CIRCULAR

GUIDELINES FOR SOME ARTICLE OF THE GOVERNMENT'S DECREE NO. 06/2017/ND-CP ON BUSINESS OF BETTING ON HORSE RACING, GREYHOUND RACING AND INTERNATIONAL SOCCER

Pursuant to the Government's Decree No. 06/2017/ND-CP dated January 24, 2017 on business of betting on horse racing, greyhound racing and international soccer;

Pursuant to the Government's Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, entitlements and organizational structure of the Ministry of Finance;

At the request of the Director of the Bank and Financial Institution Finance Department;

The Minister of Finance promulgates a Circular providing guidelines for some Article of the Government's Decree No. 06/2017/ND-CP on business of betting on horse racing, greyhound racing and international soccer.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides guidelines for some Article of the Government's Decree No. 06/2017/ND-CP on business of betting on horse racing, greyhound racing and international soccer (hereinafter referred to as Decree No. 06/2017/ND-CP).

Article 2. Regulated entities

1. Enterprises whose business involves betting on horse racing, greyhound racing and/or international soccer (hereinafter referred to as “betting enterprises”).

2. Eligible bet placers.

3. Regulatory authorities involved in the licensing, management, supervision, inspection and imposition of administrative penalties related to betting business.

4. Other organizations and individuals involved in betting business.

Article 3. Application for issuance, reissuance, revision, renewal of the certificate of eligibility for betting business

1. The specimen of the application for issuance of the certificate of eligibility for betting business is provided in Appendix 01 hereof.

2. The specimen of the application for reissuance, revision and renewal of the certificate of eligibility for betting business is provided in Appendix 02 hereof.

3. The specimen of the certificate of eligibility for betting business is provided in Appendix 03 hereof.

Chapter II

RACE SURVEILLANCE COUNCIL

Article 4. Establishment of the race surveillance council

1. Before commencing the betting business, the betting enterprise shall submit a document requesting permission to establish a race surveillance council to the Department of Finance of the province in which the racecourse is located. The document shall specify:

a) Composition of the council in accordance with Clause 2 Article 29 of Decree No. 06/2017/ND-CP. The betting enterprise shall propose the composition of the council, which has to be suitable for the business scale and local conditions;

b) Draft regulations on operation of the race surveillance council;

c) Rules for paying remunerations to the council in accordance with Clause 5 Article 29 of Decree No. 06/2017/ND-CP and Clause 2 Article 8 of this Circular.

2. Within 15 days from the day on which the written request is received, the Department of Finance shall request the People’s Committee of the same province to:

a) issue a decision to establish the race surveillance council in accordance with Clause 1 and Clause 2 Article 29 of Decree No. 06/2017/ND-CP and Clause 3 of this Article; and

b) approve the operating regulations of the race surveillance council specified in Clause 4 Article 29 of Decree No. 06/2017/ND-CP .

3. Composition of the race surveillance council:

a) The chairperson of the race surveillance council is a representative of the Department of Finance;

b) Members of the race surveillance council are representatives of the Department of Culture, Sports and Tourism, the Department of Justice, the Department of Agriculture and Rural Development and provincial police authority of the same province;

c) The secretary of the race surveillance council is a representative of the betting enterprise.

4. The Department of Finance shall request the People’s Committee of the province to consider deciding the composition of the race surveillance council in the cases where one of its member:

a) is relocated;

b) violates internal regulations of his/her organization;

c) violate regulations of the race surveillance council;

d) resigns; or

dd) in other cases defined by law.

Article 5. Responsibilities and entitlements of the chairperson of the race surveillance council

1. The chairperson of the race surveillance council has the responsibility to:

a) Take responsibility for the performance of the race surveillance council according to Clause 3 and Clause 4 Article 29 of Decree No. 06/2017/ND-CP and its operating regulations;

b) Assign suitable tasks and coordinate operation of members of the race surveillance council;

c) Submit periodic and ad hoc reports on operation of the race surveillance council to the People’s Committee of the province; take measures to improve the organization and operation of the race surveillance council ensuring conformity with regulations of law, this Circular and operation regulations of the council.

