THE MINISTRY OF FINANCE
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No: 78/2006/TT-BTC
Hanoi, August 24, 2006
 
CIRCULAR
GUIDING THE FINANCIAL REGIME APPLICABLE TO BORDER-GATE ECONOMIC ZONES MANAGED BY PROVINCIAL-LEVEL PEOPLE'S COMMITTEES
Pursuant to the State Budget Law; the Investment Law; the laws and ordinances on taxes, charges, fees and customs;
Pursuant to the Prime Minister's Decision No. 53/2001/QD-TTg of April 19, 2001, on policies towards border-gate economic zones;
Pursuant to the Prime Minister's Decision No. 273/2005/QD-TTg of October 31, 2005, amending and supplementing a number of articles of his Decision No. 53/2001/QD-TTg of April 19, 2001 on policies towards border-gate economic zones;
The Finance Ministry hereby guides the financial regime applicable to border-gate economic zones managed by provincial-level People's Committees as follows:
I. APPLICATION SCOPE AND SUBJECTS
1. Application scope:
This Circular applies to border-gate economic zones (hereinafter called border-gate EZs for short), which are established under the Prime Minister's decisions and managed by provincial-level People's Committees.
With regard to centrally-run border-gate EZs established under separate decisions of the Prime Minister, the applicable financial regime shall comply with separate guiding circulars of the Finance Ministry.
2. Application subjects:
This Circular shall apply to the following subjects:
2.1. Provinces and centrally-run cities (hereinafter collectively referred to as provinces) which have border-gate EZs defined in Clause 1, Section I above;
2.2. Domestic and foreign investors conducting business activities (including infrastructure construction, production, trading and provision of services) in border-gate EZs;
2.3. Business activities conducted within border-gate EZs.
Domestic and foreign investors that conduct business activities in border-gate EZs without establishing economic legal entities therein must account separately such business activities in order to have a ground for determination of preferences.
3. Interpretation of terms
- Tax suspension areas mean those in border-gate EZs, which are established according to the provisions of Clause 1, Article 1 of the Prime Minister's Decision No. 273/2005/QD-TTg of October 31, 2005.
- Inland Vietnam includes the remaining part of border-gate EZs besides tax suspension areas and the remaining part of the Vietnamese territory (except for the areas similar to non-tariff areas defined in Clause 1, Article 5 of June 14, 2005 Import Tax and Export Tax Law No. 45/2005/QH11 and Clause 2, Article 1 of the Government's Decree No. 149/2005/ND-CP of December 8, 2005, detailing the implementation of this Law).
- Non-tariff areas mean those defined in Clause 1, Article 5 of June 14, 2005 Import Tax and Export Tax Law No. 45/2005/QH11 and Clause 2, Article 1 of the Government's Decree No. 149/2005/ND-CP of December 8, 2005, detailing the implementation of this Law.
II. FINANCIAL PREFERENTIAL REGIME
1. Preferences for investment in infrastructure construction in border-gate EZs:
1.1. Investment support from the central budget for infrastructure construction:
a/ Subjects eligible for investment support from the central budget:
The central budget shall provide support to budgets of the provinces having provincially-run border-gate EZs for investment in the construction of important socio-technical infrastructures, service and public facilities for common use in border-gate EZs under target programs, which are included in the cost estimates already approved by competent authorities.
b/ Scope of investment support from the central budget
The central budget shall only provide support for investment in construction of common infrastructures of the entire border-gate EZs, including works outside the zones, which, however, must be in direct service of border-gate EZs, and excluding infrastructures used exclusively for each functional sub-zone in border-gate EZs.
c/ Principles on investment support from the central budget:
- Investment support from the central budget for infrastructure construction in border-gate EZs shall be provided according to projects conformable with the detailed planning on border-gate EZs already approved by competent authorities.
- Based on the annual balance capacity of the central budget and difficulties met by localities, the Government shall consider before submitting to the National Assembly for decision the targeted support for investment in essential infrastructures for border-gate EZs managed by provincial-level People's Committees.
- The central budget capital provided as targeted support for provincial budgets to invest in infrastructures of border-gate EZs shall be identified in the state budget estimates assigned to localities.
- The border-gate EZ management boards or provincial-level People's Committees (in localities without such management boards) being the major planning bodies of localities shall be provided with targeted additional capital construction capital from the central budget for infrastructure construction in border-gate EZs; and shall be entitled to invest in infrastructure construction with state budget capital within border-gate EZs according to the State's current regulations on investment and construction management, if they are investors directly managing infrastructure construction investment projects.
d/ Process of elaborating plans, using and managing investment support capital provided by the central budget:
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