THE MINISTRY OF FINANCE
SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom - Happiness
No. 109/2007/TT-BTC
Hanoi, September 10, 2007
CIRCULAR
GUIDING THE STATE FINANCIAL MANAGEMENT OF FOREIGN NON-GOVERNMENTAL AID NOT CONSTITUTING A STATE BUDGET REVENUE SOURCE
Pursuant to the Governments Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Finance Ministry;
Pursuant to the Prime Minister s Decision No. 64/2001/QD-TTg of April 26, 2001. promulgating the Regulation on management and use of foreign non-governmental aid;
The Finance Ministry guides the state financial management of foreign non-governmental aid not constituting a state budget revenue source as follows:
Part 1
GENERAL PROVISIONS
1. This Circular guides the state financial management of non-governmental aid provided by foreign non-governmental organizations, other organizations and foreign individuals, including overseas Vietnamese, to Vietnams non-state organizations for humanitarian and development objectives which have been negotiated, concluded and approved under the Regulation on management and use of foreign non-governmental aid promulgated together with the Prime Ministers Decision No. 64/2001/QD-TTg of April 26, 2001.
Other supports given by foreign non-governmental organizations and organizations and individuals beyond the above scope are regarded as presents not subject to the management guided in this Circular.
2. Foreign non-governmental aid not constituting a state budget revenue source means non-governmental aid defined in Section 1, Part 1 of this Circular, directly provided by organization or individual donors according to their commitments with non-state organizations in order to improve the operating capacity and conditions of these organizations, and approved by competent bodies of these organizations (defined at Point 2, Article 6 of the Regulation on management and use of foreign non-governmental aid promulgated together with the Prime Ministers Decision No. 64/2001/QD-TTg of April 26, 2001).
3. Non-state organizations mentioned in this Circular include the following legal entities:
a/ Political organizations and socio-political organizations;
b/ Social organizations, socio-professional organizations;
c/ Social funds, charity funds;
d/ Economic organizations;
e/ Other non-governmental organizations.
4. Foreign non-governmental aid not constituting a state budget revenue source shall be used for the following purposes:
a/ Financing regular activities;
b/ Financing research, training and retraining;
c/ Procuring and building working facilities of organizations;
d/ Paying other expenses of organizations.
5. Non-state organizations shall bear responsibility before law for transparent management and efficient use of foreign non-governmental aid not constituting a state budget revenue source for proper purposes and in strict accordance with their commitments with donors. When using aid money for spending purposes specified by regulations on management and use of the state budget, aid-using project owners/units are not required to organize bidding.
Part 2
SPECIFIC PROVISIONS
I. AID RECEIPT
When aid is directly provided in the form of goods or turnkey capital construction works or aid money is used to purchase goods in order to enjoy tax exemption for non-refundable aid goods according to the provisions of tax law, such goods must go through aid certification procedures prescribed below:
1. Aid-certifying agency:
The agency competent to certify foreign non-governmental aid not constituting a state budget revenue source is the Finance Ministry.
2. Units requesting aid certification:
Aid-using project owners/units shall request aid certification. Aid certification requests are stated in aid certification declaration forms.
3. Aid certification declaration forms:
3.1. Set aid certification declaration forms enclosed with this Circular include:
- Form C1-HD/XNVT: Aid certification declaration form for imported goods (Appendix 1a, not pruned herein), which shall be used in making aid certification declarations for equipment, machinery, supplies, materials, utensils and other kinds of goods imported from foreign countries;
Form C2-HD/XNVT: Aid certification declaration form for domestic goods and services (Appendix 1b, not primed herein), which shall be used in making aid certification declarations for equipment, machinery, supplies, materials, utensils and other kinds of goods domestically purchased (including service charges) with foreign aid.
- Form C3-HD/XNVT: Aid certification declaration form for monetary aid (Appendix 1c, not printed herein), which shall be used in making declarations for foreign monetary aid amounts.
- When a foreign country provides goods, separate equipment and monetary amounts as aid for building a capital construction work, which, upon completion, will be transferred to the Vietnamese side by turnkey mode (below referred to as work construction aid), the aid-using project owner/unit shall still use forms C1 ,C2 and C3-HD-XNVT in making declaration for aid certification but mark on the section work construction aid of such forms and concurrently supply additional information on the work (name, location, projected time for construction and handover of the work). After the work is completed and handed over by the donor to the Vietnamese side, the aid-using project owner/unit shall use these aid certification declaration forms for drawing up a list of certifications of work construction aid (according to a form in Appendix 2 to this Circular, not printed herein). This list and the work takeover test report constitute legal grounds for the tax agency to refund value-added tax.
3.2. Management of aid certification declaration forms:
After the Finance Ministry completes procedures for aid certification, an aid certification declaration form shall be kept and managed as follows:
- The Finance Ministry shall keep two copies (in the aid certification register);
-The customs office and the tax agency shall each process and keep one copy in the tax exemption/refund dossier;
- The managing agency of the aid-using project owner/unit shall keep one copy for monitoring the management and making general reports on foreign aid;
- The aid-using project owner/unit shall keep one copy for making reports on receipt, payment and settlement of the aid program or project.
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