2. The chairperson of the race surveillance council is entitled to:

a) request the betting enterprise and members of the race surveillance council to adhere to regulations of law, this Circular, operating regulations of the council and the published race charter;

b) exercise other entitlements specified in this Circular and operating regulations of the council.

Article 6. Responsibilities and entitlements of members of the race surveillance council

1. Every member of the race surveillance council has the responsibility to:

a) adhere to regulations in performance of their duties; comply with requests of the chairperson of the race surveillance council;

b) perform the tasks given by the chairperson of the race surveillance council and take responsibility for such performance;

c) promptly inform the chairperson of the race surveillance council of violations or suspicions found during performance of their duties.

2. Members of the race surveillance council are entitled to have their opinions recorded in the performance of their duties.

Article 7. Responsibilities and entitlements of the race surveillance council

1. The chairperson of the race surveillance council has the responsibility to:

a) Inspect fulfillment of the conditions for holding a horse race or dog race specified in Article 24 of Decree No. 06/2017/ND-CP ;

b) Directly supervise the race according to the published charter. All information about each race must be written in the race record after the race ends. The race surveillance council shall sign the record to confirm the race result right after the race ends. The record shall be made publicly available to bet placers. Mandatory contents of a race record:

- Date and time of the race;

- Quantity of horses or dogs in the race;

- Quantity and full names of the referees;

- Full name and certificate numbers of the jockeys (for horse races);

- Beginning time and ending time;

- The race result;

- Issues that arise during the race.

c) Supervise conformity with regulations on frequencies of bets, beginning and closing time of bet taking according to Article 15 of Decree No. 06/2017/ND-CP ;

d) At the ending time of bet taking specified in Clause 2a Article 15 of Decree No. 06/2017/ND-CP , the race surveillance council shall make sure the betting enterprise does not take bets anywhere in the system to ensure that no bet ticket is issued after such time.

2. The race surveillance council is entitled to:

a) request inspection of any race horse or dog where necessary or on suspicion of cheating;

b) remove any horse, dog or jockey that fails to satisfy all conditions specified by law or the race charter upon receipt of reliable information;

c) request suspension of the race and request a competent authority to handle the following cases:

- The devices and cameras serving identification of the winning horse or dog are not adequate or reliable;

- The time or location of the race and betting are different from announced ones;

- Cheating is suspected;

- The server system or terminal device is continuously suspended for 30 minutes during the time for selling bet tickets specified in the charter;

- The weather or surface of the race track is not appropriate for the race;

- The system fails to stop selling bet tickets before the ending time of bet taking specified in Clause 2a Article 15 of Decree No. 06/2017/ND-CP .

d) request a competent authority to impose disciplinary penalties or carry out an investigation in case of violations or suspected fraud in organization of the race;

dd) request the betting enterprise to replace unreliable starting device and cameras serving identification of the winning horse or dog;

e) request the betting enterprise to carry out periodic maintenance of the equipment of the racecourse in order to ensure conformity with law of horse races/dog races and betting business.

Article 8. Remunerations of the race surveillance council

1. The chairperson and members of the race surveillance council will receive remunerations for their participation in the council.

2. The remunerations shall be decided by the betting enterprise according to the workload, working time and responsibility of the council members. The betting enterprise shall issue regulations on remunerations of the race surveillance council.

3. The betting enterprise may include such remunerations in its operating costs.

Chapter III

FINANCE MANAGEMENT, ACCOUNTING, AUDIT AND REPORTING

Article 9. Rules for recording and managing revenues and expenditures

1. The betting enterprise shall separately record the revenues, expenditures and profits related to the betting business on its accounting documents and financial statements.

2. Regarding the revenues, expenditures and profits related to the betting business associated with other business activities of the enterprise:

a) If the betting enterprise fails to separate revenues from the betting business from revenues from other activities, the inseparable revenues shall apply excise tax on betting business;

b) Expenditures on both betting business and other business activities shall be recorded according to the ration (%) of revenue from betting business to total revenue of the enterprise.

3. The betting enterprise shall record the revenues and expenditures in accordance with accounting standards and instructions in this Circular.

4. The revenues and expenditures as the basis for payment of tax on betting business shall be determined in accordance with applicable tax law.

