.

3. The evaluation shall be conducted using scoring method based on the evaluation criteria, which are determined by aggregating and analyzing information from the following sources:

a) Information and data in the Report as prescribed at Point a, Clause 1, Article 5 of this Circular;

b) Information and data obtained in the process of state management of price appraisal for price appraisal enterprises and price appraisers;

c) Feedback from Ministries, sectors, localities and organizations and individuals (if any).

4. Evaluation content shall be assessed at different levels of activity through detailed scores for each component criterion (detailed in Appendix I issued together with this Circular).

5. The evaluation aims to improve the quality of activities of price appraisal enterprises. The evaluation results shall be published by the Price Management Department on the Ministry of Finance's website before June 30 annually. The evaluation results do not reflect the quality of specific Appraisal Certificates or Appraisal Reports of price appraisers or price appraisal enterprises.

Article 4. Setting aside professional risk reserve of price appraisal enterprises

1. Price appraisal enterprises that do not purchase professional liability insurance for price appraisal services must set aside professional risk reserve at an annual rate of 1% of their price appraisal service revenue (excluding value-added tax). These reserves shall be set aside at the end of the fiscal year and accounted for in the same manner as reserve for liabilities.

2. In cases where the enterprise's professional risk reserve balance at the end of the fiscal year exceeds 10% of the average price appraisal service revenue (revenue excluding value-added tax) for the last 3 years, the enterprise shall reverse the excess amount and account it as other income of the enterprise.

3. Enterprises are responsible for developing and issuing internal regulations for the management and use of professional risk reserve.

4. In cases where an enterprise ceases its price appraisal activities, the balance of professional risk reserves that have been set aside but not fully utilized shall be accounted for as other income of the enterprise.

Article 5. Reporting regime on price appraisal activities of price appraisal enterprises

1. Periodic reports:

a) Periodically from January 01 to March 31 every year, price appraisal enterprises shall report in the form of the Report on enterprise status and some appraisal activity indicators as prescribed in Appendix II issued together with this Circular. The reporting period is from January 01 to December 31 of the year preceding the reporting year. The deadline for report submission is no later than March 31 of the reporting year.

b) Periodically after December 15 of the year, price appraisal enterprises shall report in the form of the Report on review of the list of price appraisers at the enterprise as prescribed in Appendix III issued together with this Circular. The reporting cut-off date is December 15 of the reporting year. The deadline for report submission is no later than December 20 of the reporting year.

2. The periodic reports prescribed in Clause 1 of this Article shall be submitted to the Ministry of Finance (Price Management Department) by one of the following methods:

a) Submitting directly to the document management office of the Ministry of Finance;

b) Sending via postal service;

c) Sending via fax or email to [email protected] (scanned copy);

d) Sending via the Ministry of Finance's specialized information reporting software system (if any).

3. Ad hoc reports: Price appraisal enterprises shall make ad hoc reports on matters related to compliance with law on price appraisal by the price appraisal enterprises and price appraisers at the enterprise in the following cases:

a) Upon written request from the Ministry of Finance (Price Management Department);

b) Upon written request from state inspection agencies, state audit agencies, or competent authorities authorized to conduct legal proceedings to serve the handling of cases with signs of violation related to appraisal certificates and appraisal reports issued by price appraisal enterprises, in accordance with regulations of law on state inspection, state audit, and criminal proceedings.

4. Price appraisal enterprises are responsible for the accuracy and truthfulness of the information and data in the reports.

Article 6. Expenses for price appraisal activities provided by the appraisal council

1. The categories and levels of expenses for price appraisal activities of the appraisal council as prescribed in Clause 1, Article 65 of the Law on Price, include:

a) Business travel expenses shall be implemented in accordance with the provisions of Circular No. 40/2017/TT-BTC dated April 28, 2017 of the Ministry of Finance regulating the regime of business travel expenses, conference expenses, and amending, supplementing or replacing documents (if any);

b) Expenses for price surveys and collection of information related to assets to be valued shall be implemented in accordance with the provisions of Point c, Clause 5, Article 3 of Circular No. 109/2016/TT-BTC dated June 30, 2016 of the Ministry of Finance regulating the preparation of cost estimates, management, use and settlement of funds for statistical surveys, national statistical censuses, and amending, supplementing or replacing documents (if any);

c) Expenses for professional explanatory and justification reports prepared by the appraisal council to support the asset appraisal process shall be implemented in accordance with the provisions of Clause 3, Article 1 of Circular No. 42/2022/TT-BTC dated July 6, 2022 of the Minister of Finance amending and supplementing a number of articles of Circular No. 338/2016/TT-BTC dated December 28, 2016 of the Minister of Finance regulating the preparation of cost estimates, management, use and settlement of state budget funds to ensure the development of legal documents and the improvement of the legal system (hereinafter referred to as Circular No. 42/2022/TT-BTC), at the rate of VND 1,200,000 per report and amending, supplementing or replacing documents (if any);