Article 10. Other incomes and revenues

Other incomes and revenues of a betting enterprise include:

1. Revenue from betting business.

2. Revenue from business activities other than betting business.

3. Financial revenues.

4. Other incomes (if any).

Article 11. Expenditures

Expenditures on betting business are the expenditures serving the betting business determined in accordance with law. Some specific expenditures on betting business:

1. Payout is the amount of money paid by the betting enterprise to bet winners in accordance with the betting rules and tax law.

2. Payment of commissions to bet ticket agents:

a) The commission rate shall be decided by the betting enterprise and specified in the agent contract between the betting enterprise and the bet ticket agents;

b) The betting enterprise only pays commissions to a bet ticket agent after the sales of bet tickets have been confirmed and the agent has fulfill all obligations specified in the agent contract;

c) The betting enterprise shall withhold personal income tax payable by employees of the bet ticket agent before paying commission according to tax law.

3. Payment of remunerations to members of the race surveillance council specified in Article 8 of this Circular.

4. Cost of payout authorization:

a) The payout authorization must be specified in the agent contract between the betting enterprise and the bet ticket agents;

b) The fee for payout authorization shall be decided by the betting enterprise and shall not exceed 0.2% of the payout provided by the agent under authorization.

5. Other expenditures defined by law.

Article 12. Accounting, audit and disclosure of financial statements

1. The betting enterprise shall do its accounting in accordance with the Law on Accounting and applicable tax law.

2. Annual financial statements of the betting enterprise must be audited by an independent audit organization licensed to operate in Vietnam.

3. Within 120 days from the end of the fiscal year, the betting enterprise shall disclose its financial statement in accordance with law.

4. The betting enterprise shall retain its financial statements in accordance with the Law on Accounting and its instructional documents.

Article 13. Reporting

1. Financial statements:

a) Within 30 days from the end of each fiscal quarter, the betting enterprise shall prepare and send a financial statement to the Provincial Department of Taxation;

b) Within 90 days from the end of each fiscal year, the betting enterprise shall send an annual financial statement to the Ministry of Finance, Department of Finance and Provincial Department of Taxation;

c) The legal representative of the betting enterprise is legally responsible for the accuracy and truthfulness of the abovementioned statements.

2. Income statements:

Every 06 month and at the end of the year, the betting enterprise shall prepare and send an income statement according to the specimen in Appendix 04 and Appendix 05 hereof to the Ministry of Finance and Department of Finance within 30 days from the end of the accounting period. The legal representative of the betting enterprise is legally responsible for the accuracy and truthfulness of the abovementioned statements.

3. In the cases where the Ministry of Finance or the People’s Committee of the province requests an ad hoc report, the betting enterprise shall comply with such request.

Chapter IV

RESPONSIBILITY OF CERTAIN ORGANIZATIONS

Article 14. Responsibilities of Departments of Finance

1. Offer counsel to the People’s Committee of the same province on management, supervision, inspection of betting business in the province in accordance with Article 77 of Decree No. 06/2017/ND-CP , this Circular and relevant regulations of law.

2. Request the People’s Committee of the province to promulgate legal documents that are basis for operation of the race surveillance councils, including:

a) Decisions on establishment of race surveillance councils;

b) Approval for operating regulations of race surveillance councils.

Article 15. Responsibilities of the Provincial Department of Taxation

1. Cooperate with the Department of Finance and relevant authorities in management, supervision, inspection of betting business in the province in accordance with Decree No. 06/2017/ND-CP , this Circular and relevant regulations of law.

2. Take responsibility for management and inspection of fulfillment of tax liability of betting enterprises in accordance with tax law.

Article 16. Responsibilities of betting enterprises

1. Adhere to regulations on betting business in Decree No. 06/2017/ND-CP , this Circular and relevant regulations of law.

2. Take responsibility for development and issuance of internal regulations and betting processes, ensuring transparency, accuracy and conformity with regulations of law on betting business.

3. Develop and issue internal regulations on remunerations of the race surveillance council in accordance with Clause 2 Article 8 of this Circular.

Chapter V

IMPLEMENTATION

Article 17. Implementation

1. This Circular comes into force from December 01, 2017.

2. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for consideration./.