d) Expenses for meetings of appraisal council shall be implemented in accordance with the provisions of Clause 3, Article 1 of Circular No. 42/2022/TT-BTC and amending, supplementing or replacing documents (if any);

dd) Expenses for office supplies and printing of documents for asset price appraisal activities shall be based on valid invoices and payment vouchers, within the allocated budget;

e) Expenses for hiring certified professionals as members of the appraisal council, for hiring inspection organizations to assess economic-technical condition and quality ratio of assets, and for hiring asset price appraisal services (if any) shall be implemented in accordance with the provisions of law on bidding;

g) For expenses related to price appraisal activities not specified at points a, b, c, d, and dd of Clause 1 of this Article, the head of the competent authority authorized to establish the appraisal council shall consider and decide within their authority or propose to the competent higher authority for consideration and decision in accordance with the provisions of law.

2. Allowances and other payments outside of salary for officials, public employees, and civil servants originating from the state budget, as stipulated in this Circular and in referenced documents for application in this Circular, shall be implemented until the salary reform is carried out in accordance with Resolution No. 27/NQ-TW dated May 21, 2018 of the Seventh Session of the Twelfth Central Committee on salary reform for officials, public employees, civil servants, armed forces, and employees in enterprises.

3. Annually, the competent state authority authorized to establish the appraisal council shall prepare a budget estimate for the price appraisal activities of the appraisal council and submit it to the competent higher authority for approval. In cases where unexpected tasks arising during the year, a supplementary budget estimate shall be prepared in accordance with the provisions of law on state budget management.

4. The management, use, and settlement of funds for the price appraisal activities of the appraisal council as prescribed in Clause 1 of this Article shall be implemented in accordance with the current provisions of law on state budget management, ensuring the principles of thrift, efficiency, and anti-wastefulness.

Article 7. Effect

1. This Circular takes effect from July 01, 2024.

2. The following regulations shall cease to be effective from July 01, 2024:

a) Circular No. 38/2014/TT-BTC dated March 28, 2014, of the Minister of Finance guiding a number of articles of the Government's Decree No. 89/2013/ND-CP dated August 06, 2013, detailing the implementation of a number of articles of the Law on Price regarding price appraisal;

b) Article 2 of Circular No. 76/2020/TT-BTC dated August 14, 2020, of the Minister of Finance amending and supplementing a number of articles of the Joint Circular No. 39/2014/TTLT-BCT-BTC dated October 29, 2014, of the Ministry of Industry and Trade and the Ministry of Finance regulating the method of calculating the base price; the mechanism for establishing, managing, and using the Price Stabilization Fund and regulating petrol and oil prices as prescribed in the Government’s Decree No. 83/2014/ND-CP dated September 03, 2014, on petrol and oil trading; Circular No. 38/2014/TT-BTC dated March 28, 2014, of the Ministry of Finance guiding a number of articles of the Government's Decree No. 89/2013/ND-CP dated August 06, 2013, detailing the implementation of a number of articles of the Law on Price regarding price appraisal; and Circular No. 138/2007/TT-BTC dated November 29, 2007, of the Ministry of Finance guiding the management, payment, and settlement of investment capital for compensation, support, and resettlement of the Son La hydropower project shall cease to be effective from the effective date of this Circular;

c) Circular No. 323/2016/TT-BTC dated December 16, 2016, of the Minister of Finance regulating the inspection, supervision, and evaluation of the quality of price appraisal activities;

d) Circular No. 60/2021/TT-BTC dated July 21, 2021, of the Minister of Finance amending and supplementing a number of articles of Circular No. 38/2014/TT-BTC dated March 28, 2014, guiding a number of articles of the Government's Decree No. 89/2013/ND-CP dated August 06, 2013, detailing the implementation of a number of articles of the Law on Price regarding price appraisal;

dd) Circular No. 25/2019/TT-BTC dated April 22, 2019, of the Minister of Finance amending and supplementing a number of articles of Circular No. 323/2016/TT-BTC dated December 16, 2016, of the Ministry of Finance regulating the inspection, supervision, and evaluation of the quality of price appraisal activities.

Article 8. Implementation organization

1. Relevant organizations and individuals shall be responsible for implementing the provisions of this Circular.

2. During the implementation process, if there are any difficulties, organizations and individuals are requested to promptly report to the Ministry of Finance for consideration and resolution./.